Sustaining Economic Development In A Globalizing World

Sustaining Economic Sustaining Economic Development in a Development in a Globalizing WorldGlobalizing World

Drivers of globalizationDrivers of globalization

Drivers of GlobalisationDrivers of Globalisation

Developments in transportation and Developments in transportation and communicationscommunications• Transporting products, people, materials Transporting products, people, materials

and information from one place to and information from one place to anotheranother


TransportationTransportation• Made the world smallerMade the world smaller• Use of steam engines, jet aircraft, vessels, cUse of steam engines, jet aircraft, vessels, c

ontainerisationontainerisation• Airports, seaports, railways and highwaysAirports, seaports, railways and highways• Efficient network and movement Efficient network and movement


CommunicationsCommunications• Use of telephone, emails, fax, video confereUse of telephone, emails, fax, video confere

ncing, satelite technology, optical fibre, intencing, satelite technology, optical fibre, internetrnet

• Fast transfer of informationFast transfer of information• Quick access to information about new proQuick access to information about new pro

ducts and placesducts and places• Better coordination and control to worldwiBetter coordination and control to worldwi

de activitiesde activities


Transnational Corporations (TNCs)Transnational Corporations (TNCs)• Microsoft Corporation, Toyota MotorMicrosoft Corporation, Toyota Motor• Source for bigger market, lower costsSource for bigger market, lower costs• Source for components around the worldSource for components around the world


Impact of GlobalisationImpact of Globalisation

Impacts of GlobalisationImpacts of Globalisation

Economic ImpactEconomic Impact• Improve standard of livingImprove standard of living• Increased competition among nationsIncreased competition among nations


Social ImpactSocial Impact• Increased awareness of foreign cultureIncreased awareness of foreign culture• Loss of local cultureLoss of local culture


Environmental ImpactEnvironmental Impact• Environmental degradationEnvironmental degradation

DeforestationDeforestation Global warmingGlobal warming


Economic ImpactEconomic Impact• Improve standard of livingImprove standard of living

Increased income levelsIncreased income levels• Yr 2000, $4940Yr 2000, $4940• Yr 2004, $5170Yr 2004, $5170• Yr 2005, $5400Yr 2005, $5400

Increased revenue from foreign investment Increased revenue from foreign investment = improved education, health, defense, = improved education, health, defense, housing and transportationhousing and transportation

Varieties of foreign goods = quality lifeVarieties of foreign goods = quality life


Economic ImpactEconomic Impact• Increased competition among nationsIncreased competition among nations

TNCs looking for more TNCs looking for more attractive*attractive* c’tries for inv c’tries for investment estment


Economic ImpactEconomic Impact• Increased competition among nationsIncreased competition among nations

TNCs looking for more TNCs looking for more attractive*attractive* c’tries for investment c’tries for investment Eg. Dalian, in China (see pg 52)Eg. Dalian, in China (see pg 52) Eg. Danish Maersk Sealand shifting transhipment hub froEg. Danish Maersk Sealand shifting transhipment hub fro

m Singapore to Malaysia’s Tanjung Pelepas, Johor m Singapore to Malaysia’s Tanjung Pelepas, Johor Eg. Bangkok’s airport beating HK and Spore Eg. Bangkok’s airport beating HK and Spore *attractive*attractive = well developed infrastructure, sound financial institutions, pol = well developed infrastructure, sound financial institutions, pol

itical stability, accessible transportation routes, low tax rate, encourages itical stability, accessible transportation routes, low tax rate, encourages R&D, support use of IT and high tech industriesR&D, support use of IT and high tech industries


Economic ImpactEconomic Impact• TalentTalent

Find employment in other c’triesFind employment in other c’tries 2.5% of world’s population live outside their bi2.5% of world’s population live outside their bi

rth c’tryrth c’try Brain drain problemBrain drain problem


Economic ImpactEconomic Impact• Widening income gap btw rich and poorWidening income gap btw rich and poor

Developed c’tries experience rapid growth by dDeveloped c’tries experience rapid growth by drawing TNCs and talents from poor areasrawing TNCs and talents from poor areas

Developing c’tries faced trade restrictions, havDeveloping c’tries faced trade restrictions, have lowly skilled workers, labour intensive industrie lowly skilled workers, labour intensive industries, poorly paid by TNCses, poorly paid by TNCs


