Chapter 9 Flashcards
(COUNTRY LEVEL) ECONOMIC IMPACTS OF GLOBALISATION: Economic Growth
D: Globalisation has increased trading and expansion of businesses in different parts of the world, and countries have benefitted from increased tax revenue and employment opportunities.
Ex: Free Trade Agreements is a treaty between countries to establish a free trade area where the exchange of goods and services can be conducted without taxes. This happened between USA and Singapore in 2004, involving electronics and information and photochemical technology.
A: With greater trade, there will be more companies willing to set up businesses in Singapore, generating more tax revenue and job opportunities in Singapore.
L: However, there may be competition with local products that may be more expensive, affecting the livinghood and income of local businesses
(COUNTRY LEVEL) ECONOMIC IMPACTS OF GLOBALISATION: Economic downturn
D: Globalisation also causes economic slump, which may affect other countries. A country may withdraw its investments and reduce its demands for goods and services from other countries
Ex: In the 2008 Global Financial Crisis, it triggered in the USA and affected many countries such as China, India and Europe. It caused countries to experience a fall in stock markets, as well as industrial production as demands for goods decreased.
A: -
L: It causes a slowdown in the country’s economy, facing setbacks in the progression of the country and productivity. This also causes less income and employment.
(COMPANY LEVEL) Economic impacts of globalisation: Higher profits/Market share
D: With more revenue and money earned through Multinational Corporations setting up in more than one country, allowing them to widen their market abroad.
Ex: CapitaLand Limited, is open to change and embraces innovation to differentiate and future proof a business. They where the first in the region to bring their business overeseas over 20 years ago and are now in over 20 countries.
A: Growth of MNCs to other countries allows international expansion of these businesses to maximise their market outreach, increasing competitiveness and helps to sustain economic growth.
L: Greater competition between local companies, forcing SMEs to invest which they may not be financially capable to do so, forcing them to close down eventually.
(COMPANY LEVEL) Economic impacts of globalisation: Lower profits/market share
D: SMEs, which are businesses with annual sales turnover of not more than $100 million or total number of workers not exceeding 100 cannot compete with Multinational corporations and may shut down.
Ex: MMI holdings, which is an SME, is the supplier of hard drive disks for US-based Seagate Technology which is an MNC. They play a complementary role to the MNCs to cater to the locals’ tastes and preferences.
A: SMEs have a better understanding of local conditions and are thus able to respond positively to competition, understanding local conditions and they become more favourable as they appeal to the locals
L: As MNCs grow and profit, it may create too much competition for the SMEs, forcing SMEs to invest which they may not be financially capable to do so, forcing them to close down eventually. They also obtain lower profits from competition.
(INDIVIDUALS) Economic impacts of globalisation: Higher income
D: Increase in one’s personal finances though having more job opportunities to work overseas to earn higher income with better job prospects, enabling them to have easier access to knowledge, skills and ideas due to increased mobility.
Ex: An engineer names Jumadi Husani, who is a Nanyang Technological University graduate, went to work in Dubai 4 years ago for triple his local pay. He also felt that it was less stressful with more freedom.
A: Globalisation enables increase ease to move around, to pursue better jobs and eventually having a higher income to support their families.
L: With more attractive job prospects, there is increased competition in the jobs, causing a loss in job opportunities.
(INDIVIDUALS) Economic impacts of globalisation: Loss of income
D: Loss of one’s personal finances due to increase rivarly between companies who sell similar products and services with the goal of achieving profit and revenue and market share growth.
Ex: In 2013, Uniqlo clothes company shifted its location of their business out of China as China’s manufacturing costs rose and it was no longer profitable and moved to Vietnam where it was half of the cost
A: -
L; Globalisation has caused increase mobility and causing increase in the competition for workers. Some have to contend with lower income or lose their jobs, causing less income for them to feed their families.
