Lesson 1: Social Studies Globalisation

Section 1: Causes of Globalisation

o Globalisation is defined as the process by which people, their ideas and their activities in
different parts of the world become interconnected or integrated.

o Key Driving forces of Globalisation are

o
o

o Transport is the means by which people, materials and products are transferred from one
place to another. Improvement in transport technology has shrunk the world by reducing the time taken to
travel from place to place.
o E.g. Commercial Jet aircraft, large vessels and containerization (system of cargo transport
using standard size cargos) has increased/quickened the movement of people/goods from
place to place.
o Efficient transportation infrastructure like airports, seaports, railways and highways has also
helped to facilitate the mobility of people and goods by reducing travelling time.
o Thus by reducing travelling time, people goods can travel to many countries quickly and
easily, allowing countries to trade with each other easily, and thus allowing countries around
the world to become more interconnected with one another.
o Communication systems are the means by which information is transmitted from place to
place in the form of ideas, instructions and images.
o Advancements in technology has made communications among people in different locations
faster and more convenient.
o Invention of such technology like the Internet has enabled consumers to access information/
news around the world easily.
o The Internet has transformed the way one communicates, conduct businesses, obtains info
and purchase goods/services
o Therefore, through the Internet, people are able to communicate easily and quickly and thus
allowed people to become more interconnected to each other.

o Transnational Corporations (TNCs) are large global firms that operate in a number of
countries and have production or service facilities outside their origin country (HQs). E.g. Microsoft
Corporation, Toyota.

Section 2: Impacts of Globalisation

o There are 3 main impacts of globalisation:
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o
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1. Economic Impact: Globalisation has helped improved the living standards of people by increasing their
income levels.

o Improvement in Standard of Living

As countries trade and attract foreign investments, they earn more revenue, which can be
used by the governments to improve the housing, transportation, etc.
 This has allowed people in these countries to experience a better SOL.

o Increased competitions among nations

o Widening Income gap between rich and poor

o Social Impact: Globalisation has changed the way people lived their lives.

o Environmental Impact: TNCs are attracted to LDCs due to their natural resources. In
addition, LDCs are eager to gain the economic benefits and concerned with profits rather
than environmental protection, causing the natural environment to suffer.
 Chapter 2.3: Challenges faced by Singapore in a globalised world (6)<br />

o 6 Challenges faced by Singapore in the 21st century and their effects are:
1. Economic Slowdown in other countries
2. Transnational Terrorism
3. Ageing Population
4. Maturing domestic economy
5. Rise in China and India as competitors
6. Disease outbreak (e.g. SARS, Bird Flu)

o Economic slowdown in other countries: Refers to situations such as fall in investments,

