Sustaining Economic Development in a Globalizing World Drivers of globalization

Drivers of Globalisation Developments in transportation and communications Transporting products, people, materials and information from one place to another

Developments in transportation and communications

Transporting products, people, materials and information from one place to another

Drivers of Globalisation Transportation Made the world smaller Use of steam engines, jet aircraft, vessels, containerisation Airports, seaports, railways and highways Efficient network and movement

Transportation

Made the world smaller

Use of steam engines, jet aircraft, vessels, containerisation

Airports, seaports, railways and highways

Efficient network and movement

Drivers of Globalisation Communications Use of telephone, emails, fax, video conferencing, satelite technology, optical fibre, internet Fast transfer of information Quick access to information about new products and places Better coordination and control to worldwide activities

Communications

Use of telephone, emails, fax, video conferencing, satelite technology, optical fibre, internet

Fast transfer of information

Quick access to information about new products and places

Better coordination and control to worldwide activities

Drivers of Globalisation Transnational Corporations (TNCs) Microsoft Corporation, Toyota Motor Source for bigger market, lower costs Source for components around the world

Transnational Corporations (TNCs)

Microsoft Corporation, Toyota Motor

Source for bigger market, lower costs

Source for components around the world

Sustaining Economic Development in a Globalizing World Impact of Globalisation

Impacts of Globalisation Economic Impact Improve standard of living Increased competition among nations

Economic Impact

Improve standard of living

Increased competition among nations

Impacts of Globalisation Social Impact Increased awareness of foreign culture Loss of local culture

Social Impact

Increased awareness of foreign culture

Loss of local culture

Impacts of Globalisation Environmental Impact Environmental degradation Deforestation Global warming

Environmental Impact

Environmental degradation

Deforestation

Global warming

Impacts of Globalisation Economic Impact Improve standard of living Increased income levels Yr 2000, $4940 Yr 2004, $5170 Yr 2005, $5400 Increased revenue from foreign investment = improved education, health, defense, housing and transportation Varieties of foreign goods = quality life

Economic Impact

Improve standard of living

Increased income levels

Yr 2000, $4940

Yr 2004, $5170

Yr 2005, $5400

Increased revenue from foreign investment = improved education, health, defense, housing and transportation

Varieties of foreign goods = quality life

Impacts of Globalisation Economic Impact Increased competition among nations TNCs looking for more attractive* c’tries for investment

Economic Impact

Increased competition among nations

TNCs looking for more attractive* c’tries for investment

Impacts of Globalisation Economic Impact Increased competition among nations TNCs looking for more attractive* c’tries for investment Eg. Dalian, in China (see pg 52) Eg. Danish Maersk Sealand shifting transhipment hub from Singapore to Malaysia’s Tanjung Pelepas, Johor Eg. Bangkok’s airport beating HK and Spore *attractive = well developed infrastructure, sound financial institutions, political stability, accessible transportation routes, low tax rate, encourages R&D, support use of IT and high tech industries

Economic Impact

Increased competition among nations

TNCs looking for more attractive* c’tries for investment

Eg. Dalian, in China (see pg 52)

Eg. Danish Maersk Sealand shifting transhipment hub from Singapore to Malaysia’s Tanjung Pelepas, Johor

Eg. Bangkok’s airport beating HK and Spore

*attractive = well developed infrastructure, sound financial institutions, political stability, accessible transportation routes, low tax rate, encourages R&D, support use of IT and high tech industries

Impacts of Globalisation Economic Impact Talent Find employment in other c’tries 2.5% of world’s population live outside their birth c’try Brain drain problem

Economic Impact

Talent

Find employment in other c’tries

2.5% of world’s population live outside their birth c’try

Brain drain problem

Impacts of Globalisation Economic Impact Widening income gap btw rich and poor Developed c’tries experience rapid growth by drawing TNCs and talents from poor areas Developing c’tries faced trade restrictions, have lowly skilled workers, labour intensive industries, poorly paid by TNCs

Economic Impact

Widening income gap btw rich and poor

Developed c’tries experience rapid growth by drawing TNCs and talents from poor areas

Developing c’tries faced trade restrictions, have lowly skilled workers, labour intensive industries, poorly paid by TNCs

Impacts of Globalisation Social Impact Increased awareness of foreign culture through travelling, surfing the internet, watching foreign films

Social Impact

Increased awareness of foreign culture

through travelling, surfing the internet, watching foreign films

Impacts of Globalisation Social Impact Loss of local culture Global brands create homogeneous culture Pop culture penetrates to many people

