Globalization

Chapter 2, Sec 4 Social Studies

What is Globalization?
The process by which PEOPLE, THEIR IDEAS
and THEIR ACTIVITIES in DIFFERENT PARTS
OF THE WORLD become INTERCONNECTED or
INTEGRATED

Globalization as a term is new but the Process

is not …

It shows how the world has “shrunk” and how

people, goods and information can be moved
easily around the world
Important to Note…
So, if you are asked to assess HOW
EFFECTIVE globalisation has
been… you have to ask yourself
HOW MUCH INTERCONNECTION
AND INTEGRATION HAS TAKEN
PLACE BETWEEN PEOPLE, THEIR
IDEAS and THEIR ACTIVITIES in
DIFFERENT PARTS OF THE WORLD
Examples of Globalization
The Internet
Selling local products (e.g. OCK Curry
Puff) in the global market (e.g.
Malaysia, China, Indonesia, etc)
Attending lectures by a British professor
teaching in an American University via a
web-conference in NUS
Examples of Globalization
People in different parts of the
world:
Wearing Made in China clothes
Driving Made in Japan cars
Sipping Australian Wine while
watching the LIVE telecast of a
soccer match in Germany
Pizza 12
What do you think is the message
of this video?
Is there a more serious issue
behind the spoof?
How much globalization goes into
our pizzas?
[Link]
v=yQE4j5Mxr1M
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Enables globalization by encouraging it:
Transport systems are the means by which
people, products and materials are transferred
from one place to another
Communication systems are the means by which
information is transmitted from place to place in
the form of ideas, instructions and images
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Transportation
Improvements in transport technology has
“shrunk” the world
19th century steam engine  20th century jet
engine, large ocean-going vessels move people
Containerisation moves goods fast and cheap
over long distances (ships  trucks)
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Transportation
Increasing mobility of goods and people
Countries have built efficient and
integrated transportation infrastructure
(e.g. airports, seaports, railways,
highways to facilitate movement)
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Communications
Faster and more convenient communication
People all over the globe can communicate via
telephone, e-mail, fax, video conferencing, etc
Satellite technology allows for simultaneous
communication
Optical fibre systems can transmit large amounts
of information and very high speeds
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Communications
Internet has enabled consumers to access
information instantly, conveniently and
efficiently
Internet has transferred the way people
communicate, do business, obtain information
and purchase goods and services
Key Driving Forces of Globalization
1) Developments in transportation and
communications
Communications
Transnational Companies can operate as
information from the head office can be
easily and effectively transmitted to every
branch office anywhere in the world
Key Driving Forces of Globalization
2) Transnational Companies
Large global firms that operate in a
number of countries and have
production and service facilities
outside the country of their origin
Example: Microsoft, Toyota
Key Driving Forces of Globalization
2) Transnational Companies
TNCs set up operations in different
parts of the world because:
Sourcing for new markets
Lowering cost of production
Production of different parts for products
and assembly done in a variety of
countries
Impact of Globalization
1) Economic Impact
Improvements in Standards of Living
Increased Competitions among Nations
Investment and Market
Talent
Widening Income Gap between the Rich and Poor
Impact of Globalization
2) Social Impact
Increased Awareness of Foreign Culture
Loss of Local Culture
Impact of Globalization
3) Economic Impact
Environmental Degradation
Deforestation and Related Problems
Global Warming
Environmental Management
Impact of Globalization
Economic Social Environmental
Good Effects Good Effects Good Effects
- Improvement in - Increased - Environmental
Standard of Living Awareness of Foreign Management
- Competition Among Culture
Nations (Investment
& Market)
Bad Effects Bad Effects Bad Effects
-Competition Among - Loss of Local Culture - Global Warming
Nations (Talent) - Deforestation and
- Widening Income Related Problems
Gap between the Rich
and the Poor
Impact of Globalization
1) Economic Impact
Improvements in Standards of Living
As countries trade and open their doors to
foreign investment, they earn more revenue
• As a result, their citizens benefit from a higher
standard of living
• Free trade allows for a larger variety of
foreign goods for the consumer to choose
from
• Better quality of life
Impact of Globalization
1) Economic Impact
Increased Competition Among Nations
Investment and Market
• Globalisation means more competition as TNCs source
for the cheapest places to lower their cost of
production
• Governments have to compete with each other to
attract these foreign corporations to invest
• When China opened its doors to foreign investment in
the 1970s, industrial cities like Suzhou, Wuxi and
Dalian were formed
Case Studies
Dalian Industrial Park (China)
Tanjung Pelepas Port (Malaysia)
Don Muang Airport (Thailand)
Dalian (Northern China)
Well-developed infrastructure to
support industrial growth
Seaport handles high passenger and
container cargo volumes
Airport handles more than 88 routes
More than 10 banks and financial
institutions
Renowned financial institutions
Dalian (Northern China)
Foreign manufacturing companies enjoy
lower taxation rates
Hi-Tech Industrial Park which
encourages R&D in IT
Rapid growth stems from all these
initiatives
Tanjung Pelepas Port (M’sia)
Rival port along the Straits of Malacca
World’s biggest container shipping line,
Maersk (Denmark) shifted its business from
Pasir Panjang CT in Singapore to Tajung
Pelepas
Tanjung Pelepas intends to compete with
Singapore and move into the forefront of the
