Social Studies Chapter 2: Chapter 2.

2: Impacts of Globalisation (7)

Globalisation
Chapter 2.1: Causes of Globalisation (3) 6. There are 3 main impacts of globalisation:
a. Economic Impact: Improvement in SOL, Increased
1. Globalisation is defined as the process by which people, competitions among nations, widening income gap
their ideas and their activities in different parts of the between rich and poor.
world become interconnected or integrated. b. Social Impact: Increased awareness of foreign
culture, loss of local culture.
2. Key Driving forces of Globalisation are c. Environmental Impact: Deforestation/Related
a. Improvements in Transport and Communications Problems, Environmental Management
technology and
b. Transnational Corporations. 7. Economic Impact: Globalisation has helped improved the
living standards of people by increasing their income
3. Transport is the means by which people, materials and levels.
products are transferred from one place to another. a. Improvement in Standard of Living
a. Improvement in transport technology has shrunk i. As countries trade and attract foreign
the world by reducing the time taken to travel from investments, they earn more revenue, which can
place to place. be used by the governments to improve the
b. E.g. Commercial Jet aircraft, large vessels and housing, transportation, etc.
containerization (system of cargo transport using ii. This has allowed people in these countries to
standard size cargos) has increased/quickened the experience a better SOL.
movement of people/goods from place to place. b. Increased competitions among nations
c. Efficient transportation infrastructure like airports, i. Investment and Market: As TNCs source for
seaports, railways and highways has also helped to locations to locate their factories, governments
facilitate the mobility of people and goods by compete with one another to attract these
reducing travelling time. corporations to invest in their countries. They
d. Thus by reducing travelling time, people goods can may offer incentives to foreign investors as
travel to many countries quickly and easily, well.
allowing countries to trade with each other easily, ii. For e.g. China. When it first allowed foreign
and thus allowing countries around the world to investors to come in 1970s, these companies set
become more interconnected with one another. up their production facilities in cities like
Suzhou, Wuxi and Dalian, causing them to have
well – developed industrial infrastructure.
4. Communication systems are the means by which
iii. This has also allowed China to become an
information is transmitted from place to place in the
attractive country for foreign investors and pose
form of ideas, instructions and images.
a strong challenge to other countries in the
a. Advancements in technology has made
region.
communications among people in different
iv. However, many LDCs find it difficult to attract
locations faster and more convenient.
foreign investments due to reasons like poor
b. Invention of such technology like the Internet has
infrastructure and political instability, trapping
enabled consumers to access information/ news
them in the poverty cycle.
around the world easily.
v. Talent: Highly – talented people are in demand
c. The Internet has transformed the way one
around the globe. With Globalisation, these
communicates, conduct businesses, obtains info
people can move to different countries to search
and purchase goods/services
for better employment opportunities.
d. Therefore, through the Internet, people are able to
vi. An increase in workers’ mobility may lead to
communicate easily and quickly and thus allowed
brain drain. Without talented people in the
people to become more interconnected to each
country, its economy may suffer in decline
other.
compared to other countries.
c. Widening Income gap between rich and poor
5. Transnational Corporations (TNCs) are large global i. DCs are experiencing rapid income growth as
firms that operate in a number of countries and have they own most of the manufacturing activities
production or service facilities outside their origin (TNCs from there can draw investments, skilled
country (HQs). E.g. Microsoft Corporation, Toyota. people and resources from poor areas and
a. They setup their operations in different locations relocate them)
for souring for new markets and lowering costs of ii. LDCs face trade restrictions by DCs as they are
production (Link: Geog Chp 2 Industrial World) not capable of producing better quality goods
b. TNCs also source for components around the world that fetch higher prices that the DCs can due to
before assembling the final product. lowly – skilled workers.
c. Therefore, this has allowed economics around the iii. Therefore, the rich in the DCs continue to
world to become more integrated as these prosper due to better opportunities, whereas the
companies trade with various countries around the poor face economic uncertainties such as
world, making them more connected. retrenchment  Social problems/increasing