Social Impact

Loss of local culture

Global brands create homogeneous culture

Pop culture penetrates to many people

Impacts of Globalisation Environmental Impact TNCs set up factories, pollute the air, caused environmental degradation

Environmental Impact

TNCs set up factories, pollute the air, caused environmental degradation

Impacts of Globalisation Environmental Impact Environmental degradation Deforestation Forest cut down to make way for development Eg. Brazil’s success as a beef exporter Eg. Indonesia’s forests cleared for cash crops and development projects Eg. China’s Three gorges project Soil erosion, extinction of flora and fauna, flooding, water pollution, haze

Environmental Impact

Environmental degradation

Deforestation

Forest cut down to make way for development

Eg. Brazil’s success as a beef exporter

Eg. Indonesia’s forests cleared for cash crops and development projects

Eg. China’s Three gorges project

Soil erosion, extinction of flora and fauna, flooding, water pollution, haze

Impacts of Globalisation Environmental Impact Environmental degradation Global warming Production of greenhouse gases into the atmosphere Increased global temperature

Environmental Impact

Environmental degradation

Global warming

Production of greenhouse gases into the atmosphere

Increased global temperature

Impacts of Globalisation Environmental Impact Increase in an awareness of Environmental management Want to ensure sustainable development through the preservation of resources Eg. Conserving energy, use of alternative energy sources (wind, solar and geothermal power) Three Gorges Project – building a dam to generate power for industrialisation

Environmental Impact

Increase in an awareness of Environmental management

Want to ensure sustainable development through the preservation of resources

Eg. Conserving energy, use of alternative energy sources (wind, solar and geothermal power)

Three Gorges Project – building a dam to generate power for industrialisation

Impacts of Globalisation Environmental Impact Increase in an awareness of Environmental management Want to ensure sustainable development through the preservation of resources Eg. Conserving energy, use of alternative energy sources (wind, solar and geothermal power) Three Gorges Project – building a dam to generate power for industrialization

Environmental Impact

Increase in an awareness of Environmental management

Want to ensure sustainable development through the preservation of resources

Eg. Conserving energy, use of alternative energy sources (wind, solar and geothermal power)

Three Gorges Project – building a dam to generate power for industrialization

Sustaining Economic Development in a Globalizing World Case Study: Singapore

Case Study: Singapore Challenges in Singapore Transnational terrorism Ageing population Rise of China and India as competitors Outbreak of diseases Economic slowdown in other countries Maturing domestic economy

Challenges in Singapore

Transnational terrorism

Ageing population

Rise of China and India as competitors

Outbreak of diseases

Economic slowdown in other countries

Maturing domestic economy

Case Study: Singapore Strategies to overcome challenges Diversifying the Economy to reduce dependency on a single industry/ market Nurturing growth of SMEs to provide jobs and support operations of TNCs

Strategies to overcome challenges

Diversifying the Economy to reduce dependency on a single industry/ market

Nurturing growth of SMEs to provide jobs and support operations of TNCs

Case Study: Singapore Strategies to overcome challenges Diversifying the economy Venture into Life Sciences A*STAR to manage R & D aspects Set up bio-medical research institution, IMCB (Institute of Molecular and Cell Biology) Eg. Diagnostic testkit for SARS antibodies

Strategies to overcome challenges

Diversifying the economy

Venture into Life Sciences

A*STAR to manage R & D aspects

Set up bio-medical research institution, IMCB (Institute of Molecular and Cell Biology)

Eg. Diagnostic testkit for SARS antibodies

Case Study: Singapore Strategies to overcome challenges Diversifying the economy Attracting TNCs Generate jobs Affirms Singapore’s position Eg. Seagate’s manufacturing activities in Singapore

Strategies to overcome challenges

Diversifying the economy

Attracting TNCs

Generate jobs

Affirms Singapore’s position

Eg. Seagate’s manufacturing activities in Singapore

Case Study: Singapore Strategies to overcome challenges Diversifying the Economy Attracting TNCs Generate jobs Affirms Singapore’s position Eg. Seagate’s manufacturing activities in Singapore

Strategies to overcome challenges

Diversifying the Economy

Attracting TNCs

Generate jobs

Affirms Singapore’s position

Eg. Seagate’s manufacturing activities in Singapore

Case Study: Singapore Strategies to overcome challenges Diversifying the Economy Focus on service industry – education Regional hub for education through the set up of branches of international universities to attract talents Eg. University of Pennsylvania's Wharton School of Business, University of Chicago Graduate School of Business, Shanghai Jiao Tong University, Stanford University

