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Key driving force of globalization

1) Development in transportation
Transportation systems are the means by which people, materials and products are transferred from
one place to another.
A major improvement in transportation in the 19
th
century included the widespread use of the steam
engine. In the 20
th
century, the commercial jet aircraft, large ocean vessels and containerization
greatly increasing the movement of goods and people from one place to another. With these
inventions, the time and cost of moving goods over long distances are greatly reduced. Efficient and
integrated transportation infrastructure comprising of airports, seaports, railways and highway also
facilitated the movement of people and goods
Development in transportation is a key driving force of globalization because the development of
transport system and facilities have shrunk the world making it cheaper and easier and faster for
goods and people to go around the country, enhancing the process by which people their ideas and
their activities become interconnected and integrated through such exchange of goods and people,
driving globalization.

2) Development in communications
Communication systems are the means by which information is transmitted from one place to
another in the form of ideas, instructions and images. Improvement in technology has caused faster
and more convenient communications among people in different locations as possible.
Communication tools- telephone, e-mail and fax, satellite technology and optical fiber systems
allowed information to be transmitted at high speed. The internet allowed access to information,
online reservation, etc.
Because of this, consumers are able to access information and exchange ideas conveniently and
efficiently, without being physically present, making communication go beyond physical boundaries
and become integrated through such exchange, driving globalization. Furthermore, advancement in
communication technology allowed TNCs to coordinate and control their worldwide activities easily
and more efficiently, allowing more people, ideas and activities become more integrated and
interconnected and hence driving globalization.

3) Transnational corporations (TNCs)
TNCs are large global firms that operate in a number of countries and have production or service
facilities outside their country of origin, example, Microsoft Corporation and Toyota Motor. These
worldwide operations are set up to source for new markets, lower the cost of producing their goods
or to source for components before assembling their products in other countries
Due to the TNCs setting up branch offices in many different countries, this has caused raw materials,
labor and investments to go beyond their country of origin, this has led the economies to become
more integrated as people and their activities become interconnected with TNCs, hence driving
globalization.

Weighing
Developments in
Transport
Developments in
Communication
Transnational
Corporations
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
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.
Important in linking people,
their ideas and their
activities globally but needs
developments in transport
and communications in
order to be successfully
carried out.



















Impact of globalisation
1) Economic impact
Improvement in standard of living
Increased competition among nations
Talent
Widening income gap between the rich and the poor
Positive impact Negative impact
E1: improvement in standard of living
Countries which are globalising have an increase in
income levels because when open their countries to
trade and foreign investments, the country would
have an increase in revenue. The revenue earned by
the government allows them to provide better
standards of education, healthcare, defence housing
and transportation. With free trade, there is an
increase in lifestyle choices.
With more revenue earned from foreign investments
the govt can use it to improve areas such as
education, housing for the benefit of the people. The
consumers also have access to a wider variety of
goods instead of just their own product. There will be
an increase in lifestyle choices and a higher quality of
life.
E2: increased competition among nations
Competition faced by Singapore
Singapores container port faced competition from
Malaysias new Tanjung Pelepas port in Johor worlds
biggest container shipping line, Maersk Sealand, a Danish
company decided to shift its transhipment hub to there
because of cheaper rates and flexibility in operations.
Singapore Changi International Airport finished 24
th
while
Bangkok international Airport was worlds 12
th
busiest
airport from Jan to May 2006.
The competition for investments and markets can lead to a
loss of investments, resulting in a drop in the countrys
economy. Poorer countries with poor infrastructure or
political instability will also lose out in the competition and
remain trapped in the poverty cycle




