NAME: ______________________________ CLASS:______

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 WHAT DOES IT MEAN TO
LIVE IN A GLOBALISED
WORLD?

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 Overview of Issue 3: Being Part of a Globalised
World: Is It Necessarily Good? Therefore, the negative economic
Link impact on individuals is loss of
Chapter 8: What does it mean to live in a globalised
income.
World?

Chapter 9: How Do We Respond to Tensions Arising

From Some Economic Impacts of Globalisation?

Chapter 8 – Glossary

No. Word Definition Textbook

Page

1 Interconnection A mutual connection 254

between two or
more things.

2 Interdependent A relationship where 254

relationships two or more parties
are mutually
dependent on one
another.

3 Globalisation A process through 256

which ideas and
activities of people in
different parts of the
world become
interconnected.
These

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 Some workers may also lose their interconnections can
jobs because they are unable to lead to
equip themselves with the skills interdependent
required for those jobs. As relationships
economies continue to evolve, the between
nature of skills demanded will developments in the
change too. For example, when world and
countries moved from agriculture to developments in a
manufacturing industries and country.
service industries, the skills required
changed accordingly. 4 Driving forces Factors that shape 256
As a result, globalisation can lead to and influence the
a negative impact on individuals process of
through the loss of income. The globalisation.
ability of companies to employ lower
income workers easily from any part
of the world can lead to the 5 Multinational MNCs are businesses 262
displacement of higher income Corporations with economic
earners in the companies. Workers (MNCs) activities in more
whose skills are no longer relevant in than one country.
Explanation
the fast-changing globalised
economy may also end up losing 6 Advancement Improvement in 265
their jobs. When individuals who in technology technology
lose their jobs are not highly skilled
and are lowly paid, they may face
problem in finding alternative
employment, making this a long-
lasting negative impact on these
individuals.

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SAMPLE ESSAY QUESTIONS FOR CHAPTER 8 FACTOR 2: IMPACT ON INDVIDUALS
NO. SAMPLE QUESTION MARKS
1. Extract 2 and Extract 3 reflect on the
driving forces of Globalisation. The negative economic impact on
Point
individuals is loss of income.
Explain how advancements in
technology and developments in [8]
With globalisation there is increased
transportation help to drive
globalisation. mobility of workers and jobs. Some
2. Extract 2 and Extract 3 reflect on the workers have had to struggle with
role of Multinational Corporations and lower income or risk losing their jobs,
development in technology as key as companies get more access to
drivers of globalisation. foreign markets offering lower labour
[8] costs.
Explain how the Multinational
Corporations and development in Jobs may also be lost when global
technology has an important role in companies close down their
driving globalisation? Explain your operations to shift to another
answer. Elaboration
location. For example, workers in
Western countries such as the USA
lost their jobs in the 1970s when
American companies set up their
production in China and India which
operated at a lower cost.

The cycle continues as over time,

where labour cost in China and India
increases, companies move out to
other countries such as Vietnam.
Myanmar or Eastern Europe where
labour cost is cheaper.

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 As a result, globalisation enables
people to look for employment
opportunities overseas that allow
them to earn higher income than
working locally. With higher income,
1.
individuals enjoy a higher standard
Explanation of living which improves their quality Driving Forces of Globalisation
of life. This translates to higher
revenue for the country as
individuals have greater purchasing
power generating sales of products
which brings in the profits for the
country. 1.2
1.1
Therefore, the positive economic Growth of 1.3
impact on individuals is higher Developments Advances in
Link Multinational
income. in Technology
Corporations
Transportation
(MNCs)

Sample Part (b) SRQ Question for Chapter 8:

Extract 2

Transportation links together the factors of

production in a complex web of relationships
between producers and consumers. When transport
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systems are efficient, they provide economic and
social opportunities and benefits that result in
positive effects.
Extract 3
In the past, only big successful companies would
dominate the market because they could afford
expensive advertising to reach their target market.
Now with advanced internet technologies, a small
business can use most advanced internet marketing
tools with a small budget to reach over 100,000
target customers.
(b) Extract 2 and Extract 3 describe the two driving
forces of globalisation – developments in
transportation and advances in communication
technology.
Explain how the developments in transportation and
advances in communication technology help to drive
globalisation. [8]
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FACTOR 1: IMPACT ON INDIVIDUALS
The positive economic impact on
Point
individuals is higher income.
Higher income for individuals comes
about because, with globalisation,
there is greater mobility, creating an
ease with which individuals can look
for jobs overseas. Individuals are
drawn abroad because of better job
prospects. People are less
apprehensive of finding a high-
paying job and working overseas
because technology allows one to
Elaboration communicate with family in an
instance, dissolving the physical
distance of being away from one
another.
Executives enjoy higher pay when
they work abroad compared to their
colleagues who work in their own
country. Some people are also
headhunted to work overseas at a
much higher salary than they would
be paid if they were to work in
Singapore and this attracts many
people to seek jobs in foreign lands.
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 down their operations and file for FACTOR 1:
bankruptcy.