3 Causes of Globalisation | 7 Impacts of Globalisation | 6 Challenges faced by Singapore | 5 Strategies by Singapore to sustain in a Globalising World
Copyright © 2010. All Rights Reserved. No part of this publication may be reproduced without permission from the author. 1
 tension between the rich/poor. iii. Therefore, this had helped to encourage
governments to preserve the environment for
8. Social Impact: Globalisation has changed the way people our future generations and thus help manage the
lived their lives. environment.
a. Increased awareness of foreign culture
i. Through globalisation, one can become more Chapter 2.3: Challenges faced by Singapore in a
aware of different cultures by travelling or globalised world (6)
surfing the Internet.
ii. This will allow people to become more
understanding and tolerant to other countries, 10. 6 Challenges faced by Singapore in the 21st century and
and also help to reduce misunderstanding their effects are:
among countries. a. Economic Slowdown in other countries
b. Loss of local culture b. Transnational Terrorism
i. Global brands like McDonalds dominate the c. Ageing Population
consumer market in LDCs. With their d. Maturing domestic economy
standardized methods of operation and e. Rise in China and India as competitors
appearance, it has created a homogenous culture f. Disease outbreak (e.g. SARS, Bird Flu)
in the country.
ii. Globalisation has also led to the spread of pop 11. Economic slowdown in other countries: Refers to situations
culture across the globe such as rap music, such as fall in investments, employment opportunities
MTV and Hollywood Movies. This may cause whereby there is a fall in the general purchasing power
the youths to lose interests in local culture. It in other countries.
may also cause people to think that other a. Citizens of these countries would travel less which
countries are forcing their beliefs, cultures and may affect our tourism and service industry.
languages to the rest of the world. b. These markets may also not purchase goods
9. Environmental Impact: TNCs are attracted to LDCs due to exported from Singapore  Oversupply in
their natural resources. In addition, LDCs are eager to products.
gain the economic benefits and concerned with profits c. This will drive the prices of our goods down and
rather than environmental protection, causing the make our country less attractive to foreign
natural environment to suffer. investors due to low profits from our goods.
a. Environment degradation d. In addition, tourists would not come, tourism
i. Deforestation/related problems: Rainforests in industry affected, taxis/hotels/restaurants would
many countries have been cut down to make also suffer losses, causing many people to be
way for development of infrastructure and retrenched.
agriculture. Governments have also allowed e. As Singapore is an open economy, it is highly
trees to be cut down as economic activities like dependent on tourism, thus any effect on the
cattle ranching can generate revenue for the tourism industry would have a huge impact on our
country. economy and slow down our economic
ii. Resulted in many environmental problems like development.
soil erosion, extinction of flora and fauna,
increase in flooding and haze. 12. Transnational Terrorism: With globalisation, it is easier
iii. Therefore environmental degradation will cause for terrorists groups like Al Qaeda to coordinate their
severe economic effects as tourism industry terrorists attacks through the Internet.
may be affected due to haze and money needed a. This is mainly because people are more likely to
to be spent to clean the environment caused by travel freely due to improvements in transportation.
natural disasters. b. This can affect Singapore’s tourism as the level of
iv. Global Warming: Advances in transport international security has been compromised.
technology like aeroplanes and ships has c. For instance, if a terrorist attack happens in
worsened global warming as they emit Singapore, people feel less secured to travel than
greenhouse gases. before as they are unsure when terrorists will strike
v. This will cause the global average temperature again.
to rise and may lead to natural disasters like d. This can be seen in the 9/11 incident which
flooding of lowland countries due to melting of affected Singapore’s tourism badly as most tourists
ice caps. from America did not come to Singapore. The
b. Environmental management government had to increase spending on security.
i. Countries have become more aware that e. Thus terrorism is a challenge to Singapore as it will
sustainable development is the key to further affect Singapore’s economy and slow down its
growth, as when the environment is well economic development.
preserved, future generations can use the
resources to generate income and enjoy a good 13. Ageing Population
standard of living. a. It is a situation whereby there are more older
ii. Alternative energy sources like wind, solar and people than younger people in our country.
geothermal power can provide some energy i. It will affect the productivity of our economy
required by factories. and our ability to attract TNCs, as TNCs would