transshipment business in SE Asia
The draw of Tanjung Pelapas its is cheaper
rates and flexible operations
Don Muang Airport (Bangkok)
Surging traffic put Bangkok’s Don
Muang Airport as 12th busiest compared
to Hong Kong (14th) and Singapore
(24th)
Impact of Globalization
1) Economic Impact
Increased Competition Among Nations
Investment and Market
• Competition for markets and investment is intense
• Countries that are better able to offer incentives to
investors will be more successful in attracting
investment and markets
• This results in further growth for the country when
infrastructure is more developed
Impact of Globalization
1) Economic Impact
Increased Competition Among Nations
Talent
• Highly skilled people are in high demand all over the globe
• Globalisation allows people to move freely from one country
to another in search of employment
• Advanced economies with stable or shrinking populations
seek new talent pools
• Emerging economies seek back their best and brightest
• E.g. India’s Brain Drain (e.g. Computer)
Impact of Globalization
1) Economic Impact
Widening Income Gap Between the Rich
and the Poor
Due to rapid development in many countries
and the spread of poverty in others
Developed countries experience rapid
income growth as they own most of the
manufacturing activities
Impact of Globalization
1) Economic Impact
Widening Income Gap Between the Rich
and the Poor
These developed countries and their TNCs
are able to attract investments, skilled
labour and resources away from poor areas
International trade has generated much
revenue for them
Impact of Globalization
1) Economic Impact
Widening Income Gap Between the Rich
and the Poor
However, Developing Countries face trade
restrictions put up by Developed Countries
They are not capable of manufacturing better
quality goods that fetch higher prices
Poorer nations are only attractive for labour-
intensive and low-cost ventures
Impact of Globalization
1) Economic Impact
Widening Income Gap Between the Rich and
the Poor
The rich developed countries prosper with better
opportunities while the poor developing countries
face economic uncertainties like retrenchment
Widening income gap can lead to social
problems, increasing tension between the rich
and the poor
Impact of Globalization
2) Social Impact
Increased Awareness of Foreign Culture
Travel, the Internet, mass media (products of globalisation
allow you to learn more about foreign culture
Loss of Local Culture
Global (Western) brands dominate consumer markets in
developing countries
Creation of homogenous culture across the world
Spread of pop culture and erosion or loss of local culture
Negative influence of youth
Enforced beliefs
Impact of Globalization
3) Environmental Impact
Depletion of natural resources by TNCs
Concern over profits vs. protection of the
environment
Lack of funds to implement environmental
protection
Environmental Degradation
Deforestation and Related Problems
Global Warming
Environmental Management
Impact of Globalization
3) Environmental Impact
Environmental Degradation
Deforestation and Related Problems
• Rainforests cut to make way for development
• Rainforests cut down for industries, agriculture, housing, forestry,
cattle ranches
• Planting of cash crops
• Projects to achieve higher level of economic development
Global Warming
Environmental Management
Impact of Globalization
3) Environmental Impact
Environmental Degradation
Deforestation and Related Problems
• Soil erosion, extinction of flora and fauna, flooding and haze
• Loss in tourism (haze)
• Water pollution
Global Warming
Environmental Management
Impact of Globalization
3) Environmental Impact
Environmental Degradation
Global Warming
• Large amount of greenhouse gases produced by increased usage of
airplanes and ships
• Factories and transportation also emit greenhouse gases,
contributing to the increase in world average temperature.
Environmental Management
• Greater awareness
• Sustainable development is the key to further growth
• Source for alternative energy
Singapore’s Strategies
Challenges faced by Singapore:
Strategies to Maximise Opportunities
and Overcome Challenges
Diversifying the Economy
Technology-Intensive, High Value-Added
Manufacturing
Life Sciences
Regional Hub for Services (Education)
Tourism (Integrated Resorts)
Strategies to Maximise Opportunities
and Overcome Challenges
Diversifying the Economy
Technology-Intensive, High Value-Added
Manufacturing
• Life Sciences
– Genetics, new medical treatments
– Gene therapy, new drugs, genetically modified food
products
– Setting up of supporting institutions like A*Star
 IMCB (Institute of Molecular and Cell Biology)
– Help and support biomedical R&D capabilities
Strategies to Maximise Opportunities
and Overcome Challenges
Diversifying the Economy
Technology-Intensive, High Value-Added
Manufacturing
• Apart from encouraging R&D, Singapore
continues to attract TNCs to set up their high
value-added manufacturing activities
– E.g. Seagate (Generate jobs, affirms Singapore’s
position as a manufacturing hub)
Strategies to Maximise Opportunities
and Overcome Challenges
Diversifying the Economy
Regional Hub for Services (Education)
• Complementing local universities, leading
international universities have set up branches
in Singapore
– U Penn’s Wharton School of Business, Chicago
Graduate School of Business, Shanghai Jiao Tong
University
– Strong university sector which attracts talent
Strategies to Maximise Opportunities
and Overcome Challenges
Diversifying the Economy
Regional Hub for Services (Tourism)
• Generate economic growth
– Two Integrated Resorts (IRs) will be built in Marina Bay and
Sentosa
– Stiff competition from other countries as tourist
destinations
– Singapore cannot offer natural tourist attractions and so
must offer innovative man-made attractions to attract
tourists
– Investment of capital by investors  Jobs and economic
growth
Strategies to Maximise Opportunities
and Overcome Challenges
Nurturing the Growth of Small and
Medium Enterprises (SMEs)

