KEY DRIVING FORCES OF GLOBALIZATION

Developments in Transportation
Transportations are the means by which people, materials and products
are transferred from one place to another. Inventions such as airplanes and
vessels, together with containerization have greatly increased the
movements of goods and people from one place to another. Many
countries have also built efficient and integrated transportation
infrastructure such as airports and seaports to cope with the increasing
mobility of goods and people. As a result, the improvements in
transportation technology have shrunk the world considerably in terms of
time taken to get from one place to another. The efficient transportation
network worldwide has made it possible for goods to be moved around and
people to travel easily. This has greatly enhanced the process by which
people, their ideas and their activities in different parts of the world become
integrated.

Developments in communications
Communication systems are the means by which information is transmitted
from place to place in the form of ideas and images. The invention of
advanced communication technology such as the Internet and telephones
has enabled messages to be transmitted from one location and received in
another part of the world almost simultaneously. As a result, the
improvements in technology have made communications among people in
different locations faster and more convenient, allowing people, their ideas
and activities in different parts of the world to become integrated.
Furthermore, developments in communications allow transnational
corporations (TNC), another key driver of globalization, to coordinate and
control their worldwide activities easily, encouraging more TNC to be set up.

Transnational Corporations (TNC)

TNCs such as Microsoft are large global firms that operate in a number of
countries and have production or service facilities outside the country of
their origin. TNCs set up their operations in different locations around the

world for reasons such as sourcing for new markets and lowering the cost
of productions. These worldwide operations are controlled by their
headquarters in the country of their origin. As a result, economies around
the world have become more integrated. This has enhanced the process by
which people, their ideas and their activities in different parts of the world
become integrated.

Analysis of the Driving Forces of Globalisation

Developments in
Transport
It is important in
integrating people,
materials and
products from one
place to another.
However,
transportation is a
much slower way
than communication
for globalization to
take place.

Developments in
Communication

Transnational
Corporations

It is the most
effective driving force
of globalization
because
developments in
communication have
enabled information
which is necessary
for people, their ideas
and their activities to
become integrated to
be transmitted almost
simultaneously,
allowing for
globalization to take
place quickly and
effectively.

It is Important in
integrating people,
their ideas and their
activities globally but
it requires
developments in
transport and
communications to
be successfully
carried out.

IMPACT OF GLOBALIZATION
Economic Impact
Positive:
Improvements in standard of living
Globalizing countries such as China have enjoyed an increase in income
levels. As they trade and open their doors to foreign investment, they earn
more revenue. With more revenues, the government can improve their
education, health, housing, etc. As a result, people living in these countries
benefit from these improvements and enjoy a higher standard of living.
Free trade has also provided many lifestyle choices for people to choose
from. This increase in lifestyle choices leads to a better quality of life.

Negative:
Increased competition among nations
(Investments and markets)
Globalization leads to countries facing more intense competition. In order to
lower their costs of production, TNCs seek out the cheapest locations.
Governments in turn compete with one another to attract these
corporations to invest in their countries. As a result, rich countries which
could offer incentives to attract foreign investors will gain rapid economic
growth. On the other hand, the poor countries which do not have developed
infrastructure and political stability are unable to attract investors. They will
remain trapped in the poverty cycle.

(Talent)

With globalization, people are able to move from country to country in

search of leisure activities and employment. People who are highly skilled

are in high demand. Globalization has presented people with talent with the
opportunity to find employment in another country. As a result, this increase
in workers mobility has led to a situation of brain drain in a country. This
would in turn restrict the economic growth and development of the country.

Widening income gap between the rich and poor

Globalization has rapidly increased the income gap between the rich and
the poor countries. Economically more developed countries are
experiencing rapid income growth as they are responsible for most of the
manufacturing activities. On the contrary, developing countries often face
trade restrictions put up by developed countries. They are not capable of
producing better quality goods that fetch higher prices that the developed
countries do. As a result, it has led to rapid development in many rich
countries but it has also contributed to the spread of poverty in many poor
countries. Furthermore, there is a widening income gap in the developed
countries. The rich get richer because of better opportunities while the poor
get poorer as they face economic uncertainties such as retrenchment. This
widening income gap may also lead to social problems such as increasing
tension between the rich and poor.

Social Impact
Positive:

Increased awareness of foreign cultures

Due to globalization, people have become more aware of different cultures.
They can learn more about the history, culture and way of life of people
around the world through traveling, for example. As a result, people gain a
better understanding of the different cultures in the world. They begin to
appreciate and respect the cultural differences. With more understanding
and respect, conflicts are less likely to occur and there will be long lasting
peace in the world.

Negative:
Loss of local culture ?
Globalization leads to a loss of local culture. When global brands such as
McDonalds whose outlets are identical in appearance dominate the
consumer market in developing countries, they have created a largely
homogenous culture across the world. Korean pop music, for example, is
also spread across the world through globalization. This has influenced the
youth negatively as they lose their interest in local cultures. As a result,
with a loss of local culture, a sense of belonging and identity is not instilled
among the people in a country. When people do not have that, the country
may lose talents and suffer from brain drain, which slows down its
economic development.