Developments in transportation
Point
help to drive globalisation.

Therefore, the negative economic

Link impact on companies is lower The world seems to have "shrunk" in
profits/market share. terms of the time needed to get from
one place to another. This is
achieved through improvements in
the size and speed of the different
modes of transportation, and the
development of efficient and
integrated transportation
infrastructure such as airports,
seaports, railways and
expressways.
Elaboration
For example, Singapore has an
efficient and integrated
transportation infrastructure which
facilitates the movement of people
and goods, and in turn the exchange
of ideas, between countries.
Singapore's connectivity to the world
is also achieved through its rail and
road networks, airports as well as
seaports.

To maintain its lead in the face of

increasing competition from other
transportation hubs, such as those in
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 Malaysia and Hong Kong, Singapore
has continuously improved its
transportation infrastructure by
increasing its capabilities and
capacities.
As a result, developments in
transportations has enabled a
greater number of goods and people
to be moved across the world
quickly. This leads to savings in
travel time and cost. When goods
Explanation and people can be moved around
the world more quickly and at a lower
cost, it facilitates the process
through which people's activities
and ideas become interconnected
and interdependent, which drives
globalisation.
Thus, developments in
Link transportation help to drive
globalisation.
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multinational corporations (MNCs)
that offer the same products or
services. They also face challenges
such as small domestic and
shortage of expertise and labour.
They may be unable to earn enough
profit to sustain their operations.
MNCs which cannot anticipate
changing markets and ensure that
its products and services remain
relevant and competitive could also
face lowered profits and bankruptcy.
In 2012, French hypermarket chain,
Carrefour, closed its only branch in
Singapore after 15 years. This was
due to competition from other
companies offering similar products
in Singapore.
As a result, such intense competition
in a globalised economy can cause
SMEs to have lower market share
and earn lower profits. This may
result in them having to retrench
their own workers or cut down on
Explanation
their number of manufacturing plants
or outlets in order to sustain their
operations. All these may also lead
to even lower profits and market
share. In the worst case scenario,
SMEs may even be forced to close
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FACTOR 2: IMPACT ON COMPANIES
The negative economic impact on
Point companies is lower
profits/market share.
With globalisation, companies are
able to widen their market reach by
expanding their production and
sales of goods in many parts of the
world. This allow them to benefit
from higher profits and larger maker
share.
However, this will lead to
competition from other companies
which are similarly trying to expand
Elaboration their market reach and profits. It
could become harder for companies
to compete for a share of profits from
the global economy. To remain
successful, a company needs to
constantly innovate and reinvent
itself or risk losing its share of the
market profit.
For example, small and medium
enterprises (SMEs) have contributed
significantly to Singapore’s
economy. However, many SMEs
have found it difficult to compete with
the bigger local companies and the
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FACTOR 2:
Growth of multinational
Point corporations (MNCs) help to drive
globalisation.
MNCs are businesses with
economic activities in more than one
country. As MNCs continue to grow
in their number and size, they control
more aspects of international trade
and investment.
Singapore has both locally-owned
and foreign-owned MNCs.
Singapore-owned MNCs have been
operating in regions and countries
Elaboration across the world. This has created
interconnections and interdependent
relationships between economic
activities in Singapore and the rest of
the world.
On the other hand, foreign-owned
MNCs have brought many benefits
to Singapore, in terms of providing
employment, higher wages and
bringing in new technology and
expertise to sustain Singapore's
competitiveness. In turn, these
MNCs have benefitted from
Singapore’s conducive pro-business
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 environment governed by the rule of
law.
Apart from providing economic
benefits, MNCs also facilitate the
exchange of ideas between
countries. For instance, foreign-
owned pharmaceutical and
biotechnology MNCs, such as
Novartis and Roche, established
collaborations with local institutions
in Singapore to conduct research
and develop solutions to improve
healthcare around the world.
As a result, the global span of MNCs’
operations drives globalisation as
they increase the economic
interconnections between people
and goods around the world. This
can also lead to interdependent
Explanation relationships between the parties
involved in the operations of the
MNCs. Besides economic
interconnections, collaborations of
ideas between MNCs and local
institutions can also lead to
interdependent relationships as they
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business overseas and are now in
more than 20 countries around the
world. To support such companies in
their overseas ventures, the
Singapore government offers
assistance such as loans, grants
and tax incentives. This enables the
companies to take advantage of the
opportunities presented by
globalisation.
As a result, with a bigger market
reach, companies will earn a higher
revenue as their products are sold to
a bigger pool of consumers. At the
Explanation same time, venturing abroad would
also allow companies to lower the
cost of their production. These will
then translate to greater profits for
companies.
Therefore, the positive economic
impact of globalisation on
Link
companies is higher profits/market
share.
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FACTOR 1: IMPACT ON COMPANIES take advantage of each other’s
strengths and expertise in reaching
their goals.
The positive economic impact of
Point globalisation on companies is
higher profits/market share.