Social ImpactSocial Impact• Increased awareness of foreign cultureIncreased awareness of foreign culture

through travelling, surfing the internet, watchinthrough travelling, surfing the internet, watching foreign filmsg foreign films


Social ImpactSocial Impact• Loss of local cultureLoss of local culture

Global brands create homogeneous culture Global brands create homogeneous culture Pop culture penetrates to many peoplePop culture penetrates to many people


Environmental ImpactEnvironmental Impact• TNCs set up factories, pollute the air, causeTNCs set up factories, pollute the air, cause

d environmental degradationd environmental degradation



DeforestationDeforestation• Forest cut down to make way for developmentForest cut down to make way for development

Eg. Brazil’s success as a beef exporterEg. Brazil’s success as a beef exporter Eg. Indonesia’s forests cleared for cash crops anEg. Indonesia’s forests cleared for cash crops an

d development projectsd development projects Eg. China’s Three gorges project Eg. China’s Three gorges project

• Soil erosion, extinction of flora and fauna, flooding, wSoil erosion, extinction of flora and fauna, flooding, water pollution, hazeater pollution, haze



Global warmingGlobal warming• Production of greenhouse gases into the Production of greenhouse gases into the

atmosphereatmosphere• Increased global temperatureIncreased global temperature


Environmental ImpactEnvironmental Impact• Increase in an awareness of Environmental Increase in an awareness of Environmental

managementmanagement Want to ensure sustainable development througWant to ensure sustainable development throug

h the preservation of resourcesh the preservation of resources Eg. Conserving energy, use of alternative energy Eg. Conserving energy, use of alternative energy

sources (wind, solar and geothermal power)sources (wind, solar and geothermal power)• Three Gorges Project – building a dam to generate poThree Gorges Project – building a dam to generate po

wer for industrialisationwer for industrialisation


Environmental ImpactEnvironmental Impact• Increase in an awareness of Environmental Increase in an awareness of Environmental

managementmanagement Want to ensure sustainable development througWant to ensure sustainable development throug

h the preservation of resourcesh the preservation of resources Eg. Conserving energy, use of alternative energy Eg. Conserving energy, use of alternative energy

sources (wind, solar and geothermal power)sources (wind, solar and geothermal power)• Three Gorges Project – building a dam to generate poThree Gorges Project – building a dam to generate po

wer for industrializationwer for industrialization


Case Study: SingaporeCase Study: Singapore


Challenges in SingaporeChallenges in Singapore• Transnational terrorismTransnational terrorism• Ageing populationAgeing population• Rise of China and India as competitorsRise of China and India as competitors• Outbreak of diseasesOutbreak of diseases• Economic slowdown in other countriesEconomic slowdown in other countries• Maturing domestic economyMaturing domestic economy


Strategies to overcome challengesStrategies to overcome challenges• Diversifying the Economy to reduce dependDiversifying the Economy to reduce depend

ency on a single industry/ marketency on a single industry/ market• Nurturing growth of SMEs to provide jobs anNurturing growth of SMEs to provide jobs an

d support operations of TNCsd support operations of TNCs


Strategies to overcome challengesStrategies to overcome challenges• Diversifying the economy Diversifying the economy

Venture into Life SciencesVenture into Life Sciences• A*STAR to manage R & D aspectsA*STAR to manage R & D aspects• Set up bio-medical research institution, IMCB (InstitutSet up bio-medical research institution, IMCB (Institut

e of Molecular and Cell Biology) e of Molecular and Cell Biology) • Eg. Diagnostic testkit for SARS antibodies Eg. Diagnostic testkit for SARS antibodies


Strategies to overcome challengesStrategies to overcome challenges• Diversifying the economyDiversifying the economy

Attracting TNCsAttracting TNCs• Generate jobsGenerate jobs• Affirms Singapore’s position Affirms Singapore’s position • Eg. Seagate’s manufacturing activities in Singapore Eg. Seagate’s manufacturing activities in Singapore


Strategies to overcome challengesStrategies to overcome challenges• Diversifying the EconomyDiversifying the Economy

Attracting TNCsAttracting TNCs• Generate jobsGenerate jobs• Affirms Singapore’s position Affirms Singapore’s position • Eg. Seagate’s manufacturing activities in Singapore Eg. Seagate’s manufacturing activities in Singapore



