Subscribe to my education channel. bit.ly/gohbangrui These slides introduce Chapter 9: How do We Respond to Tensions Arising from some Economic Impacts under Issue 3: Being Part of A Globalised World to the Secondary 3 and 4 students who are studying Social Studies for the Singapore current syllabus 2016. These slides are divided into 3 areas. 1. Economic Impact on Country [Slide 3] 2. Economic Impact on Companies [Slide 29] 3. Economic Impact on Individuals [Slide 50] Video TBC Any feedback is welcome.

1. 9 How do we respond to
tensions arising from some
economic impacts of
globalisation?

2. Being Part of a
Globalised
World: Is it
Necessarily
Good?
Chapter 8:
What does it
Mean to Live
in a
Globalised
World
Chapter 9:
How Do We
Respond to
Tensions
Arising From
Some
Economic
Impacts of
Globalisation
Chapter 10:
How Do We
Respond to
Tensions
Arising From
Some
Cultural
Impacts of
Globalisation
Chapter 11:
How Do We
Respond to
Tensions
Arising From
Some
Security
Impacts of
Globalisation

3. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

4. Made possible by the driving
forces of globalisation
In a global economy, these
interconnections are intensified
due to increased economic
activities across different
locations in the world, which can
in turn lead to economic
interdependence between
different parties.
Development in
transportation
Multinational
corporations
(MNCs)

6. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

7. Agriculture Manufacturing
Tourism Trade and
investments
that determine the impact on a
country’s economy
When a country
experiences
economic growth, it
is able to earn more
tax revenue and
potentially generate
more jobs for its
people over a period
of time.

8. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

9. More tax revenue

Improve infrastructure for
country
Therefore, most countries try to leverage on the opportunities
from participation in the global economy.
More trade and business

Provide a greater variety of goods
and services for consumption

11. 1. Limited natural resources
to support production for
its own consumption.
2. Small domestic or local
market
1. Global economy provide
Singapore with expertise,
products and service
2. Singapore encourages
foreign investments
3. Singapore invests in other
countries

12. Trade

Foreign Direct Investment (FDI)
Investments in a Singapore company
by a company from another country.

13. FDI in Singapore
$1363.7 billion
Major foreign investors in
Singapore :
1. USA
$280.9 billion,
2. British Virgin Islands
$117.9 billion etc.
Why was Singapore able to
attract these foreign
investors to trade?
Singapore’s ability to enable
businesses to enhance and
strengthen their important
activities here and leverage
on economic opportunities in
Singapore.

14. Trade

Free Trade Agreement (FTAs)
Treaties between countries to
establish a free trade area where the
exchange of goods and services can
be conducted, without tariffs or
hindrances, across their borders.

15. Substantial amount of tariff
savings and increased trading
between Singapore and
partner countries.
E.g. US-Singapore Free Trade
Agreement (USSFTA)
(Read pg. 278)
Electronics and
information
technology
Chemical and
petrochemicals
Textile

16. Why was USSFTA important to Singapore?

18. With greater trade, there will
be more companies looking
to set up in Singapore.
1. Generate more tax
revenue for Singapore
2. Create more job
opportunities for
Singaporeans
This will be beneficial for
Singapore’s economic growth

20. Cheaper products produced by other countries can
be imported to a country due to FTAs.
Competition with local products that may be more
expensive.
Livelihood of local producers or businesses
affected.
Some may have to close down due to their inability
to compete with these cheaper products.

21. Lesser benefits
for domestic
businesses in
various areas
for FDI
Little evidence
of substantial
transfer of
knowledge and
skills from
foreign
companies or
investors
Limited
employment
opportunities
for locals
Economic
linkages with
domestic
businesses are
weak or do not
bring about
significant
advantage to
them

22. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

23. In times of economic downturn, a country may withdraw its investments
or reduce its demand for goods and services from other countries.
This will lead to less income and employment for the countries affected.

24. E.g. 2008 Global Financial Crisis
(refer to pages 280-281)
1. Triggered by USA
2. Fall of stock markets
3. Decline in demand for goods
and services
4. Decrease in industrial
production increase in
unemployment
5. Affected employment of
more than 50 million people.

27. Fourth largest US investment bank in 2008
• Employed 25,000 people worldwide
15th Sept 2008, it filed for bankruptcy.
Its collapse was linked to the 2008 Global Financial
Crisis.
Banks and investors all over the world became reluctant
to extend further loan for fear of not being repaid.
This led to more businesses to close down as they could
not borrow money to fund their investments.

28. Singaporeans
1. Workers who lost their jobs
were
• given help finding new
ones.
• given opportunities to be
retrained with new skills.
2. Lower income families were
given assistance through
rental rebates.
Businesses
Smaller Singapore firms could
keep their operations going as
they could obtain financing with
reduced interest rates and
increased subsidies for their
insurance premiums.
New businesses and smaller
companies were granted further
tax exemptions
• They paid little or no taxes.

29. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

30. One way for MNCs to obtain higher
profits is through setting up
operations in different locations
• Allowed access to lower labour
costs and cheaper resources such
as land and raw materials.
• Obtain their components from one
location but assemble them in
different parts of the world 
cheaper production costs.