With globalisation, companies are

able to widen their market reach by
expanding their production and
sales of goods in many parts of the
world. This allow them to benefit Thus, the growth of multinational
from higher profits and larger maker Link corporations help to drive
share. globalisation.

When companies set up their

operations in different locations, they
not only have access to new markets
Elaboration abroad, but also access to lower
labour costs and cheaper resources
such as land and raw materials.
Companies can also obtain their
components from one location but
assemble them in different parts of
world where production costs would
be cheaper.

Many Singapore companies have

also gained higher profits by going
global as they expand their
operations overseas. For example,
CapitaLand is a local real estate
company that has brought their
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FACTOR 3:
Therefore, the negative economic
Advances in technology help to Link impact of globalisation on countries
Point is economic downturn.
drive globalisation.

Technological advancements in
communication have resulted in
greater access to the Internet and
the increasing use of mobile
communications. These facilitate the
communication and exchange of
information across the world.
Elaboration
With the invention of the smartphone
at the beginning of the 21st century,
mobile phones are no longer limited
to making voice calls. People around
the world are now able to connect
and communicate through
messaging and video calls, as well
as gain access to a vast amount of
information on the Internet.

As a result, the advances in

technology has improved the
communication process among
people within the country and
Explanation around the world. The improvements
in technology have made the
transfer of information between
people faster and more convenient
than ever before. These allow for
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 countries like China and India, which ideas and activities across the
produced these goods. Both world to become highly
countries experienced high interconnected, which increases
unemployment rate and severe drop the pace of globalisation.
in Foreign Direct Investments (FDI).

Due to its close ties with the global

economy, Singapore’s exports,
tourism sector and its broader
economy were also affected badly
by the 2008 Global Financial Crisis. Thus, advances in technology help
Link to drive globalisation.
Singapore’s economy went into a
severe recession that year.

As a result, in an interconnected
world due to globalisation, the rise
and fall of economies is closely tied
due to trade and investments
between countries. During economic
downturns, the withdrawal of
investments and reduction in the
demand for goods and services by
Explanation
some countries can affect other
countries that participate in the
global economy like Singapore. This
can cause them to also experience
economic decline. The economic
downturns can result in the negative
impacts of less income and loss of
jobs for the countries affected.

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 FACTOR 2: IMPACT ON COUNTRIES

The negative economic impact of

Point globalisation on countries is
economic downturn.

In a global economy, when the

economy of one country faces a
downturn, it may affect other
countries. In times of economic
downturn, a country may withdraw
its investments or reduce its demand
for goods and services from other
countries. This will lead to less
income and employment for the
countries affected.

Elaboration For example, the 2008 Global

Financial Crisis, which started in the
USA, affected many other countries.
The close connections between
European and US banks caused the
crisis and economic slowdown to
spread to Europe. This then led to a
further reduction in demand for
goods and services worldwide.
People only buy what is necessary
as they have less money to spend.

The fall in worldwide demand for

goods seriously affected the
economies of manufacturing
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 consumption. In this way,
participating in the global economy
HOW DO WE RESPOND TO
has led to countries like Singapore TENSIONS ARISING FROM
to enjoy economic growth which
contributed to the increase in their SOME ECONOMIC IMPACTS
standard of living.
OF GLOBALISATION?

Thus, the positive economic

Link impact of globalisation on
countries is economic growth.

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 Overview of Issue 3: Being Part of a Globalised from another country. Foreign
World: Is It Necessarily Good? companies have confidence in
investing in Singapore because of
Chapter 8: What does it mean to live in a globalised
the business opportunities here that
World?
will allow them to establish
Chapter 9: How Do We Respond to Tensions Arising themselves, make good profits and
From Some Economic Impacts of Globalisation?
further expand their business in
Asia and the rest of the world.