3 Causes of Globalisation | 7 Impacts of Globalisation | 6 Challenges faced by Singapore | 5 Strategies by Singapore to sustain in a Globalising World
Copyright © 2010. All Rights Reserved. No part of this publication may be reproduced without permission from the author. 1
 not want to invest in a country with a ageing a. Diversifying the economy
workforce with low productivity. b. Nurturing growth of SMEs
ii. This is also because old workers are slow and c. Venturing Abroad
would demand higher salary. d. Expanding market reach through economic
b. It would also increase the taxes the young people cooperation
have to pay as more money is required to meet the e. Managing resources efficiently (Developing local
needs of the elderly (the elderly can’t work/ talent, attracting foreign talent, managing the
contribute to economy, also use up a lot of environment)
resources)
18. Diversifying the Economy: This is basically a strategy
14. Maturing Domestic Economy which reduces the reliance on a particular industry.
a. This means that an economy is reaching a point a. Singapore is venturing into areas like Life Sciences
where they are generally developed (a.k.a. and organisations like A*STAR is set up to build
saturation point) and there is little room for further up Singapore’s research and development
improvement. capability.
b. When there is a crisis in another country, the b. Singapore also tries to be a regional hub for
country with saturated economy need to contribute services like education and tourism by encouraging
more to help that country. international universities like Standford University
c. There is thus fewer opportunities for Singapore to to set up their branches in Singapore. This will help
export goods to these places as they would have create a strong university sector that attracts talent.
their necessary needs met (these places may not c. Tourism is also another service industry that is
want to buy our goods) promoted. 2 IRs are being built in Marina Bay and
d. Hence, it will affect our export market to these Sentosa as Singapore is facing stiff competition
places leading to the shrinking of market from neighbouring countries as a tourist
opportunities. destination.
e. This is thus a challenge to Singapore as Singapore d. Thus by diversifying the economy, there will be
needs to explore potential markets to sell its goods. less reliance on a particular industry which will
help to bolster the effects if that industry falls as
15. Rise of new economic competitors the other industries can help to continue generating
a. Emerging economies attract TNCs by providing revenue for the country.
goods at lower costs, having plenty of natural
resources and a large market. 19. Nuturing growth of SMEs (Small/Medium Sized Enterprise)
b. These emerging countries would compete on the a. SMEs are small companies that provide support for
available pool of investors with Singapore, and the TNCs as subsidiary branches to supply
Singapore will tend to lose out as we have no resources for a larger manufacturing process.
natural resources, small geographical size and low b. However, many SMEs may face many problems
population (high production costs for investors) running their businesses as they do not have
c. Thus this is a challenge as it is harder for Singapore enough resources, manpower or advanced
to attract other TNCs to invest. technology for their operations. They also face a
16. Disease Outbreak small market as they do not have capital to venture
a. Diseases like Bird Flu and SARS were airborne to overseas markets.
diseases which had a direct impact on Singapore c. The Singapore Government has stepped in to help
due to the mobility of people across countries. them. For instance, the Association of Small and
b. Singapore is very vulnerable to disease outbreaks Medium Enterprise (ASME) was setup in 1986 to
due to its openness to other countries – lots of provide assistance to SMEs through training. New
people from other countries come to Singapore companies are also granted tax exemption by the
every day. government on their first $100, 000 for 3 years.
c. Singapore thus has to be vigilant to monitor the rise d. Therefore, these SMEs are important to
of epidemic in other countries to prevent it to Singapore’s economic growth as they provide
spread in our country, which will affect our employment opportunities for the local workers if
workforce and tourism industry. jobs for TNCs are not available. Their role will also
d. Singapore has to rely on technology at immigration help to attract TNCs, helping Singapore to gain
checkpoints to monitor the flow of tourists’ state of more income for development.
health into our country to ensure they are disease –
free. 20. Venturing Abroad
e. Thus disease outbreak is a challenge to Singapore a. Singapore faces the challenge of limited land and
as it can affect the tourist and services industry, lack of natural resources to develop our economy.
which can hinder our economic development. b. Thus we need to regionalize by investing in nearby
countries that have abundant land, lower labour
Chapter 2.4: Strategies by Singapore to sustain in costs and new markets.
a globalised world (5) c. It is a win-win situation as the Singapore
companies provide expertise and capital to develop
17. There are 5 strategies adopted by Singapore to manage industrial parks in those countries, whereas those
these challenges of Globalisation:
3 Causes of Globalisation | 7 Impacts of Globalisation | 6 Challenges faced by Singapore | 5 Strategies by Singapore to sustain in a Globalising World
Copyright © 2010. All Rights Reserved. No part of this publication may be reproduced without permission from the author. 1
 countries provide land and labour for Singapore the workforce need to continuously upgrade their
companies. skills so as to remain employable as jobs become
d. Singapore invests in countries where there are low obsolete very quickly.
