Key driving forces of globalization

Factors: Transport & communications, Transnational Corporations(TNCs)

Macro Format: XY factor is an important driving force of globalization. … Thus XY

factor is an important driving force of globalization.

Transport: Improvement in transportation technology has shrunk the world

considerably. This allows people to travel quickly to different parts of the world. An
example of such improvement is the proliferation of commercial jet aircraft. Such
technology reduce the time and cost of moving goods over long distances. This
allows people to travel all over the world and experience different cultures, which
leads to globalization.

Communications: Improvement in technology has made communications among

people in different locations faster and more convenient. An example is the invention
of the internet which allows consumers to buy products from all over the world. This
enables people to access information from any part of the world which leads to
globalization.

TNCs: TNCs are large global firms that operate in a number of countries and have
production or service facilities outside the country of their origin. These worldwide
operations are coordinated and controlled by the headquarters which are located in
the country of origin. An example is the production of Boeing planes which uses
components from around the world like wing tips from Korea and wings from Japan.
TNCs thus integrate economies around the world which leads to globalization.

BOC: Communications>Other factors: Improvements in communication is the key

driving force of globalization as it affects the most people. The key to globalization is
the spread of knowledge and cultural influences around the world. The
instantaneous communication of ideas through the improvements in technology has
made this possible, thus enabling better transport systems and Transnational
corporations to work. If communication was not as advanced as it were, transport
systems and transnational corporations would not be able to coordinate properly and
would not succeed in spreading globalization. Transport systems would not be able
to function properly as crucial information would not be immediately available to
them and transnational corporations would not be able to communicate effectively
with their overseas branches. Thus development in communications is the key
driving force of globalization.

Impact of globalization

Factors: Economic, Social and Environmental

Macro Format: XY factor is an important impact of globalization. … Thus XY factor is

an important impact of globalization.

Do note that Development in Transport and Communications can be presented as one

factor. This section can thus be tested in a two-factor format
Economic: Globalization results in widespread economic impact, both positive and
negative. For example, countries which are globalizing enjoy an increase in income
levels. As they open their doors to foreign investment, they generate more revenue.
However, globalization also results in a widening income gap between the rich and
the poor. TNCs often employ workers from developing nations to take up lowly-paid
jobs such as factory workers. In many instances, these workers experience poor
working conditions. This results in poor living conditions for such workers and
contributes to widening the income gap between the rich and the poor.

Sub-points:

Improvements in standard of living: Many countries which are globalizing have

enjoyed increase in income levels. As countries trade and open their doors to foreign
investment, they earn more revenue. Governments make use of this revenue for
education, health and defense. People living in these countries thus enjoy a higher
standard of living. For example, the average household income in Singapore rose
from $4940 in 2000 to $5400 in 2005.

Increased competition among nations: The opportunity afforded to countries

by globalization also sparks intense competition between nations as they try to trump
over each other to take control of lucrative industrial and commercial sectors. An
example of this is the competition between Singapore and Malaysia over the
shipping industry. The rivalry between the Tanjug Pelapas and Tanjung Pagar ports
has resulted from each country’s desire to be at the forefront of the international
shipping industry, a product of globalization.

Talent: With globalization, people are able to move overseas easily in search
of better job opportunities. People who are highly skilled are in great demand all over
the world, thus such people would choose to live in the country that best caters to
their needs and wants. Countries thus have to compete with each other to attract
talent. For example, 150 million people live outside their country of birth. This shows
that a large number of people are moving abroad for better opportunities.

Widening income gap between rich and poor: Globalization has concentrated
the world’s wealth into a few developed countries. Developed countries are able to
produce better quality goods that fetch higher prices due to the technological
advancements that are available to them. For example, many of the world’s TNCs
like Wal-Mart are from developed countries like the United States. Developing
countries are unable to compete with developed countries in manufacturing ability
and are thus consigned to low-paying jobs. Thus, the income gap between the rich
and the poor is widened as the rich are able to develop rapidly while the poor are left
behind.

BOC: Increased competition>All other factors: Increased competition between

countries is more important that talent and widening income gap between the rich
and the poor as increased competition is the root cause of these factors. In a
Do note that Development in Transport and Communications can be presented as one
factor. This section can thus be tested in a two-factor format
globalizing world, countries must take measures to safeguard their economic
interests and these measures include attracting useful and talented people to be part
of their workforce as well as developing rapidly in the most cost-efficient way
possible by sourcing unskilled jobs to developing countries. This is only made
necessary as countries are competing against each other for economic gain.

Increased competition is also more important than improvement in standard of

living based on the number of people affected. Developing countries who supply
unskilled labor are often only able to afford poor living and working conditions and
workers are usually only paid just enough to sustain themselves and their families.
Thus, not everyone enjoys a higher standard of living with globalization. However,
increased competition with other countries is a global phenomenon that affects
everybody as governments impose policies to attract investments that affect all the
inhabitants of the country. The goals and aspirations of every country is thus affected
by the increased competition that globalization has brought, which in turn, affect
everyone who lives in these countries. Thus, increased competition between
countries is the most important economic impact of globalization.

Social impact: The ease of which information is passed to peoples of different

countries as well as the speed at which people are transported all over the world has
influenced the way society thinks and functions. As people have increased exposure
to foreign cultures and influence, they in turn change the way they think and act in
their daily lives. This can lead to advantages like increased knowledge on a foreign
culture but can also be negative due to the loss of local culture and national identity.
An example is the internet’s ability to allow users to find out about the history, culture
and way of life of people around the world. TNC’s like Starbucks and McDonald’s
also promote a homogeneous appearance in all their outlets which contribute to the
loss of local culture.