Venturing Abroad

Expanding Market Reach Through

Economic Co-operation
Strategies to Maximise Opportunities
and Overcome Challenges
Nurturing the Growth of Small and
Medium Enterprises (SMEs)
Provide jobs
Support operations of TNCs by supplying
them with components (e.g. supplying
thread, buttons to a garment factory)
Enhance the attractiveness of Singapore as
a regional manufacturing and services hub
Strategies to Maximise Opportunities
and Overcome Challenges
Nurturing the Growth of Small and Medium
Enterprises (SMEs)
Problems faced by SMEs
• Unable to compete with big corporations due to a
lack of resources (e.g. small furniture shop vs.
IKEA)
• Lack expertise in using advanced technology
• Family-run business  Shortage of skilled personnel
• Small domestic market
Strategies to Maximise Opportunities
and Overcome Challenges
Nurturing the Growth of Small and
Medium Enterprises (SMEs)
Helping SMEs
• Loan schemes from banks
• Association of Small and Medium Enterprises
(ASME) set up to provide enterprises with help
• Training, regular seminars and workshops
• Tax exemption for new companies
Strategies to Maximise Opportunities
and Overcome Challenges
Nurturing the Growth of Small and Medium
Enterprises (SMEs)
Problems faced by SMEs
• Unable to compete with big corporations due to a
lack of resources (e.g. small furniture shop vs.
IKEA)
• Lack expertise in using advanced technology
• Family-run business  Shortage of skilled personnel
• Small domestic market
Strategies to Maximise Opportunities
and Overcome Challenges
Venturing Abroad
Due to limited resources, Singapore has to look overseas to
achieve further growth
• Regionalisation  Investing in countries with land, labour
and new markets
– Allows Singapore and the host country to grow and
promotes development in the region
– China (Suzhou)
– India (Karnataka)
• Spread investment across the world allows for Singapore’s
growth to be maintained even if markets and investment
opportunities in one country / region is weakened
Why Karnataka?