employment opportunities whereby there is a fall in the general purchasing power in other countries.
o Citizens of these countries would travel less which may affect our tourism and service
industry.
o These markets may also not purchase goods exported from Singapore Oversupply in
products.
o This will drive the prices of our goods down and make our country less attractive to foreign
investors due to low profits from our goods.
o In addition, tourists would not come, tourism industry affected, taxis/hotels/restaurants
would also suffer losses, causing many people to be retrenched.
o As Singapore is an open economy, it is highly dependent on tourism, thus any effect on the
tourism industry would have a huge impact on our economy and slow down our economic development.
o Transnational Terrorism: With globalisation, it is easier for terrorists groups like Al Qaeda to
coordinate their terrorists attacks through the Internet.
o This is mainly because people are more likely to travel freely due to improvements in
transportation.
o This can affect Singapore’s tourism as the level of international security has been
compromised.
o For instance, if a terrorist attack happens in Singapore, people feel less secured to travel
than before as they are unsure when terrorists will strike again.
o This can be seen in the 9/11 incident which affected Singapore’s tourism badly as most
tourists from America did not come to Singapore. The government had to increase spending on security.
o Thus terrorism is a challenge to Singapore as it will affect Singapore’s economy and slow
down its economic development.
o Ageing Population
o It is a situation whereby there are more older people than younger people in our country.
o It will affect the productivity of our economy and our ability to attract TNCs, as TNCs would
not want to invest in a country with a ageing workforce with low productivity.
o This is also because old workers are slow and would demand higher salary.
o It would also increase the taxes the young people have to pay as more money is required to
meet the needs of the elderly (the elderly can’t work/ contribute to economy, also use up a lot of resources)
o Maturing Domestic Economy
o This means that an economy is reaching a point where they are generally developed (a.k.a.
saturation point) and there is little room for further improvement.
o When there is a crisis in another country, the country with saturated economy need to
contribute more to help that country.
o There is thus fewer opportunities for Singapore to export goods to these places as they
would have their necessary needs met (these places may not want to buy our goods)
o Hence, it will affect our export market to these places leading to the shrinking of market
opportunities.
o This is thus a challenge to Singapore as Singapore needs to explore potential markets to
sell its goods.
o Rise of new economic competitors
o Emerging economies attract TNCs by providing goods at lower costs, having plenty of
natural resources and a large market.
o These emerging countries would compete on the available pool of investors with Singapore,
and Singapore will tend to lose out as we have no natural resources, small geographical size and low
population (high production costs for investors)
o Thus this is a challenge as it is harder for Singapore to attract other TNCs to invest.
o Disease Outbreak
o Diseases like Bird Flu and SARS were airborne diseases which had a direct impact on
Singapore due to the mobility of people across countries.
o Singapore is very vulnerable to disease outbreaks due to its openness to other countries –
lots of people from other countries come to Singapore every day.
o Singapore thus has to be vigilant to monitor the rise of epidemic in other countries to
prevent it to spread in our country, which will affect our workforce and tourism industry.
o Singapore has to rely on technology at immigration checkpoints to monitor the flow of
tourists’ state of health into our country to ensure they are disease – free.
o Thus disease outbreak is a challenge to Singapore as it can affect the tourist and services
industry, which can hinder our economic development.

Chapter 2.4: Strategies by Singapore to sustain in a globalised world (5)<br />

o There are 5 strategies adopted by Singapore to manage these challenges of Globalisation:

