Social Studies Revision Resource Key Driving Forces of Globalisation What is Globalisation?

? The process by which people, their ideas and their activities in different parts of the world become interconnected or integrated. Why must you know this? So that you can evaluate which KEY DRIVING FORCE OF GLOBALISATION is the most effective. The Key Driving Force which can allow the Globalisation process to work best (i.e. allows people, their ideas and their activities in different parts of the world to become interconnected or integrated) Factors: Key Driving Forces of Globalisation Developments in Transportation and Communications 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 containerization have shrunk the world in terms of the 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. Developments 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 efficiently, allowing people, their ideas and their activities have 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 economies 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. NB: Do note they can also put Developments in Transport and Communication together and compare it against Transnational Corporations.
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Analysis of the Driving Forces of Globalisation Developments in Transport Important in linking people, materials and products from one place to another. However, it only drives people, materials and products so there is still reliance on developments in communication to further drive globalisation Developments in Communication Most effective driving force of Globalisation because developments in communication have made it so advanced that information which is necessary for people, their ideas and their activities to become integrated and interconnected is transmitted almost immediately, allowing for the Globalisation process to take place effectively. Transnational Corporations Important in linking people, their ideas and their activities globally but needs developments in transport and communications in order to be successfully carried out.

Social Studies Revision Resource Impact of Globalisation Factors: Impact of Globalisation Economic: Improvement in standard of living, Increased competition among 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 investment, 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 investment which will result in them gaining further economic growth. However, poorer countries who do not have good infrastructure and political instability are unable to attract investors and as a result remain trapped in the poverty cycle.

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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 the brain drain. Widening Income Gap between the Rich and the Poor As Globalisation has resulted in rapid development in many countries but has also contributed to the spread of poverty in many countries, resulting in a widening income gap between rich and poor countries. Developed countries usually own many manufacturing activities and earn revenue from them. TNCs are usually from developed countries are able to draw investments, talent and resources away from poor areas and relocate them to regions that benefit them. International trade also generates a lot of revenue for developed countries. However, developing countries often face trade restrictions put up by developed countries and are often not able to produce better quality goods like the developed countries. Globalisation has also led to a widening income gap within developed countries where the rich get richer while the poor and lowly-skilled get poorer or face economic uncertainties such as retrenchment. This may lead to potential social tension between the rich and the poor. Social Impact: Increased Awareness of Foreign Culture Due to Globalisation, people have become more 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 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 via 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.

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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 losses in revenue from 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 the negative effects of Globalisation, there has also been 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

Social

Environmental Good Effects - Environmental Management

Good Effects Good Effects Improvement in - Increased Awareness Standard of of Foreign Culture Living Competition Among Nations (Investment & Market) Bad Effects Bad Effects - Competition - Loss of Local Culture Among Nations (Talent) Widening Income Gap between the Rich and the Poor

Bad Effects Global Warming Deforestation and Related Problems

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Social Studies Revision Resource Singapores Strategies to Maximise Opportunities and Overcome Challenges in a Globalising World How do you tell if your strategy maximizes opportunities and overcomes challenges? First of all, the strategies have to come together and solve some the following problems faced by Singapore: o Economic slowdown in other countries o Disease outbreak e.g. SARS, bird flu o Rise of China and India as competitors o Transnational terrorism o Ageing population o Maturing domestic economy Strategy #1: Diversifying the Economy In order to ensure that Singapore is able to maximize its opportunities and overcome challenges like a maturing domestic economy and to remain competitive enough to attract foreign investors, Singapore diversified its economy and aims to be a centre for technology-intensive, high value-added manufacturing activities such as chemical engineering and pharmaceuticals. It has also built up its research and development capabilities. This not only attracts talents in these fields who take advantage of Singapores, but brings in TNCs who set up their high value-added manufacturing activities here. This not only generates jobs but also affirms Singapores position as a manufacturing hub which in turn generates more economic growth when more TNCs are attracted to set up manufacturing activities in Singapore. 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. Tourism has also been promoted as a generator of 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 dependence on a single industry or market. Should any sector of the economy slow down, the other sectors can continue to generate revenue. Strategy #2: Nurturing Growth of Small and Medium Enterprises (SMEs) SMEs are important providers of jobs as they make up a large percentage of businesses in the Singapore economy. They also support the operations of TNCs by supplying them with components in the manufacturing process. As such, they enhance the attractiveness of Singapore as a regional manufacturing and services hub.