E2:Increased competition among nations
In a globalizing world, govt compete to attract TNCs to
invest in a country. Countries that are able to offer
incentives to foreign investors will be more successful.
Example: China- popular among foreign investors
because of low production costs/ labour- enabled
cities such as Suzhou, Wuxi and Dalian to develop
rapidly (well-developed infrastructure)
The competition for investments and markets can lead
to more growth in the country where infrastructure is
more developed, attracting even more investments ;
E3: Talent
With globalisation, people are able to move from
country to country in search of leisure activities and
employment. Globalisation has provided the highly
skilled workforce the opportunity to find employment
in another country. Advanced economies with stable
or shrinking populations are searching the world for
E3: Talent
Increase in workers mobility leads to a situation of brain
drain as skilled professional are attracted to opportunities
in other countries. Emerging economies from Ireland and
India to china, Korea and Taiwan- are trying to attract back
their own best and brightest
The loss of talents in a country due to globalization can lead
new talent pools.
The competition for people with skills and talent can
lead to growth in a country where there is a ready
pool of talent, thus attracting more investors to the
country and improving the countrys economy.
to a loss of capable leaders and workers in the economy or
politics, making the country unstable and unable to make
economic progress.
E4: widening income gap between rich and poor
countries (and within developed countries)
The developed countries are experiencing rapid
income growth as they own the most of the
manufacturing activities. TNCs are from developed
countries in North America and Western Europe.
TNCs are able to draw investments, skilled people
and resources away from the poor people and
relocate them in regions that benefit them.
International trade generates much revenue for
them.
E4: widening income gap between the rich and the poor
countries.
Developing countries often face trade restrictions put up by
developed countries. They are not capable in producing
better quality goods that fetch higher prices compared to
developed countries. TNCs often locate labour intensive and
low value-added production in poorer.
Globalisation has thus caused the richer countries to make economic progress because of better opportunities, while
the poor and lowly-skilled workers face economic uncertainties such as retrenchment. The widening income gap may
lead to social problems such as increasing tension between the rich and poor.

2) Social impact
Increased awareness of foreign culture.
Loss of local culture
Positive impact Negative impact
S1: increased awareness of foreign culture
Through globalisation, people have become more
aware of different cultures. They are able to learn the
history, culture and way of life of people around the
world through travelling, surfing the net and watching
foreign movies.
Through improved communications and transport,
people around the world will have greater exposure to
other cultures thereby enriching their own
experiences and helping them to relate to people
from across cultures and enhancing understanding
between them.

S2: loss of local culture
Through globalization, global brands such as Starbucks and
Macdonalds dominate the consumer market in developing
countries, creating a homogenous culture with their outlets
of identical appearance and methods of operations.
Globalisation also led to the spread of pop music. These
cultures include rap music, MTV and Hollywood movies. This
influence youths negatively and caused them to lose interest
in their local culture
The loss of local culture poses a serious problem to a country
because when the culture is eroded, it will be hard to
recreate. As such the identity of the country is at stake.