Strategies to overcome challenges

Diversifying the Economy

Focus on service industry – education

Regional hub for education through the set up of branches of international universities to attract talents

Eg. University of Pennsylvania's Wharton School of Business, University of Chicago Graduate School of Business, Shanghai Jiao Tong University, Stanford University

Case Study: Singapore Strategies to overcome challenges Diversifying the Economy Focus on service industry – tourism Need for Singapore to be innovative in offering man-made tourist attractions Compete with other countries with natural attractions and man-made attractions Eg. IRs (Integrated Resorts in Marina Bay and Sentosa) to generate revenue and create jobs

Strategies to overcome challenges

Diversifying the Economy

Focus on service industry – tourism

Need for Singapore to be innovative in offering man-made tourist attractions

Compete with other countries with natural attractions and man-made attractions

Eg. IRs (Integrated Resorts in Marina Bay and Sentosa) to generate revenue and create jobs

Case Study: Singapore Strategies to overcome challenges Nurturing growth of Small and Medium Enterprises (SMEs) What are SMEs’ role? Providers of jobs Support operations of the TNCs Enhance Singapore’s attractiveness Eg. Polar Café – a successful SME

Strategies to overcome challenges

Nurturing growth of Small and Medium Enterprises (SMEs)

What are SMEs’ role?

Providers of jobs

Support operations of the TNCs

Enhance Singapore’s attractiveness

Eg. Polar Café – a successful SME

Case Study: Singapore Strategies to overcome challenges Nurturing growth of Small and Medium Enterprises (SMEs) Shortcomings of the SMEs Lack of resources Lack of expertise in using advanced technology Lack of skilled professionals to manage company – more family-run Lack of capital to venture to overseas market

Strategies to overcome challenges

Nurturing growth of Small and Medium Enterprises (SMEs)

Shortcomings of the SMEs

Lack of resources

Lack of expertise in using advanced technology

Lack of skilled professionals to manage company – more family-run

Lack of capital to venture to overseas market

Case Study: Singapore Strategies to overcome challenges Nurturing growth of Small and Medium Enterprises (SMEs) Government’s role in supporting SMEs Loan schemes from banks ASME (Association of Small and Medium Enterprises) to provide assistance Tax exemption up to three years

Strategies to overcome challenges

Nurturing growth of Small and Medium Enterprises (SMEs)

Government’s role in supporting SMEs

Loan schemes from banks

ASME (Association of Small and Medium Enterprises) to provide assistance

Tax exemption up to three years

Case Study: Singapore Strategies to overcome challenges Venturing abroad - regionalization Investing in countries with abundant land, lower labour costs and new market Provide expertise and capital to develop industrial parks in return for land and labour for Singapore companies

Strategies to overcome challenges

Venturing abroad - regionalization

Investing in countries with abundant land, lower labour costs and new market

Provide expertise and capital to develop industrial parks in return for land and labour for Singapore companies

Case Study: Singapore Strategies to overcome challenges Venturing abroad – regionalization Ensures Singapore’s economic growth is maintained Investment opportunities are spread Investing in countries with abundant land, lower labour costs and new market Provide expertise and capital to develop industrial parks in return for land and labour for Singapore companies

Strategies to overcome challenges

Venturing abroad – regionalization

Ensures Singapore’s economic growth is maintained

Investment opportunities are spread

Investing in countries with abundant land, lower labour costs and new market

Provide expertise and capital to develop industrial parks in return for land and labour for Singapore companies

Case Study: Singapore Strategies to overcome challenges Venturing abroad - regionalization Examples Suzhou Industrial Park = collaboration between China and Singapore Singapore Tech Park = collaboration between India and Singapore SingTel has investments over 20 countries Singapore government invests in new markets such as Middle East, Latin America and Central and Eastern Europe

Strategies to overcome challenges

Venturing abroad - regionalization

Examples

Suzhou Industrial Park = collaboration between China and Singapore

Singapore Tech Park = collaboration between India and Singapore

SingTel has investments over 20 countries

Singapore government invests in new markets such as Middle East, Latin America and Central and Eastern Europe

Case Study: Singapore Strategies to overcome challenges Venturing abroad - regionalization Shortcomings Less attached to Singapore Brain drain

Strategies to overcome challenges

Venturing abroad - regionalization

Shortcomings

Less attached to Singapore

Brain drain

Case Study: Singapore Strategies to overcome challenges Expanding market through economic cooperation Problem Small domestic market

Strategies to overcome challenges

Expanding market through economic cooperation

Problem

Small domestic market

Case Study: Singapore Strategies to overcome challenges Expanding market through economic cooperation Solution Sell products to bigger market

Strategies to overcome challenges

Expanding market through economic cooperation

Solution

Sell products to bigger market

Case Study: Singapore Strategies to overcome challenges Expanding market through economic cooperation How to do it? FTAs (Free Trade Agreements) ASEAN, NZ, Australia, USA, India, Jordon and South Korea SEZ (Special Economic Zones) Less stringent economic laws Tax and business incentives Revitalise the islands of Batam, Bintan and Karimun

Strategies to overcome challenges

Expanding market through economic cooperation

How to do it?