Environmental Impact
Negative:
Environmental Degradation
(Deforestation and related problems)?
One practice that results in environmental degradation is deforestation.
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 more profitable to use the
forested land for other purposes. As a result, the loss of forests has
resulted in many environmental problems such as soil erosion, extinction of
flora and fauna, increase in flooding and haze. These problems can cause
a loss of life, economic losses such as a decrease in revenue from tourism.

(Global warming)
Rapid globalization has produced large amounts of greenhouse gases such
as carbon dioxide through the burning of fossil fuels to provide energy my
transport, manufacturing, etc. This leads to the enhanced greenhouse
effect which in turn causes an increase in the average global temperature.
As a result, this increase in the global temperature has devastating impact
on the Earth. There will be a sea level rise which can submerge coastal
countries. There will be more frequent extreme weather events such as
hurricanes which can kill many people. There will be also spread of tropical
diseases such as dengue to temperate regions, which can kill many people.

Positive:
Environmental management ?
Despite the negative environmental impact, there is an increase in
awareness of environmental management as countries are aware that
sustainable development is a key to further growth. This has led to

research on alternative energy sources such as wind, solar and geothermal

power which hopefully can provide all the energy required in the future. As
a result, the future generations can continue to use the resources to
generate income and enjoy a high standard of living.

Singapores strategies to maximize opportunities and

overcome challenges in a globalizing world
Diversifying the economy
Singapore aims to be a center for technology-intensive, high value-added
manufacturing activities such as chemical engineering and pharmaceuticals.
It has built up its research and development capabilities by setting up
organizations such as Agency for Science, Technology and Research.
Singapore also aims to be the regional hub for education and tourism.
Complementing the local universities, leading international universities
have set up branches in Singapore to attract more talents. Two integrated
resorts have been built in Marina Bay and Sentosa to attract more tourists.
As a result, Singapore attracts TNCs to set up their high value-added
manufacturing activities here. This not only generates jobs for
Singaporeans but also affirms Singapores position as a manufacturing hub.
With more tourists visiting Singapore, it strengthens Singapores position as
a choice tourist destination in Southeast Asia and generates economic
benefits. These various sectors of the economy help reduce Singapores
reliance on a single industry or market. Should any sector of the economy
slow down, the other sectors can continue to generate revenue.
Nuturing the growth of small and medium enterprises(SME)
SMEs are sometimes unsuccessful as they face problems such as being
unable to compete with big corporations which have more resources. They
also lack expertise in using advanced technology to bring their operations
up-to-date. However, there are many schemes in place to assist them. For
example, the Association of Small and Medium Enterprises (ASME) was
set up to provide assistance to SMEs. One such assistance is in the area of
training where regular seminars are organized for members to enhance
their capacity. As a result, SMEs can survive and become 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. In this way,

they enhance the attractiveness of Singapore as a regional manufacturing

and services hub.

Venturing Aboard ?
With limited land and labor 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 labor costs and new
markets. Singapore provides the expertise and capital to develop projects
like industrial parks in host countries while the host countries provide land
and labor. As a result, the spread of investment across the world ensures
that Singapores economic growth is maintained even if the markets and
investment opportunities in one particular region or country are weakened.

Expanding market reach through economic cooperation ?

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
through signing of Free Trade Agreements (FTAs). Singapore also
cooperates with other countries by setting up Special Economic Zones
(SEZs) where there are less strict economic laws. As a result, these 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.

Managing resources efficiently

(Developing people)
One way to develop people is to promote local entrepreneurship and
technopreneurship. One of the ways Singapore promotes entrepreneurship
is by amending bankruptcy laws to allow entrepreneurs who have failed to
start a business again. As a result, with more local entrepreneurs who are
willing to take risks and develop new products, they will be able to compete
with foreign companies and generate economic growth.

Singapore also develops their people by promoting continuous learning

among the workforce. As Singapore becomes more globalized, some jobs
will become obsolete and be replaced by new jobs. The 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. As a result, this
ensures that Singapores 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 manpower)

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
Singapores manpower needs. As a result, the foreign power supports the
social and development needs of the country, such as in construction and
social services. They also take up lower-skilled jobs as more Singaporeans
upgrade to higher-skilled jobs.

(Managing the environment) ?

As land is scarce in Singapore, the management of limited land resources
is necessary so that high standards facilities for housing, transportation,
recreation, commerce, defense and education can be built. It is 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. Land is also allocated for waste
disposal. As a result, these measures enable Singaporeans to enjoy a
good quality of life and ensure that Singapore can sustain growth in a
globalizing world.
Singapore takes an active interest in helping to solve regional and
international environmental problems. For example, Singapore has
cooperated with ASEAN on environmental matters such as the Indonesian
haze. Singapore also worked with other countries at the international level.
Singapore renewed their Kyoto Protocol to reduce greenhouse gas
emissions in September 2014.As a result, by co-operating with these

organizations to solve problems, economic growth will not be halted as

economic activities will continue.

In order to ensure that Singapores 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. This is achieved by public education that is not only in
schools but also among the general public. For example, students are
encouraged to take part in recycling and waste minimization programs. The
general public is encouraged to reduce their usage of plastic bag. They will
get a discount of ten cents when they do not use any plastic bags at
Fairprice. As a result, by providing public education, Singapore will be able
to sustain its environment and preserve it for future generations who can
continue to enjoy a high standard of living.