3) Environmental impact
Globalisation is a destructive force to the natural environment in the view of the
environmentalists
TNCs factories use natural resources such as timber, oil and metals at a rapid rate in
developing countries, eager to gain economic benefits at the expanse of the natural
environmentno environment protection due to lack of resources to implement and
enforce environmental regulations.
Positive impact Negative impact
EV3: environmental management
Through globalisation, theres increased in awareness
of environment management. Countries are aware
that sustainable development is the key to further
growththat is the need to preserve environment
well so that future generations can continue to use
the resources to generate income and hence
continue to enjoy high standards of living.
There is increased awareness that a globalising world
requires vast quantities of energy for development.
Hence there is a need to conserve as well as look for
alternative energy sources such as wind, solar,
geothermal power, to provide some of the energy
needed.
Through globalisation, there was an increase
awareness of the need for environment
management, there is more positive action taken in
the developed countries to protect the environment
to ensure that there is sustainable development.
EV1: environmental degradation
Due to globalisation, there was a rapid cutting down of
rainforests to make way for development of industries,
agriculture, housing, transportation and economic activities
such as forestry mining and cattle ranching.
Example: brazil cut down rainforest to meet demands of
Brazilian beef. Rainforest in Indonesia are being cleared by
small scale farmers and plantation owners to plant cash
crop and cleared for development projects. The three
gorges project in China to generate electricity.
These activities led to environmental problemssoil
erosion, extinction of flora and fauna, increase in flooding,
water pollution. Haze also arises due to clearing of the
forests, causing a loss in the tourism industry.
Globalisation causes environmental degradation due to
increasing demand for energy and other resources. Very
often, the environment degradation is irreversible as the
resources are not renewable, but no one may take notice
till its too late. Hence environmental degradation is a
negative impact of globalisation.
EV2: global warming
As a result of globalisation, there is an increase in the
movement of goods and people. The movement of goods
contributed to global warming as aeroplanes and ships
produce large quantities of greenhouse gases such as
carbon dioxide and nitrogen oxides.
Factories and different modes of transportation around the
world emit an enormous amount of fumes into the
atmosphere. This leads to an increase in the average global
temperature.
Increased globalisation contributes to increase global
warming due to the emission of more greenhouse gases
from modern transportation and factories. Global warming
has far reaching consequence as it affects the whole world.
Singapore strategies to maximise
opportunities and overcome challenges?
1) Diversifying economy
In order to ensure that Singapore is able to maximise its opportunities and overcome challenges like
a maturing domestic economy and to remain competitive enough to attract foreign investors,
Singapore diversifies its economies and aims to be a centre for technology- intensive and set up high
value added manufacturing services such as chemical engineering and pharmaceuticals. Singapore
also ventures into life sciences- studying of genetics and development of new medicines. This
involves setting up supporting institutions. (A*STAR) was set up to build up research and
development capability. This ensures Singapore will continue to attract TNCs to set up high value
added manufacturing activities and attract talents. This generates jobs and affirms Singapore
position as a manufacturing hub which in turn generates more economic growth enabling countrys
stability.
Singapore also aims to be the regional hub for education and tourism by attracting international
universities to set up branches here; creating a strong university sector that attracts talent to
contribute economic growth. Integrated resorts tourist attractions to strengthen Singapores
position as a choice destination in Southeast Asia and generate economic benefits. By developing
various sector of the economy will help reduce Singapores dependence on a single industry
ensuring the economic stability in the event of a downturn in one sector. A stable economy would
ensure sustainable economic development and enhance Singapores competitiveness.
2) Nurturing the growth of SMEs
SMEs are important providers of jobs as they make up a large percentage of businesses in
Singapores economy. They also support operations of TNCs by supplying them with components in
the manufacturing process. As such they enhance attractiveness of Singapore as a regional
manufacturing and services hub.
To allow SMEs to contribute to growth, schemes are in place to assist them. Loan schemes were
provided from banks. Association of Small and Medium Enterprises (ASME) set up to provide
assistance and workshops organised for members to enhance capacity. The govt gave SMEs tax
exemptions on their first 100 000 income for up to 3 years, to help them cope. Nurturing the growth
of SMEs promotes development as local business will be able to generate employment, establishing
Singapore as a regional and services hub, thereby making Singapore more competitive in a
globalizing world.
However, SMEs have limited success as are unable to compete with large corporations as they lack
resources and expertise in using advance technology. There is also a shortage of skilled professionals
to manage company. They also face a small domestic market with the lack of capital to venture into
the overseas market. This will reduce productivity and competiveness.
3) Venturing abroad
With limited land and labour resources, Singapore has to venture abroad to achieve further growth.
Singapore does this through regionalisation-investing in nearby country with abundant land, lower
labour costs and investments. Singapore provides expertise and capital to develop industrial parks in
host countries while they provide land and labour for us. An example is the Suzhou Industrial park.
This benefits both countries as it generates economic growth for them and Asia as a whole.
To generate economic growth, we invest and expand into overseas markets; Middle East and Latin
America, to ensure long term growth. New markets are sourced out and investments made. By
internationalising our economy, there is a spread of investments across the world and ensures that