Near Mumbai, Chennai and

New Delhi

Encourages
Foreign
Investment and Skilled IT
Supports Businesses Professionals
Strategies to Maximise Opportunities
and Overcome Challenges
Expanding Market Reach Through
Economic Co-operation
Due to our small population, we have a small
domestic market
Economic and trade ties must be established
with other countries to enable local
companies to sell their goods to overseas
markets
• Sign Free Trade Agreements (FTAs)
Strategies to Maximise Opportunities
and Overcome Challenges
Expanding Market Reach Through
Economic Co-operation
Benefits of FTAs:
• Enjoy more choice in goods and services
• Standards will improve with increased foreign
competition
• Singapore companies can sell their goods
overseas and increase their profits
• Local companies find it easier to venture abroad
Strategies to Maximise Opportunities
and Overcome Challenges
Expanding Market Reach Through
Economic Co-operation
Establishment of Special Economic Zones
(SEZs)
• A geographical region in a country where there
are less stringent economic laws
• Zones of rapid economic growth by using tax
incentives to attract foreign investment
Strategies to Maximise Opportunities
and Overcome Challenges
Managing Resources Efficiently
Developing People
Attracting Foreign Talent
Managing the Environment
• Managing Limited Land Resources
• Co-operation with Regional and International
Organisations
• Public Education
Strategies to Maximise Opportunities
and Overcome Challenges
Managing Resources Efficiently
Developing People
• Promoting Local Entrepreneurship and
Technopreneurship
– With globalisation, business competition will
increase
– Singapore needs more local entrepreneurs to
take risks and come up with products to
compete with global competitors
Strategies to Maximise Opportunities
and Overcome Challenges
Managing Resources Efficiently
Developing People
• Promoting Local Entrepreneurship and
Technopreneurship
– Amending bankruptcy laws to allow failed
entrepreneurs to start again
– Recognising outstanding entrepreneurs
Strategies to Maximise Opportunities
and Overcome Challenges
Managing Resources Efficiently
Developing People
• Promoting Continuous Learning among the Workforce
– Globalisation will render some jobs obsolete
– Singapore Workforce Development Agency (WDA)
established to ensure workforce remains competitive
– Skills Upgrading (Employability Skills Systems – ESS)
– Equip workers with skills to cope with new demands
and job environments
– Skills Development Fund (SDF) – financial assistance to
employers to encourage training and skills upgrading
Strategies to Maximise Opportunities
and Overcome Challenges
Managing Resources Efficiently
Attracting Foreign Talent
• Declining birth rate and requires new skills in a
knowledge-based economy
– Need to attract foreign talent to meet manpower needs
– Foreign Talent also brings in foreign business investment
potential
– Create more business opportunities  More Jobs
– Adds diversity to our cultural landscape and makes us
cosmospolitan
– Foreign Talent with specialised skills
Three Pillars of Sustainable
Development
Strategies to Maximise Opportunities
and Overcome Challenges
Managing the Environment
• Managing Limited Land Resources
– Singapore is small (680km2) so land planning is
important to maximise land use

– Challenging  not all land can be developed

– Land use planning must ensure that high-standard

facilities for housing, transportation, recreation,
commerce, defence and education must be built to
ensure sustainable growth
Strategies to Maximise Opportunities
and Overcome Challenges
Managing the Environment
• Managing Limited Land Resources
– Preservation of nature sites
– Singaporeans can enjoy natural environment
– Waste Disposal
– Current facilities on Pulau Semakau landfill will
last up to 2030
– Need to prolong lifespan while sourcing for
alternatives
– Infrastructure includes waste disposal plants at
Tuas, Ulu Pandan, Tuas South and Senoko
Strategies to Maximise Opportunities
and Overcome Challenges
Managing the Environment
• Co-operation with Regional and International
Organisations
– Co-operating with ASEAN to solve the haze issue
– Helping Indonesia detect forest fires with satellite
imaging
– Hosting ASEAN Ministerial Meeting on Haze
– Globally, Singapore signed agreements to restrict the
use of harmful ozone depleting substances
– Phased out the use of chlorofluorocarbons (CFCs)
Strategies to Maximise Opportunities
and Overcome Challenges
Managing the Environment
• Public Education
– For effective long-run environmental protection,
Singaporeans must adopt environmentally-friendly
ways and be instilled with a sense of responsibility
and personal interest to keep their surroundings
clean
– Education in schools and for the general public
– Recycling and waste minimisation
– Clean and Green Week
– Bring Your Own Bag Day