Sec 4 SS CH 9 - Economic Impacts of Globalisation 2

Sec 4 SS CH 9 - Economic Impacts of Globalisation 2

Impacts on Companies and Individuals

Economic Impact on Companies

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Advancements in transport and technology have enabled many companies to benefit from globalisation

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Companies can widen their market reach and benefit from

1. Higher profits

2. Larger Market share​

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Economic Impact on Companies

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​MNCs can set up their operations in different locations so that:

1. Allows access to new markets overseas

2. Access to cheaper labour

3. Cheaper resources (land and raw materials)​

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​Companies can take advantage of cheaper production costs to make more profits

Higher profits (+)

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American MNCs have taken advantage of opportunities in a global economy

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E.g. PepsiCo​

Sells products like soft drinks and potato chips​

Examples

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Singapore MNCs have also taken advantage of opportunities in a global economy by expanding their operations overseas

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E.g. Super and CapitaLand

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https://www.supereveryday.sg/

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https://www.capitaland.com/sg/en.html

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Examples

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Companies may face increased competition from other companies in the global economy

Harder to compete for a share of profits in the global economy.

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Companies must constantly innovate / introduce new features to remain competitive

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E.g. Smartphone market​

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Lower Profits (-)

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SME (Small and Medium Enterprises)

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Employ 70% of Singapore's workers

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Increased spread of MNCs, many SMEs have found themselves unable to compete​

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SMEs are usually smaller, with less resources and expertise and cannot compete with the resources of an MNC.​

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SMEs (-)

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Some SMEs can succeed as they understand the local conditions and offer goods/services which appeal to locals

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SMEs also may play a complementary role to MNCs

e.g. Delivery / logistics​

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SMEs (+)

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MNCs may also be inable to anticipate changing markets ad ensure their products remain relevnt and competitive

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E.g. Carrefour, the first hypermarket in Singapore closed down after 15 years in Singapore​

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MNCs (-)

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Other MNCs that have shut down in Singapore

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MNCs (-)

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John Little closed after 174 years in Singapore

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MNCs (-)

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Economic Impact on Individuals

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Globalisation enables increased mobility​ that provides opportunities for people to collaborate on a local and global scale.

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E.g. Video Conferencing

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Work can be done from anywhere, for any country.​

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Impact on Individuals​

Better communications and transportation = easier to look for jobs overseas

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Leads to better job prospects and possibly higher income​

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Higher income (+)

Increased mobility also means more who are vulnerable to losing their jobs ​as companies get more access to foreign markets offering lower labour costs

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Foreigners may look for work in Singapore and are willing to accept lower salaries​

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Loss of Income (-)

MNCs may close down operations and shift to other locations at any time due to increased mobility

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This leads to retrenchments / job losses​ in affected countries

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E.g. Uniqlo moved its factory from China to Vietnam due to lower labour costs in Vietnam​

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Loss of Income (-)

Some workers may lose their jobs because they may have outdated skills

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Skills needed for jobs change as economies evolve​

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Both low skilled and high skilled workers may lose their jobs to foreigners​

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Loss of jobs (-)

To support Singaporean workers facing increased competition for jobs

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CET (Continuing Education and Training) - help Singaporeans remain employable with new and better skills

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WSS (Workfare Skills Support) - allows older workers to upgrade their skills​

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Singapore Strategies