Chapter 8&9 Flashcards
What are the 3 main driving forces of globalisation?
Developments in transportation, Growth of MNCs, and Advances in technology.
DExA developments in transportation.
Improvements made to the size and speed of transportation modes enabled more goods and people to be carried per trip. This led to savings in transport costs.
Singapore’s transportation system is efficient and has integrated transportation infrastructure which facilitates the movement of people and goods, and in turn the exchange of ideas between countries. The extensive rail and road networks provide a high degree of connectivity between Singapore and neighbouring Malaysia.
When goods and people can be moved around the world more quickly and at a lower cost, it facilitates the process through which people’s activities and ideas around the world become interconnected,
DExA growth of MNCs.
As MNCs continue to grow in their number and size, they control more aspects of international trade and investment.
Starbucks has operations spanning 65 countries.
The global span of their operations increases the economic interconnections between people and goods throughout the world. Such interconnections can also lead to the interdependent relationships between the parties involved in the operations of the MNCs, driving globalisation.
DExA advances in technology.
Technological advancements in communication have resulted in greater access to the Internet and the increasing use of mobile communications. These facilitate the communiccation and exchange of information across the world.
The Motorold DynaTAC has evolved and nawadays we use Apple IPhones.
These facilitate the communication and exchange of information around the world.
What are the groups that globalisation can affect, and what are the positive and negative effects for each group?
- Economic growth or downturn on countries.
- High/lower profits/market share for companies.
3.Higher/loss of income on individuals.
GDExA economic growth.
Globalisation increaseed trade and business expansion i different parts of the world, meaning a lot of countries have benefitted from increased tax revenue and employment opportunites. A country can thus improve infrastructure.
Singapore sustains its economic growth through foreign direct investment. Local companies invest in foreign countries’ companies through this. In 2017, the FDI in SG amounted to over $1568 billion. This enables businesses to enhance and strengthen their important activities here and expand their business in Asia.
SG has seizeed the opportunities available in the global economy to strengthen trade ties with other countries. This may let Singaporeans benefit through the greater variety of goods and services for consumption.
GDExA economic downturn.
When the economy of one country faces a downturn, it may affect other countries. This can happen by a country withdrawing its investments or reducing its demand for goods and services from other counries, leading to less income and employment for the countries affected.
The 2008 Global Financial Crisis was triggeres in the USA and affected many countries in the world.
As a small, open economy, Singapore was inevitably hit by the GFC, as it earns its living b trading with and providing services to the world. Exports, the tourism sector and the broader economy were hit. Singaporeans lost their jobs due to the recession.
GDExA economic downturn.
When the economy of one country faces a downturn, it may affect other countries. This can happen by a country withdrawing its investments or reducing its demand for goods and services from other counries, leading to less income and employment for the countries affected.
The 2008 Global Financial Crisis was triggeres in the USA and affected many countries in the world.
As a small, open economy, Singapore was inevitably hit by the GFC, as it earns its living b trading with and providing services to the world. Exports, the tourism sector and the broader economy were hit. Singaporeans lost their jobs due to the recession.
GDExA higher profits/market share.
Developments in transport and advancements in technology have allowed many companies to widen their market reach by expanding their production and sale of goods in many parts of the world, ;etting them benefit from higher profits and larger market share. Setting up operations in defferent locations allows access to new markets abroad, lower labour costs and cheaper resources such as land and raw materials.
Xiaomi has increased in proportion of the world’s market share, from 0.1% in 2011 to 4.4% in 2014.
When companies have higher profits, Singaporeans will benefit from higher incomes, improving standard of living.
GDExA lower profitst/market share.
Increased competition from other companies in the global economy makes it harder for companies to profit from the global economy. To remain successful, a company needs to constantly innovate and reinvent itself or risk losing the share of the market or profits.
Apple has decreased in proportion of the world’s market share from 23.0% in 2011 to 19.7% in 2014.
When companies have lower profits, Sinaporeans will suffer from lower incomes, decreasing standard of living.
GDExA higher income.
Globalisation enables easier access to knowledge, skills and ideas, as well as increased mobility. Globalisation has facilitated mobility so people can look for jobs easily overseas, letting them have a higher income.
When Singaporeans go over to work in Australia in jobs that are in demand, such as child care or engineering, they will earn higher income than Singaporeans here.
The locals can benefit from a higher standard of living. They have a higher purchasing power due to the higher income, allowing them to be able to buy more things.
GDExA loss of income.
Some workers may be adversely affected by increased competition so they have to contend with lower income or risk losing their jobs. Jobs may be lost when SMEs produce the same goods as MNCs, and lose profit as MNCs are able to offer lower prices which they cannot.
Uniqlo first started production in CHina because of low labour costs. As China’ manufacturing and labour costs rose, it was no longer profitable for the comany t base its product operations in China. In 2013, Uniqlo moved to Vietnam where labour costs were half that of China’s leaving Chinese workers jobless.
When individuals earn lower income, they pay less taxes, which results in countries having lower tax revenue. This means that countries will be less able to develop infrstructure.