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However, SMEs are sometimes unsuccessful as they face problems like being unable to compete with larger corporations which have more resources. They sometimes lack expertise in using advanced technology to bring their operations up-to-date which will hinder productivity and lessen their competitiveness. Some SMEs which are family-run have a shortage of skilled professionals to manage the company. They also face a small domestic market as many of them lack the capital to venture into overseas markets. (This portion deals with negative effects of this factor can be used when evaluating the effectiveness of this strategy) To allow SMEs to actively contribute to Singapores growth, there are many schemes in place to assist them. Banks have various loan schemes to cater to the needs of SMEs and the Association of Small and Medium Enterprises (ASME) was set up to provide assistance to SMEs in the form of training and seminars to help them enhance their capacity. The government has also given new SMEs tax exemptions to help them cope. By nurturing the growth of the SMEs, the economy can grow, jobs will be created and Singapore will be able to compete with the economies of other countries. Strategy #3: Venturing Abroad With limited land and labour resources, Singapore has to venture abroad to achieve further growth. Singapore does this through regionalization where it invests in nearby countries that have land, lower labour costs and new markets. Singapore provides the expertise and capital to develop projects like industrial parks in host countries while the host countries provide land and labour. This benefits both countries as it generates economic growth for them and the Asian region as a whole. In other to generate economic growth, Singapore also invests in and expands into overseas markets, which ensures long-term growth for Singapore. New markets are sourced out and investments made. The spread of investment across the world is to ensure that Singapores economic growth is maintained even if the markets and investment opportunities in one particular region or country are weakened. As a result of Singapore companies venturing abroad, many Singaporeans are also relocating overseas or studying in universities abroad. There is 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) Strategy #4 Expanding Market Reach through Economic Co-operation In order to cope with a small domestic market and a maturing domestic economy, Singapore needs to establish trade ties with countries around the world to enable local companies to sell their goods to a larger market. One method is through the signing of Free Trade Agreements which bring about closer economic collaboration. This benefits Singapore through the availability of more goods and services, higher service standards through increased foreign competition, cost savings when taxes are removed, new markets and it will be easier for local companies to venture abroad. This will ensure economic growth for Singapore as local companies who profit from the economic co-operation can expand, create jobs and generate growth for the economy. 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
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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. Strategy #5 Managing Resources Efficiently Developing People Promoting local entrepreneurship and technopreneurship - As Singapore has a small population, it is important to develop its people. One way is through promoting local entrepreneurship and technopreneurship so as to allow them to meet the demands of business competition locally and overseas. By developing more local entrepreneurs who are willing to take risks and develop new products, they will be better able to generate economic growth and compete with foreign companies. Entrepreneurship is promoted through schemes like amending the bankruptcy laws to allow failed entrepreneurs to start businesses again. Local entrepreneurs are also recognized for being outstanding to inspire others to achieve greater success. With more entrepreneurs willing to and able to take risks and develop new businesses, Singapore will be able to generate economic growth and compete with foreign companies. Promoting continuous learning among the workforce As Singapore becomes more globalised, some jobs will become obsolete and be replaced by new jobs. The Singapore Workforce Development Agency (WDA) was established to ensure that the workforce remains competitive by creating opportunities for workers to enhance their employability through skills upgrading. Financial assistance is also given to workers so they can take up courses to upgrade themselves. This ensures that Singapores workforce remains upgraded and competitive so that foreign investors will continue to invest in Singapore which will lead to the creation of more jobs and more 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. Strategy #5 Managing Resources Efficiently Managing the Environment Managing the environment is crucial to protect the environment because environmental degradation is often a consequence of globalization. Environmental preservation is one of the three pillars of sustainable development in addition to economic development and social progress. Managing limited land resources - As land is scarce in Singapore, the management of limited land resources is necessary so that high standards facilities for housing, transportation, recreation, commerce, defence and education can be built. These facilities will enable Singaporeans to enjoy a good quality of life and ensure that Singapore can sustain growth in a globalizing world.
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It is also important to preserve nature sites so that future generations can enjoy the natural environment in Singapore. Land is set aside for nature reserves so as to preserve a wide range of natural habitats in Singapore, from forests to mangrove swamps. Land is also allocated for waste disposal because land on Singapore itself is limited. A waste disposal landfill was created on Pulau Semakau to manage Singapores waste disposal needs. This contributes towards sustainable development by preserving nature for future generations and ensuring our future waste disposal needs are met. Co-operation with regional and international organizations Singapore is active in solving regional and international environmental problems which may affect Singapore and other countries in the region. When environmental problems like the haze happens, it disrupts economic and tourist activity. By co-operating with these organizations to solve the problems, economic growth will not need to be halted as economic activities will be able to continue. Singapore has also co-operated at the international level to look into environmental problems that are global in nature. Public Education In order to ensure that Singapores efforts in environmental protection to be effective, Singaporeans must adopt environmentally-friendly ways and be instilled with a sense of responsibility and personal interest to keep their surroundings clean. By educating members of the public and school children on how to go about recycling, minimizing their waste and reducing the excessive use of public bags, Singapore will be able to sustain its environment and preserve it for future generations.

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