Globalization Chapter 2, Sec 4 Social Studies. What is Globalization? The process by which PEOPLE,...
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Transcript of Globalization Chapter 2, Sec 4 Social Studies. What is Globalization? The process by which PEOPLE,...
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 InternetSelling 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 clothesDriving Made in Japan carsSipping 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?http://www.youtube.com/watch?v=yQE4j5Mxr1M
Key Driving Forces of Globalization
1) Developments in transportation and communicationsEnables globalization by encouraging it:
Transport systems are the means by which people, products and materials are transferred from one place to anotherCommunication 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 communicationsTransportation
Improvements in transport technology has “shrunk” the world19th century steam engine 20th century jet engine, large ocean-going vessels move peopleContainerisation moves goods fast and cheap over long distances (ships trucks)
Key Driving Forces of Globalization
1) Developments in transportation and communicationsTransportation
Increasing mobility of goods and peopleCountries 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 communicationsCommunications
Faster and more convenient communicationPeople all over the globe can communicate via telephone, e-mail, fax, video conferencing, etcSatellite technology allows for simultaneous communicationOptical fibre systems can transmit large amounts of information and very high speeds
Key Driving Forces of Globalization
1) Developments in transportation and communicationsCommunications
Internet has enabled consumers to access information instantly, conveniently and efficientlyInternet 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 communicationsCommunications
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 CompaniesLarge global firms that operate in a number of countries and have production and service facilities outside the country of their originExample: Microsoft, Toyota
Key Driving Forces of Globalization
2) Transnational CompaniesTNCs set up operations in different parts of the world because:
Sourcing for new marketsLowering cost of productionProduction of different parts for products and assembly done in a variety of countries
Impact of Globalization1) Economic Impact
Improvements in Standards of LivingIncreased Competitions among Nations
Investment and MarketTalent
Widening Income Gap between the Rich and Poor
Impact of Globalization3) Economic Impact
Environmental DegradationDeforestation and Related ProblemsGlobal WarmingEnvironmental Management
Impact of GlobalizationEconomic Social Environmental
Good Effects- Improvement in Standard of Living- Competition Among Nations (Investment & Market)
Good Effects- Increased Awareness of Foreign Culture
Good Effects- Environmental Management
Bad Effects-Competition Among Nations (Talent)- Widening Income Gap between the Rich and the Poor
Bad Effects- Loss of Local Culture
Bad Effects- Global Warming- Deforestation and Related Problems
Impact of Globalization1) Economic Impact
Improvements in Standards of LivingAs 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 ImpactIncreased 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 growthSeaport handles high passenger and container cargo volumesAirport handles more than 88 routesMore than 10 banks and financial institutions Renowned financial institutions
Dalian (Northern China)
Foreign manufacturing companies enjoy lower taxation ratesHi-Tech Industrial Park which encourages R&D in ITRapid growth stems from all these initiatives
Tanjung Pelepas Port (M’sia)Rival port along the Straits of MalaccaWorld’s biggest container shipping line, Maersk (Denmark) shifted its business from Pasir Panjang CT in Singapore to Tajung PelepasTanjung Pelepas intends to compete with Singapore and move into the forefront of the transshipment business in SE AsiaThe 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 ImpactIncreased 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 ImpactIncreased 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 ImpactWidening Income Gap Between the Rich and the Poor
Due to rapid development in many countries and the spread of poverty in othersDeveloped countries experience rapid income growth as they own most of the manufacturing activities
Impact of Globalization
1) Economic ImpactWidening 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 areasInternational trade has generated much revenue for them
Impact of Globalization
1) Economic ImpactWidening Income Gap Between the Rich and the Poor
However, Developing Countries face trade restrictions put up by Developed CountriesThey 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 Globalization1) 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 retrenchmentWidening income gap can lead to social problems, increasing tension between the rich and the poor
Impact of Globalization2) Social Impact
Increased Awareness of Foreign CultureTravel, the Internet, mass media (products of globalisation allow you to learn more about foreign culture
Loss of Local CultureGlobal (Western) brands dominate consumer markets in developing countriesCreation of homogenous culture across the worldSpread of pop culture and erosion or loss of local cultureNegative influence of youthEnforced beliefs
Impact of Globalization3) Environmental Impact
Depletion of natural resources by TNCsConcern over profits vs. protection of the environmentLack of funds to implement environmental protectionEnvironmental Degradation
Deforestation and Related ProblemsGlobal WarmingEnvironmental Management
Impact of Globalization3) Environmental Impact
Environmental DegradationDeforestation 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 WarmingEnvironmental Management
Impact of Globalization3) Environmental Impact
Environmental DegradationDeforestation and Related Problems
• Soil erosion, extinction of flora and fauna, flooding and haze• Loss in tourism (haze)• Water pollution
Global WarmingEnvironmental Management
Impact of Globalization3) Environmental Impact
Environmental DegradationGlobal 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
Strategies to Maximise Opportunities and Overcome Challenges
Diversifying the EconomyTechnology-Intensive, High Value-Added ManufacturingLife SciencesRegional Hub for Services (Education) Tourism (Integrated Resorts)
Strategies to Maximise Opportunities and Overcome Challenges
Diversifying the EconomyTechnology-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 EconomyTechnology-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 EconomyRegional 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 EconomyRegional 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 jobsSupport 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 AbroadDue 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
Skilled IT Professionals
Encourages Foreign Investment and Supports Businesses
Strategies to Maximise Opportunities and Overcome Challenges
Expanding Market Reach Through Economic Co-operation
Due to our small population, we have a small domestic marketEconomic 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 EfficientlyDeveloping PeopleAttracting Foreign TalentManaging the Environment• Managing Limited Land Resources• Co-operation with Regional and
International Organisations• Public Education
Strategies to Maximise Opportunities and Overcome Challenges
Managing Resources EfficientlyDeveloping 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 EfficientlyDeveloping 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 EfficientlyDeveloping 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 EfficientlyAttracting 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
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