FTAs are treaties between

Chapter 9 – Glossary countries to establish a free trade
area for the exchange of goods and
No. Word Definition Textbook services without tariffs or
Page hindrances. For example, in 2004,
Singapore signed an FTA with the
USA. This greatly benefitted
1. Trade Buying and selling of 273 industries such as electronics and
goods and services information technology in
2.
Singapore.
Multinational A corporate 273
Corporations organization that owns
(MNCs) or controls production As a result, globalisation has led to
of goods or services in more trading relationships between
two or more countries countries around the world. This
other than their home generates more tax revenue and
country. create more good job opportunities
3.
Explanation for the countries that can further
Investment The action or process of 273
promote and sustain their economic
putting money into
starting a business or
growth. The increase in trade and
buying of financial business also allow countries to
products with the benefit from a greater variety of
expectations of goods and services available for

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FACTOR 1: IMPACT ON COUNTRIES achieving profits
The positive economic impact of 4. Tax Revenue Income earned by a 273
Point globalisation on countries is country
economic growth.
Globalisation has increased trading 5. Economic 274
A statutory board of the
and expansion of businesses in Development
government which
different parts of the world. Board (EDB)
plans and executes
Countries benefitted from strategies to sustain
increased tax revenue, Singapore as a leading
employment opportunities and a global hub for business
greater variety of goods and and investment.
services for consumption.
6. Foreign 276
Investments in a
For example, the global economy Direct
Singapore company by
has been vital to Singapore’s Investment
a company from
survival. With limited natural (FDIs)
Elaboration another country / a
resources, Singapore looks to the controlling ownership in
global economy for its expertise, a business in one
products and services. Given its country by an entity
small domestic market, Singapore based in another
also encourages foreign country.
investments and invests in other
countries in order to remain 7. Free Trade 277
Treaties between
competitive and maintain its Agreements
countries to establish a
economic growth. (FTAs)
free trade area where
the exchange of goods
Singapore does this through and services can be
Foreign Direct Investment (FDI) conducted without
and Free Tree Agreements (FTAs). tariffs or hindrances
FDI refers to investments in a across their borders.
Singapore company by a company
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 8. Tariffs 277 Globalisation leads to increased competition. When
Taxes imposed on
imported goods. a company is unable to produce goods and services
at a low cost and efficient price, it will experience
9. Stock Market A market where 280 lower profits and loss of market share.
financial products such
as shares and bonds are
traded Extract 3

10. Economic The capital of a 280 Increasing interconnections in the global economy
Shares company is divided into have caused problems for countries. When one
shares. Each share country experiences an economic downturn, it can
forms a unit of trigger many negative outcomes for other countries
ownership of a that have economic relations with it.
company and is offered
for sale so as to raise
capital for the (b) Extracts 2 and 3 present some economic
company. challenges that may arise with globalisation. Explain
the negative economic impacts of globalisation on
11. Investment Issues shares and resells 282
countries and companies.
Banks them to investors;
provide capital for [8]
other companies,
government and other
entities.

12. Recession A period of reduced 283

economic activity /
economic decline.

13. Rental Reduction in amount to 283

Rebates be paid for the rent of a
flat

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1. 1. 14.
1.1 Economic Growth Small and In Singapore, it refers to 287
Medium businesses with annual
Economic Economic Impacts on
Enterprises sales turnover of not
Impacts of Countries (SMEs) more than $100 million
Globalisation or total number of
1.2 Economic Downturn
workers not exceeding
200.

2. 2.1 Higher Profits/Market

Economic Impacts on Share
Companies
2.2 Lower Profits/Market
Share

3. 3.1 Higher Income

Economic Impacts on
Invidividuals
3.2 Loss of Income

Sample Part (b) SRQ Question for Chapter 9:

Extract 2

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SAMPLE ESSAY QUESTIONS FOR CHAPTER 9 negative economic impact to
Singapore.
NO. SAMPLE QUESTION MARKS [8]
1. Extract 2 and Extract 3 show the Explain how globalisation can bring
positive and negative impact of the about positive and negative economic
global economy on companies. impact to Singapore.
6. Extract 2 and Extract 3 show how
Explain how the global economy has [8] globalisation can impact individuals
resulted in higher profits/larger market and country economically.
share and lower profits/smaller market [8]
share for MNCs. Explain how globalisation can impact
2. Extract 2 and Extract 3 are about the individuals and country economically.
positive and negative economic
impacts of globalisation on
companies.
[8]
Explain how globalisation leads to
positive or negative economic impacts
on companies.
3. Extract 2 and 3 reflects on the
negative impacts globalisation can
have on a company and an individual.

Explain the negative impacts of [8]

globalisation on companies and an
individual.
4. Extract 2 and Extract 3 are about the
positive and negative economic
impact of globalisation.

Explain the positive and negative [8]

economic impact of globalisation on
individuals.
5. Extract 2 and 3 describe how
globalisation brings about positive and

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