o Diversifying the economy
o Nurturing growth of SMEs
o Venturing Abroad
o Expanding market reach through economic cooperation
o Managing resources efficiently (Developing local talent, attracting foreign talent, managing
the environment)
o Diversifying the Economy: This is basically a strategy which reduces the reliance on a
particular industry.
o Singapore is venturing into areas like Life Sciences and organisations like A*STAR is set up
to build up Singapore’s research and development capability.
o Singapore also tries to be a regional hub for services like education and tourism by
encouraging international universities like Standford University to set up their branches in Singapore. This
will help create a strong university sector that attracts talent.
o Tourism is also another service industry that is promoted. 2 IRs are being built in Marina
Bay and Sentosa as Singapore is facing stiff competition from neighbouring countries as a tourist
destination.
o Thus by diversifying the economy, there will be less reliance on a particular industry which
will help to bolster the effects if that industry falls as the other industries can help to continue generating
revenue for the country.
o Nuturing growth of SMEs (Small/Medium Sized Enterprise)
o SMEs are small companies that provide support for the TNCs as subsidiary branches to
supply resources for a larger manufacturing process.
o However, many SMEs may face many problems running their businesses as they do not
have enough resources, manpower or advanced technology for their operations. They also face a small
market as they do not have capital to venture to overseas markets.
o The Singapore Government has stepped in to help them. For instance, the Association of
Small and Medium Enterprise (ASME) was setup in 1986 to provide assistance to SMEs through training.
New companies are also granted tax exemption by the government on their first $100, 000 for 3 years.
o Therefore, these SMEs are important to Singapore’s economic growth as they provide
employment opportunities for the local workers if jobs for TNCs are not available. Their role will also help to
attract TNCs, helping Singapore to gain more income for development.
o Venturing Abroad
o Singapore faces the challenge of limited land and lack of natural resources to develop our
economy.
o Thus we need to regionalize by investing in nearby countries that have abundant land, lower
labour costs and new markets.
o It is a win-win situation as the Singapore companies provide expertise and capital to
develop industrial parks in those countries, whereas those countries provide land and labour for Singapore
companies.
o Singapore invests in countries where there are low costs of production, abundance
resources (low in price) and big/new markets to sell our products.
o For e.g. SingTel, a Singapore company has expanded into overseas markets with
investments in over 20 companies. These investments will ensure the company’s long term growth.
o Therefore by venturing abroad, this helps to ensure that if our country’s investments do not
work out in 1 region, we have other regions to rely on without affecting our economy.
o However, Singaporeans may also choose to stay on in the host countries for good which
may cause us to lose our talent.
o Expanding market reach through economic population
o As Singapore has a small domestic market and population, it need to establish trade ties
with countries around the world to enable our local companies to sell their goods to a larger market.
o One way to expand market reach is through Free Trade Agreements, where both countries
agree to take away tariffs (taxes imposed on overseas goods) to allow Singapore goods to sell better
overseas it is cheaper.
o Another way is through Special Economic Zone (SEZ) (Indonesia) where Singapore’s
industries are diverted to these zones overseas. This can make Singapore’s industries more competitive as
labour cost is cheap, goods can be sold cheaper and job opportunities can be created.
o Through this, Singapore has more countries to sell our manufactured goods at more
competitive prices. Moreover with simplified immigration procedures due to trade, it will be faster for goods
to be transported to earn profits.
o Managing resources efficiently
o Human Resource
o Local talent
o Foreign talent (sparked unhappiness among the people)
o Environmental / Natural Resources
o Limited Land resources
o Environmental Issues
o Local Talent: Encourage entrepreneurship and technopreneurship.
o Singapore needs more local entrepreneurs who are willing to take risks in their business
ventures and come up with new products to compete with foreign companies.
o One way this can be done is to amend bankruptcy laws to allow entrepreneurs who have
failed to start a business again.
o Another way is to give recognition to outstanding local entrepreneurs who have struggled
and succeeded to inspire more entrepreneurs to achieve better success. (e.g. Kenny Yap, Chairman of
Qian Hu Fish Farm)
o The government is also promoting continuous learning among the workforce. With
Globalisation, the workforce need to continuously upgrade their skills so as to remain employable as jobs
become obsolete very quickly.
o An example is a program offered by WDA which is “Employability Skills Systems” to enable
workers to better adapt to new job demands and changing work environment.
o Therefore by encouraging local talent, it will ensure that Singapore will not be taken over by
foreign talent and that Singaporeans can contribute to the economy as well.
o Foreign Talent: As Singapore is experiencing a declining birth rate and requires new skills in
a knowledge-based economy, there is a need to attract foreign talent to meet its manpower needs.
o It is the fastest way to fill up the workforce and is an important source of contact overseas
for new business opportunities.
o Therefore, by attracting foreign talent, it will allow new skills to be brought in and increase
the standards of our workforce, which will be more attractive to foreign investments and promote economic
growth.
o Managing Limited Land Resources: Singapore has a small geographical land size that are
highly demanded for different uses.
o Singapore government needs proper planning for the overall development and growth (else
it will lead to haphazard growth causing land space to be wasted)
o Singapore also makes use of innovative technology to save space such as landfills in Palau
Sermakau after incinerationand Incineration plants for waste disposal at Ulu Pandan, Tuas and Senoko
(high chimneys to prevent air to be polluted at ground level).
o With careful land use planning, high standard facilities for housing, transportation, defence,
etc can be built. These facilities will enable Singaporeans to enjoy a good QOL and ensure that Singapore
can sustain growth in a globalizing world.
o Managing the environment
o Cooperation with regional and international organisations: Singapore works with ASEAN to
solve the haze problem from Indonesia.
o Detect forest fires and haze using satellites.
o Hosted the ASEAN Ministerial Meeting on Haze to discuss measures to combat the
problem.
o Therefore, this allows Singapore and other countries to share knowledge and expertise so
that it would be beneficial to both parties.
o Singapore has also played a part at the international level by signing the Kyoto Protocol to
phase cut CFCs progressively from 1 January 1996.
o Public Education of Locals
o Singaporeans should be instilled with a sense of responsibility and personal interest to keep
their surroundings clean.
o People are encourage to practice the 3Rs’. For e.g. Bring Your Own Bag day programme is
on every Wednesday where Singaporeans are encouraged to bring their own bags to the supermarkets.
o The Clean and Green Week is an annual campaign that tried to educate people on
environmental issues through exhibitions, seminars, workshops, beach cleaning, etc.
o This will prevent the government from spending large amounts of money to clean the
environment and divert more money for use in other areas.