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.
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
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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.
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
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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
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
Environmental
Good Effects
- Environmental
Management
Bad Effects
Global Warming
Deforestation
and Related
Problems
Social Studies Revision Resource – Singapore’s 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
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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
Singapore’s, but brings in TNCs who set up their high value-added manufacturing
activities here. This not only generates jobs but also affirms Singapore’s
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 Singapore’s position as a choice
destination in Southeast Asia and generate economic benefits. By developing
various sectors of the economy will help reduce Singapore’s 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.
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 upto-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 Singapore’s 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
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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 Singapore’s 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 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
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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
Singapore’s 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
Singapore’s 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.
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
Singapore’s 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 cooperated at the international level to look into environmental problems that are global
in nature.
Public Education – In order to ensure that Singapore’s 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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