Focus on service industry – educationFocus on service industry – education• Regional hub for education through the set up of branRegional hub for education through the set up of bran

ches of international universities to attract talentsches of international universities to attract talents Eg. University of Pennsylvania's Wharton School of Eg. University of Pennsylvania's Wharton School of

Business, University of Chicago Graduate School oBusiness, University of Chicago Graduate School of Business, Shanghai Jiao Tong University, Stanforf Business, Shanghai Jiao Tong University, Stanford Universityd University



Focus on service industry – tourism Focus on service industry – tourism • Need for Singapore to be innovative in offering man-mNeed for Singapore to be innovative in offering man-m

ade tourist attractionsade tourist attractions• Compete with other countries with natural attractions Compete with other countries with natural attractions

and man-made attractionsand man-made attractions Eg. IRs (Integrated Resorts in Marina Bay and SentEg. IRs (Integrated Resorts in Marina Bay and Sent

osa) to generate revenue and create jobsosa) to generate revenue and create jobs


Strategies to overcome challengesStrategies to overcome challenges• Nurturing growth of Small and Medium EnteNurturing growth of Small and Medium Ente

rprises (SMEs)rprises (SMEs) What are SMEs’ role?What are SMEs’ role?

• Providers of jobsProviders of jobs• Support operations of the TNCsSupport operations of the TNCs• Enhance Singapore’s attractivenessEnhance Singapore’s attractiveness

Eg. Polar Café – a successful SMEEg. Polar Café – a successful SME



rprises (SMEs)rprises (SMEs) Shortcomings of the SMEsShortcomings of the SMEs

• Lack of resourcesLack of resources• Lack of expertise in using advanced technologyLack of expertise in using advanced technology• Lack of skilled professionals to manage company – mLack of skilled professionals to manage company – m

ore family-runore family-run• Lack of capital to venture to overseas marketLack of capital to venture to overseas market



rprises (SMEs)rprises (SMEs) Government’s role in supporting SMEsGovernment’s role in supporting SMEs

• Loan schemes from banksLoan schemes from banks• ASME (Association of Small and Medium Enterprises) tASME (Association of Small and Medium Enterprises) t

o provide assistance o provide assistance • Tax exemption up to three yearsTax exemption up to three years


Strategies to overcome challengesStrategies to overcome challenges• Venturing abroad - regionalizationVenturing abroad - regionalization

Investing in countries with abundant land, lower Investing in countries with abundant land, lower labour costs and new marketlabour costs and new market

Provide expertise and capital to develop industriProvide expertise and capital to develop industrial parks in return for land and labour for Singapal parks in return for land and labour for Singapore companiesore companies


Strategies to overcome challengesStrategies to overcome challenges• Venturing abroad – regionalizationVenturing abroad – regionalization

Ensures Singapore’s economic growth is maintEnsures Singapore’s economic growth is maintainedained

Investment opportunities are spreadInvestment opportunities are spread• Investing in countries with abundant land, lower laboInvesting in countries with abundant land, lower labo

ur costs and new marketur costs and new market• Provide expertise and capital to develop industrial parProvide expertise and capital to develop industrial par

ks in return for land and labour for Singapore companiks in return for land and labour for Singapore companieses



ExamplesExamples• Suzhou Industrial Park = collaboration between China Suzhou Industrial Park = collaboration between China

and Singaporeand Singapore• Singapore Tech Park = collaboration between India anSingapore Tech Park = collaboration between India an

d Singapored Singapore• SingTel has investments over 20 countriesSingTel has investments over 20 countries• Singapore government invests in new markets such as Singapore government invests in new markets such as

Middle East, Latin America and Central and Eastern EuMiddle East, Latin America and Central and Eastern Europerope



Shortcomings Shortcomings • Less attached to SingaporeLess attached to Singapore• Brain drainBrain drain


Strategies to overcome challengesStrategies to overcome challenges• Expanding market through economic Expanding market through economic

cooperationcooperation ProblemProblem

• Small domestic marketSmall domestic market


Strategies to overcome challengesStrategies to overcome challenges• Expanding market through economic Expanding market through economic

cooperationcooperation SolutionSolution

• Sell products to bigger marketSell products to bigger market


Strategies to overcome challengesStrategies to overcome challenges• Expanding market through economic coopeExpanding market through economic coope

rationration How to do it?How to do it?