Singapores economy growth is maintained even if markets and investment opportunities in one
region are country are weakened.
Venturing abroad helps to sustain economic development as it opens up new markets and
overcomes our physical limitations. This helps us to tap resources in region and makes Singapore
more competitive in a globalizing world.
However, as a result of Singapore venturing abroad, many Singaporeans are also relocating overseas
or studying in universities abroad. They may lose touch and feel less attached to Singapore.
4) Expanding market through reach through economic cooperation.
In order to cope with a small domestic market and maturing domestic economy, Singapore needs to
establish trade ties to enable local companies to sell goods to larger market. The government signs
the free trade agreement (FTAs) with other countries- a legally binding agreement to bring about
closer economic collaboration example; with ASEAN countries, New Zealand, Japan, etc. this benefits
Singapore through the availability of more goods, companies also enjoy savings as taxes are
removed allowing local company easier to venture abroad.
Singapore also cooperates with other countries by setting up Special Economic Zones (SEZs) where a
geographical region in a country is set aside. There is less strict economic growth by using tax and
business incentives to attract foreign investments.
Economic cooperation promotes friendly ties and this brings about sustained economic
development as Singapore faces stronger economic competition. Such economic cooperation results
in a win-win situation as both parties stand to benefit. In this way, Singapore will have more trade
ties and greater economic stability even if markets and investments locally or in a particular region
are weakened.
5) Managing resources efficiently
I. Developing people
Promoting local entrepreneurship and technopreneurship
Promoting continuous learning among workforce
Attracting foreign talent
a. Promoting local entrepreneurship and technopreneurship
As Singapore has a small population, it is important to develop its people. Promoting local
entrepreneurship and technopreneurship allow them to meet the demands of business competition
locally and overseas. By developing more local entrepreneurship that is willing to take risks and
develop new products, they will be able to generate economic growth.
Entrepreneurship is promoted through amending of bankruptcy law to allow entrepreneur who have
failed to start over again. Recognition is also given to inspire others to achieve success.
With more entrepreneur willing to take risks and develop new business, they will be able to expand
locally and overseas and also come out with products to compete with foreign companies. Thus, we
can stay competitive in a globalizing world and not get left behind.
b. Promoting continuous learning among the workforce
As Singapore becomes more globalised, some jobs would become obsolete and be replaced by new
jobs. The Singapore Workforce Development Agency (WDAs) was established to ensure workforce
remain competitive by enhancing workers employability through skills upgrading. Employability
Skills System (ESS), Skills development Fund (SDF) for employers to train and upgrade skills of
workers.
Workers who upgrade their skills can adapt to the changing needs of a globalizing economy will
continue to be employed. They keep themselves relevant and competitive, and attract foreign
investors to Singapore with a ready pool of skilled workers. This helps Singapore to stay competitive
in a globalizing world.
c. Attracting foreign talent
Due to declining birth rate and the requirement of mew skills in a knowledge based economy, there
is a need to attract foreign talent to meet manpower needs. Foreign talents bring Singapore new
business contacts creating more opportunities and jobs. Foreign talent also adds to the diversity to
the cultural landscape of Singapore and this makes the country more cosmopolitan. Singapore also
welcomes foreigners who possess specialised skills as they can make up for the lack of local
expertise.
With foreign talent available as an additional pool of human resource for Singapore, we can attract
foreign investors to invest in Singapore, and also to create more jobs in Singapore for the locals.
Singapore can thus stay competitive in a globalizing world.
II. Managing the environment
a. Managing limited land resources
As land is scarce in Singapore, the management of limited land resources is necessary as not all land
can be developed ; 40% of land area used as water catchment areas, land for military uses have
careful land use planning to allow for high standard facilities for housing, transportation, etc. there is
a total of live-work-play environment in some areas such as Marine Bay. Land is set aside to be
preserved for future generations to enjoy the natural environment. Land is allocated for waste
disposals, there is also a need to prolong its lifespan as far as possible.
With careful land use planning, high standard facilities can be built, enabling Singaporeans to enjoy
good quality of life and ensure Singapore can sustain growth in a globalizing world.
b. Cooperation with regional and international organisation
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, it disrupts
economic and tourist activity. Singapore helped Indonesia detect forest fires. We also hosted ASEAN
ministerial meeting on haze. Singapore worked with other countries to look into environmental
problems that are global in nature and signed international agreements to restrict use of CFCs.
By co-operating with these organisations to solve the problems, economic growth will not need to
be halted as economic activities will be able to continue. Environmental problems can also be
combated ensuring a sustainable growth for Singapore.
c. Public education
In order to ensure that Singapores effort in environmental protection to be effective, Singaporeans
must adopt environmentally friendly ways and be instilled with a sense of sense of responsibility and
personal interest to keep the surrounding clean. By educating members of the public, for example
clean and green week, an annual campaign to educate the public and school children on how to go
about recycling, will thus minimize their waste and reduce the excessive use of plastic bags. Bring
your own bag day by NEA etc. this encourages shopper to reduce the excessive use of plastic bags.
Singapore will be able to sustain its environment and preserve it for future generations.

With proper environmental management, Singapore is able to ensure sustainable economic
development in the long term.