Sub-points:

Increased awareness of foreign culture: Through globalization, people have

become more aware of different cultures. For example, a person can learn about the
history, culture and way of life of people around the world through surfing the
Internet. This would not be possible without globalization.

Loss of local culture: Globalization can lead to a loss of local culture. Global
brands like Starbucks and McDonald’s dominate the consumer market. These
corporations apply standardized methods of operation and have outlets that appear
identical. These corporations have thus created a largely homogeneous culture
across the world. Many are uncomfortable with the advancement of foreign culture
as it is perceived that these countries are forcing their beliefs and culture upon the
rest of the world.

Environmental Impact: Globalization can be a destructive force to the natural

environment. When TNCs set up factories in different parts of the world, many of
Do note that Development in Transport and Communications can be presented as one
factor. This section can thus be tested in a two-factor format
them use natural resources such as timber and oil. The high demand for these
materials is met by increased deforestation. Deforestation leads to serious
environmental harm like global warming. However, globalization has also increased
awareness of environmental management. An example of this is the efforts made by
countries to research alternative fuels such as geothermal and wind power. This will
help countries sustain their development as well as preserve the environment.

Sub-points:

Environmental degradation(Deforestation & related problems): The demand of

space and timber brought about by TNCs and globalization have resulted in the
deforestation of many rainforests in the world. Some governments allow trees to be
cut down at a rapid rate for economic activities. For example, the total area of forest
lost in the Amazon rose from 41.5 million hectares in 1990 to 58.7 million hectares in
2000. Such deforestation causes soil erosion, extinction of flora and fauna as well as
increase in flooding.

Environmental degradation(Global warming): Globalization has worsened

environmental problems such as global warming. Movement of goods around the
world contributes to global warming as airplanes and ships produce large quantities
of greenhouse gases like carbon dioxide and nitrogen oxides. The presence of such
gases in the atmosphere leads to an increase in the average global temperature
causing climate change such as increased flooding and droughts.

Environmental management: Globalization has brought about an increase in

environmental awareness. Countries are aware that preserving the environment is
crucial in sustaining development. They are thus concerned about preserving the
environment for future generations to use the resources to generate income. An
example of such intention is the research into alternative fuels conducted by many
countries such as geothermal and wind power. These allow countries to generate
power without harming the environment too much.

BOC:

Economic impact>all other impacts: Economic impact is more important than social
and environmental impact based on the number of people affected. The economic
impacts of globalization are world-wide, regardless of positive or negative effect.
Countries are affected economically as globalization opened traditionally regional
markets into more lucrative and conditional global markets. The economic impact on
countries are thus passed down to their inhabitants which influence their daily lives.
This is more important than both social and environmental impact as not everyone is
influenced by global culture and not everyone is averse to such change and not
every international project constructed as a result of globalization results in
environmental destruction. (Environmental sub-point>sub-points of other factors)

Maximizing opportunities and overcoming challenges in a globalizing world

Do note that Development in Transport and Communications can be presented as one
factor. This section can thus be tested in a two-factor format
Macro Format: XY factor is an important factor of overcoming challenges in a
globalizing world. … Thus XY factor is an important factor of overcoming challenges
in a globalizing world.

Diversifying the economy: Singapore seeks to diversify the economy so as to ensure

continued success in the various sectors of the industry. For example, Singapore
seeks to attract TNCs such as Seagate to set up their manufacturing activities in the
country as well as promote tourism with the construction of integrated resorts along
with the Singapore Flyer. With these expansions into various sectors of the
economy, Singapore ensures sustained economic development.

Nurturing growth of Small and Medium Enterprises: SMEs play an important role in
Singapore’s economy as they provide many jobs to the Singaporean workforce.
SMEs also enhance the attractiveness of Singapore to TNCs by providing them with
valuable support. Singapore supports SMEs by providing them with concessions for
them to succeed such as tax exemption for the first $100,000 earned for up to three
years. This allows SMEs sufficient time and funds to grow into important contributors
to the Singaporean economy.

Venturing abroad: Singapore has to look to beyond its borders to ensure sustained
economic development. Investing in nearby countries that have abundant land, lower
labor costs and lucrative new markets help Singapore grow its economy. An
example of this is the Suzhou Industrial Park established in China which houses
many Singaporean firms. Thus, Singapore’s economic growth is maintained even if
the markets and investment opportunities in one particular region are weakened.

Expanding market reach through economic cooperation: Singapore has to export

goods and services overseas as it has a small population which is unable to sustain
economic development. By establishing economic cooperation with other countries,
Singapore is able to benefit from the larger markets that exist abroad. An example of
this are the FTAs signed with there ASEAN countries. This ensures that Singapore
will be able to do business more easily in these countries and the economy will
continue to grow.

Managing resources efficiently: Singapore has limited resources, it is thus crucial to

manage these resources efficiently to ensure that they are maximized and can be
used over a sustained period of time. One of the ways that this is achieved is
through the development of entrepreneurship that helps come up with new
innovative products that are able to compete in the global market. An example of this
is Kenny Yap who was able to establish a successful business selling ornamental
fish. Singapore also manages its limited land effectively. Careful land planning allows
for many amenities and houses to be built in Singapore’s limited space. An example
is the development of Marina Bay through various projects such as The Sail @
Marina Bay as well as the Singapore Flyer.

Do note that Development in Transport and Communications can be presented as one

factor. This section can thus be tested in a two-factor format