• FTAs (Free Trade Agreements)FTAs (Free Trade Agreements) ASEAN, NZ, Australia, USA, India, Jordon and SoutASEAN, NZ, Australia, USA, India, Jordon and Sout

h Koreah Korea• SEZ (Special Economic Zones)SEZ (Special Economic Zones)

Less stringent economic lawsLess stringent economic laws Tax and business incentivesTax and business incentives Revitalise the islands of Batam, Bintan and KarimuRevitalise the islands of Batam, Bintan and Karimu

n n


Strategies to overcome challengesStrategies to overcome challenges• Managing resources efficientlyManaging resources efficiently

Develop people byDevelop people by• Promoting local entrepreneurship and technopreneurPromoting local entrepreneurship and technopreneur

shipship Willing to take risks Willing to take risks Coming up with new productsComing up with new products

• Amending bankruptcy lawsAmending bankruptcy laws• Giving recognition to outstanding local entrepreneursGiving recognition to outstanding local entrepreneurs

Eg. Kenny Yap of Qian Hu Fish FarmEg. Kenny Yap of Qian Hu Fish Farm



Promoting continuous learning among Promoting continuous learning among workforceworkforce

• WDA (Workforce Development Agency) to ensure WDA (Workforce Development Agency) to ensure workforce remains competitiveworkforce remains competitive

Skills upgrading Skills upgrading ESS (Employability Skills Systems) to help ESS (Employability Skills Systems) to help

workers adapt to new jobsworkers adapt to new jobs SDF (Skills Development Fund) provides SDF (Skills Development Fund) provides

financial assistance for skills upgradingfinancial assistance for skills upgrading



Attracting Foreign TalentAttracting Foreign Talent• To meet manpower needsTo meet manpower needs• Bring in overseas contactsBring in overseas contacts• More business opportunities, create more jobsMore business opportunities, create more jobs• Diversify cultural landscape of SporeDiversify cultural landscape of Spore

Eg. Engineers, Doctors, Craftsmen, artists, chefs etEg. Engineers, Doctors, Craftsmen, artists, chefs etc.c.


Strategies to overcome challengesStrategies to overcome challenges• Managing the Environment - landManaging the Environment - land

To sustain growth and enjoy good quality of lifeTo sustain growth and enjoy good quality of life

• Eg. Marina Bay will be integrated as a financial hub witEg. Marina Bay will be integrated as a financial hub with quality housing, recreational and leisure facilitiesh quality housing, recreational and leisure facilities

• Eg. Jurong Island is a chemical hubEg. Jurong Island is a chemical hub• Eg. Sungei Buloh Wetland Reserve, Chek Jawa are preEg. Sungei Buloh Wetland Reserve, Chek Jawa are pre

served nature sitesserved nature sites• Eg. Pulau Semakau used for waste disposalEg. Pulau Semakau used for waste disposal


Strategies to overcome challengesStrategies to overcome challenges• Managing the Environment – Cooperation wManaging the Environment – Cooperation w

ith organizations ith organizations To sustain growth and enjoy good quality of lifeTo sustain growth and enjoy good quality of life

• Eg. Cooperation with ASEAN to fight hazeEg. Cooperation with ASEAN to fight haze• Eg. Signed international agreement that restricts the uEg. Signed international agreement that restricts the u

se of harmful ozone depleting substances (eg. CFCs)se of harmful ozone depleting substances (eg. CFCs)


Strategies to overcome challengesStrategies to overcome challenges• Managing the Environment – Public Managing the Environment – Public

Education Education To sustain growth and enjoy good quality of To sustain growth and enjoy good quality of

lifelife• Recycling in schoolsRecycling in schools• Clean and Green WeekClean and Green Week• Exhibitions, seminar, workshopsExhibitions, seminar, workshops• Beach cleaningBeach cleaning• Planting of treesPlanting of trees• ““Bring Your Own Bag” day at supermarketsBring Your Own Bag” day at supermarkets

Sustaining Economic Development In A Globalizing World

Technology

Transcript of Sustaining Economic Development In A Globalizing World