FTAs (Free Trade Agreements)

ASEAN, NZ, Australia, USA, India, Jordon and South Korea

SEZ (Special Economic Zones)

Less stringent economic laws

Tax and business incentives

Revitalise the islands of Batam, Bintan and Karimun

Case Study: Singapore Strategies to overcome challenges Managing resources efficiently Develop people by Promoting local entrepreneurship and technopreneurship Willing to take risks Coming up with new products Amending bankruptcy laws Giving recognition to outstanding local entrepreneurs Eg. Kenny Yap of Qian Hu Fish Farm

Strategies to overcome challenges

Managing resources efficiently

Develop people by

Promoting local entrepreneurship and technopreneurship

Willing to take risks

Coming up with new products

Amending bankruptcy laws

Giving recognition to outstanding local entrepreneurs

Eg. Kenny Yap of Qian Hu Fish Farm

Case Study: Singapore Strategies to overcome challenges Managing resources efficiently Promoting continuous learning among workforce WDA (Workforce Development Agency) to ensure workforce remains competitive Skills upgrading ESS (Employability Skills Systems) to help workers adapt to new jobs SDF (Skills Development Fund) provides financial assistance for skills upgrading

Strategies to overcome challenges

Managing resources efficiently

Promoting continuous learning among workforce

WDA (Workforce Development Agency) to ensure workforce remains competitive

Skills upgrading

ESS (Employability Skills Systems) to help workers adapt to new jobs

SDF (Skills Development Fund) provides financial assistance for skills upgrading

Case Study: Singapore Strategies to overcome challenges Managing resources efficiently Attracting Foreign Talent To meet manpower needs Bring in overseas contacts More business opportunities, create more jobs Diversify cultural landscape of Spore Eg. Engineers, Doctors, Craftsmen, artists, chefs etc.

Strategies to overcome challenges

Managing resources efficiently

Attracting Foreign Talent

To meet manpower needs

Bring in overseas contacts

More business opportunities, create more jobs

Diversify cultural landscape of Spore

Eg. Engineers, Doctors, Craftsmen, artists, chefs etc.

Case Study: Singapore Strategies to overcome challenges Managing the Environment - land To sustain growth and enjoy good quality of life Eg. Marina Bay will be integrated as a financial hub with quality housing, recreational and leisure facilities Eg. Jurong Island is a chemical hub Eg. Sungei Buloh Wetland Reserve, Chek Jawa are preserved nature sites Eg. Pulau Semakau used for waste disposal

Strategies to overcome challenges

Managing the Environment - land

To sustain growth and enjoy good quality of life

Eg. Marina Bay will be integrated as a financial hub with quality housing, recreational and leisure facilities

Eg. Jurong Island is a chemical hub

Eg. Sungei Buloh Wetland Reserve, Chek Jawa are preserved nature sites

Eg. Pulau Semakau used for waste disposal

Case Study: Singapore Strategies to overcome challenges Managing the Environment – Cooperation with organizations To sustain growth and enjoy good quality of life Eg. Cooperation with ASEAN to fight haze Eg. Signed international agreement that restricts the use of harmful ozone depleting substances (eg. CFCs)

Strategies to overcome challenges

Managing the Environment – Cooperation with organizations

To sustain growth and enjoy good quality of life

Eg. Cooperation with ASEAN to fight haze

Eg. Signed international agreement that restricts the use of harmful ozone depleting substances (eg. CFCs)

Case Study: Singapore Strategies to overcome challenges Managing the Environment – Public Education To sustain growth and enjoy good quality of life Recycling in schools Clean and Green Week Exhibitions, seminar, workshops Beach cleaning Planting of trees “Bring Your Own Bag” day at supermarkets

Strategies to overcome challenges

Managing the Environment – Public Education

To sustain growth and enjoy good quality of life

Recycling in schools

Clean and Green Week

Exhibitions, seminar, workshops

Beach cleaning

Planting of trees

“Bring Your Own Bag” day at supermarkets