31. American companies dominated
the global companies e.g. Pepsico.

32. Many Singapore companies
gained higher profits by going
global as they expand their
operations overseas.
Ranges from healthcare, food,
fashion and technological
expertise.
Singapore government provides
loans, grants and tax incentives
to aid these companies.
Capitaland Keppel
Charles &
Keith
BreadTalk

33. Using the examples of Singapore companies from the articles
given, what strategies and values do you think helped them
to globalise successfully?

34. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

35. Companies also face increased competition from other
companies in a global economy.
This is a trade-off due to globalisation impacts on companies.
Impact: It is harder to compete for a share of profits from the
global economy

36. Thus, a company needs to
constantly innovate and
reinvent itself or risk losing its
share of the market or profits.
How?
Constantly introducing new
features into its products and
services
Must anticipate how a market
might change and ensure that
their products and services
remain relevant.

38. contribute more than
They are important to Singapore’s economy
50% 70%
of economic output of employment

39. Since 2000, globalisation resulted in spread of MNCs, bigger
local companies and SMEs.

40. 1. Unable to compete with
larger companies that sell
similar products or
services
2. Small domestic market
3. Shortage of expertise and
labour
Many SMEs are unable to
earn enough profit to sustain
their operations.

41. 1. Some SMEs are able to
understand local
conditions and choose to
offer goods and services
which appeal to the locals
2. Others play
complimentary role to the
MNCs.

42. E.g. Goh Joo Hin Pte Ltd is
the company behind New
Moon, Skippy and Mili.
The company remains
competitive through
strategies like offering a wide
range of food products and
keeping abreast of market
trends in processed food.

43. E.g. MMI Holdings, an SME, is the supplier of hard drive disks
for US-based Seagate Technology, an MNC.

45. 1 Various forms of financial assistance
to help SMEs at different stages of
growth
2 Aids in SMEs’ efforts to venture
abroad
3 Facilitates partnerships between
SMEs and larger corporations
4 Provides financial assistance in the
forms of loans, grants and tax
incentives

46. MNCs which are
unable to
anticipate
changing markets
and ensure that its
products and
services remain
relevant and
competitive could
face lowered
profits and
bankruptcy.

47. 2012: French
hypermarket chain,
Carrefour, closed its
two branches in
Singapore after 15
years (Plaza
Singapura and Suntec
City) due to
competition from
other companies
offering similar
products in
Singapore.

48. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

49. Globalisation created
mobility which
benefit individuals by
providing
opportunities for
people to collaborate
on local and global
scale.
Collaboration can
take place through
the Internet
(videoconferencing)
or face-to-face
(people travelling
across the world)
Mobility can also
cause challenges due
to increased
competition in
securing employment.

50. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

51. Globalisation made it easier for
people to look for jobs overseas.
This is usually encouraged by better
job prospects and higher income
overseas.
This created greater competition as
individuals compete with people
from the same country and others
from everywhere in the world.

52. There will be those who benefit
from this as overseas
companies may want to employ
them due to their skills.
However, others may be
vulnerable as they may lose
their jobs.

53. Chapter 9:
How Do We Respond To
Tensions Arising From Some
Economic Impacts of
Globalisation?
Economic Impacts
on Country
• Economic Growth
• Economic Downturn
Economic Impacts
on Companies
• Higher Profits / Market Share
• Lower Profits / Market Share
Economic Impacts
on Individuals
• Higher Income
• Loss of Income

54. Some workers have to contend with lower income or risk losing their jobs.
Reason: Companies get more access to foreign markets offering lower
labour costs.

55. E.g. USA in 1970s was affected when many Americans lost their jobs since
it could be done by people in China and India at a lower cost.
Over time, income increases in China and India.
Companies shifted to Vietnam, Myanmar, smaller Indian cities, inland
Chinese cities, Eastern Europe and Central America due to cheaper labour.
Companies
which have
outsourced to
Vietnam

57. First started operations in Shenzhen China due to low labour cost.
However, China manufacturing and labour costs rose, making it
unprofitable for the company.
In 2013, Uniqlo moved to Vietnam where labour costs were half of
China’s.

58. Some workers lost their job due to
inability to equip themselves with
skills required for the job.
Nature of skills evolved over time.
E.g. when countries moved from
agriculture to manufacturing and
service industries, skills will change.
Skills have also moved from
technological to cognitive skills such
as information processing and
interpersonal skills.

59. Loss of jobs and income can be experienced by workers of
different skill types.
Individuals who lost their jobs can
be those who are not highly skilled
and are lowly paid.
• Difficult to be reemployed
Workers who are highly skilled like
engineers can also be replaced by
equally skilled workers from other
countries who command lower
salaries.

60. Ministry of Manpower (MOM)
came up with Continuing
Education and Training (CET)
Masterplan to support
Singaporeans in remaining
employable with new and
better skills.
MOM offers training courses
relevant to Singapore workers.

61. For older workers, MOM created
the Workfare Training Support
Scheme (WTS) which allows them
to upgrade their skills in order to
remain employable, upgrade
their jobs and earn higher wages.
Refer to article on Workfare
Income Supplement.