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Globalisation is defined as the process by which people, their ideas and activities in different
parts of the world become interconnected or integrated.
Key driving forces of globalisationDevelopments in transportation, Developments in
communication and Transnational Corporations (TNCs).
-Developments in Transport
Transport systems are the means by which people, materials and products are transferred from
one place to another. With the increasing mobility of goods and people, it is important to have an
efficient transport network worldwide, which includes airports, seaports, railways and highways
to make it possible for goods to be moved around easily. As a result, developments in
transportation technology have been a key driving force of globalisation because the new
developments in transport technology like airplanes and containerisation have shrunk
the world in terms of time taken to get from one place to another making it easier and
possible for goods to be moved around the world easily, enhancing the process by which
people, their ideas and their activities become interconnected or integrated.
-Development in Communication
Improvement in technology has made communications among people in different locations faster
and more convenient. Telephones, e-mail, satellite technology and optical fibre systems allow
information to be relayed from one end of the world to the other at a very high speed.Because
of this, consumers are able to access information conveniently and effectively, allowing
their ideas and their activities become interconnected and integrated, which is what
globalisation is about.Furthermore, advances in communication technology allows TNCs
to coordinate and control their worldwide activities easily and more efficiently, allowing
more people, their ideas and their activities to become even more integrated and
interconnected.
-Transnational Corporations (TNCs)
TNCs drive globalisation by setting up operations in a number of countries outside their home
country. This is done so as to source for new markets, lower the cost of producing their goods or
to source for components before assembling their products in another country. This has led to
economics becoming more integrated as people and their activities become
interconnected with TNCs setting up companies in other parts of the world and linking
them to the parent company at home.
Impacts of globalisation
-Economic
Improvement in standard of living
Increased competition nations
Talent
Widening Income Gap between the rich and poor
-Social
Increased awareness of foreign culture
Loss of local culture
-Environmental
Environmental Degradation
Global Warming
Environmental Management
Economic Impact
Improvements in standard of living
Globalising countries have enjoyed an increase in income levels because when they open their
countries to trade and foreign investments, the countries earn revenue. The revenue earned by
the government allows it to provide better standards of education, healthcare, defence, housing
and transportation. As a result, citizens in these countries benefit from better standards of living.
Free trade also allows consumers to purchase a wide variety of goods. The increase in lifestyle
choices leads to a better quality of life.
Increased competition among countries
Globalisation also leads to countries facing more intense competition. In order to lower their
costs of production, TNCs seek out the cheapest locations and as a result, governments
compete with one another to attract these TNCs to invest in their countries.Usually countries that
are able to offer incentives to foreign investors like better infrastructure will be more successful in
attracting foreign investments which will result them in economic growth.However, poorer
countries that do not have good infrastructure and political instability are unable to attract
investors and as a result remain trapped in the poverty cycle.
Talent
Due to Globalisation, people are able to move from country to country in search of leisure
activities and employment. Globalisation has therefore presented talent with the opportunity to
find employment and better prospects in another country. However, the increase of worker
mobility may lead to brain drains in countries which cannot offer their talents the better prospects
overseas countries may offer. This would restrict the economic growth and development of the
country experiencing brain drain.
Social Impact
Increased awareness of foreign culture
Due to globalisation, people have become aware of different cultures which allow for them to
gain more knowledge about the history, culture and way of life of different people.
Loss of Local Culture
Globalisation also causes a loss of local culture when global brands start to dominate the
consumer market in developing countries as they are identical in appearance and create a
largely homogenous culture across the world. Pop culture from the west has also been spread
by globalisation and have to some extent been a negative influence on youth as they lose
interest in local culture and traditions.
Environmental Impact
Environmental Degradation
When TNCs set up factories in different parts of the world, many of them use natural resources
such as timber,oil and metals at a rapid rate. As a result the natural environment suffers because
developing countries lack the resources to implement and enforce environmental regulations.
Deforestation and related problems
One such problem of environmental degradation is deforestation as rainforests have been cut
down in many countries to make way for the development of industries, agriculture, housing and
transportation. Rainforests are usually sacrificed because it is sometimes more profitable to use
the land for other purposes. When these forests are cleared, many environmental problems such
as soil erosion, the extinction of flora and fauna an increase in flooding and the haze occur.
These problems can cause a loss of life, economic losses and loss of revenue for tourism.
Pollution is also a major problem as well.
Global Warming
Rapid Globalisation has produced large amounts of greenhouse gases through increased
emissions by airplanes, ships, vehicles and factories which has led to the rise in average global
temperatures. This has led to worsened environmental problems as the rise in average global
temperatures has led to catastrophic weather conditions like floods,landslides or has affected
food production due to droughts and famines.
Environmental Management
Due to negative effects of globalisation, there has also bee an increase in awareness of
environmental management as countries are aware that sustainable development is a key to
further growth. If the environment is well preserved, future generations will be able to use the
resources to generate income. In order to do this, sustainable energy is needed. Environmental
management has thus generated alternative energy resources such as solar and geothermal
power.
Economic
Good effectsImprovement in standard of living, Competition among nations for investments
Bad effectsCompetition for talents,Widening the income gap between rich and poor
Social
Good effectsIncreased awareness of foreign culture
Bad effectsLoss of local culture
Environmental
Good effectsEnvironmental Management
Bad effectsGlobal warming,Deforestation
At the same time, singapore also aims to be the regional hub for education and tourism. By
attracting prestigious universities to set up regional campuses here, thereby creating a strong
university sector that will attract foreign talent that will contribute towards economic growth. As
singapore faces stiff competition from other neighbouring countries as a tourist destination, it
developed other attractions such as the Integrated Resorts so as to strengthen singapores
position as a choice destination in Southeast Asia and generate economic benefits. By
developing various sectors of the economy will help reduce Singapores dependency on a
single industry or market. Should any sector of the economy slow down, the other
sectors can continue to generate revenue.
As a result of singapore companies venturing abroad, many singaporeans are also relocating
overseas or studying in universities abroad. There is a concern that they may feel less rooted or
attached to singapore. (This portion deals with negative effects of this factor can be
used when evaluating the effectiveness of this strategy)
Singapore also cooperates with other countries by setting up Special Economic Zones (SEZs)
where a geographical region in a country is set aside. There are less strict economic laws and
the zone is intended to function as zones of rapid economic growth by using tax and business
incentives to attract foreign investment. Economic growth will be achieved because the flow
of goods between countries will be smoother and easy investment opportunities for
businessmen would mean more singapore companies will be able to benefit from
simplified procedures for work permits and visas. They can also benefit from the help
given by the local authorities in dealing with licenses and documentation. All these
initiatives will allow singapore to generate economic growth.
Attracting Foreign Talent Due to a declining birth rate and the requirement of new skills in a
knowledge-based economy, there is a need to attract foreign talent to meet singapores
manpower needs. Foreign talent also brings to singapore new business contacts which
will lead to more business opportunities and jobs in singapore. Foreign talent also adds to
the diversity to the cultural landscape of singapore and this makes the country more
cosmopolitan.