costs of production, abundance resources (low in e. An example is a program offered by WDA which is
price) and big/new markets to sell our products. “Employability Skills Systems” to enable workers
e. For e.g. SingTel, a Singapore company has to better adapt to new job demands and changing
expanded into overseas markets with investments work environment.
in over 20 companies. These investments will f. Therefore by encouraging local talent, it will
ensure the company’s long term growth. ensure that Singapore will not be taken over by
f. Therefore by venturing abroad, this helps to ensure foreign talent and that Singaporeans can contribute
that if our country’s investments do not work out in to the economy as well.
1 region, we have other regions to rely on without
affecting our economy. 24. Foreign Talent: As Singapore is experiencing a declining
g. However, Singaporeans may also choose to stay on birth rate and requires new skills in a knowledge-based
in the host countries for good which may cause us economy, there is a need to attract foreign talent to meet
to lose our talent. its manpower needs.
a. It is the fastest way to fill up the workforce and is
21. Expanding market reach through economic population an important source of contact overseas for new
a. As Singapore has a small domestic market and business opportunities.
population, it need to establish trade ties with b. Therefore, by attracting foreign talent, it will allow
countries around the world to enable our local new skills to be brought in and increase the
companies to sell their goods to a larger market. standards of our workforce, which will be more
b. One way to expand market reach is through Free attractive to foreign investments and promote
Trade Agreements, where both countries agree to economic growth.
take away tariffs (taxes imposed on overseas
goods) to allow Singapore goods to sell better
overseas it is cheaper. 25. Managing Limited Land Resources: Singapore has a small
c. Another way is through Special Economic Zone geographical land size that are highly demanded for
(SEZ) (Indonesia) where Singapore’s industries are different uses.
diverted to these zones overseas. This can make a. Singapore government needs proper planning for
Singapore’s industries more competitive as labour the overall development and growth (else it will
cost is cheap, goods can be sold cheaper and job lead to haphazard growth causing land space to be
opportunities can be created. wasted)
d. Through this, Singapore has more countries to sell b. Singapore also makes use of innovative technology
our manufactured goods at more competitive to save space such as landfills in Palau Sermakau
prices. Moreover with simplified immigration after incinerationand Incineration plants for waste
procedures due to trade, it will be faster for goods disposal at Ulu Pandan, Tuas and Senoko (high
to be transported to earn profits. chimneys to prevent air to be polluted at ground
level).
22. Managing resources efficiently c. With careful land use planning, high standard
a. Human Resource facilities for housing, transportation, defence, etc
i. Local talent can be built. These facilities will enable
ii. Foreign talent (sparked unhappiness among the Singaporeans to enjoy a good QOL and ensure that
people) Singapore can sustain growth in a globalizing
b. Environmental / Natural Resources world.
i. Limited Land resources
ii. Environmental Issues 26. Managing the environment
a. Cooperation with regional and international
23. Local Talent: Encourage entrepreneurship and organisations: Singapore works with ASEAN to
technopreneurship. solve the haze problem from Indonesia.
a. Singapore needs more local entrepreneurs who are i. Detect forest fires and haze using satellites.
willing to take risks in their business ventures and ii. Hosted the ASEAN Ministerial Meeting on
come up with new products to compete with Haze to discuss measures to combat the
foreign companies. problem.
b. One way this can be done is to amend bankruptcy iii. Therefore, this allows Singapore and other
laws to allow entrepreneurs who have failed to start countries to share knowledge and expertise so
a business again. that it would be beneficial to both parties.
c. Another way is to give recognition to outstanding iv. Singapore has also played a part at the
local entrepreneurs who have struggled and international level by signing the Kyoto
succeeded to inspire more entrepreneurs to achieve Protocol to phase cut CFCs progressively from
better success. (e.g. Kenny Yap, Chairman of Qian 1 January 1996.
Hu Fish Farm) b. Public Education of Locals
d. The government is also promoting continuous
learning among the workforce. With Globalisation,
3 Causes of Globalisation | 7 Impacts of Globalisation | 6 Challenges faced by Singapore | 5 Strategies by Singapore to sustain in a Globalising World
Copyright © 2010. All Rights Reserved. No part of this publication may be reproduced without permission from the author. 1
 i. Singaporeans should be instilled with a sense of
responsibility and personal interest to keep their
surroundings clean.
ii. 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.
iii. The Clean and Green Week is an annual
campaign that tried to educate people on
environmental issues through exhibitions,
seminars, workshops, beach cleaning, etc.
iv. This will prevent the government from spending
large amounts of money to clean the
environment and divert more money for use in
other areas.

Exercise: Sample SEQ Question

1. Globalisation poses a challenge to Singapore. Do you
agree? Explain your answer. (13m)

Guideline
Paragraph 1: Challenges (e.g. Terrorism, spread of diseases)
Paragraph 2: Opportunities (e.g. Foreign Talent)
Paragraph 3: Conclusion
Remember to state examples!

3 Causes of Globalisation | 7 Impacts of Globalisation | 6 Challenges faced by Singapore | 5 Strategies by Singapore to sustain in a Globalising World
Copyright © 2010. All Rights Reserved. No part of this publication may be reproduced without permission from the author. 1