The socio-economic impacts of globalization on Singapore Report
a) Powered by advances in telecommunications, transportation and finance, globalization empowers consumers to purchase the best the world has to offer and gives producers the tools to find buyers anywhere. This will mostly benefit the white collared workers more as they will have the spending power to take advantage of this.
Technology will also be effected in a positive way, in that, by the more internationalized the world economy is, the more use producers will get out of different production processes and other invented processes available in other countries. The faster diffusion of knowledge will raise the level of goods produced as well as advance technology in a worldwide prospective. With technology more widespread, Singapore will be able to make positive advancements, increasing the economy, and in turn, helping and increasing the national economy. With globalization, comes global competition, this would thus cause us to strive for improvement, thus our economies will move forward.
Singapore will benefit when lower transport costs and reduced tariffs make goods produced far away more affordable bought about by globalization. Singapore products, which are, exported, gain as well because they sell into a wider market. Though manufacturers of goods for Singapore’s own consumption do not gain, but competition from MNCs will cause them to continuously improve efficiency and better satisfy local customers in order to stay competitive. . A problem of globalization is that it could open the Singapore capital and foreign exchange market to new vulnerabilities. The 1998 Asian Financial Crisis is a good example whereby the dramatic out-flows of short-term capital destabilized the East Asian economies mainly because of globalization. This potential risk is significant to a small and open economy like Singapore, particularly as the banking sector has just liberalized not long ago.
Globalization may also have a adverse impact on Singapore’s economy, as with globalization there is most likely industrial development brining along an improvement in people’s standard of living, thus people will demand for higher pay and foreign investors leave for less developed countries with lower cost productions.
b) Globalization will have an adverse effect on manufacturing employment, which will be mainly felt by blue-collared workers. As globalization develops and Singapore continues its industrial development, it will focus more on information-base industries and R&D thus less emphasis will be placed on manufacturing and also mechanization will enable good to be produced more efficient, these may lead to a decrease in need of blue collared worker and thus a higher unemployment rate.
Also technology-driven shift in labor demand away from less skilled workers and toward more skilled workers because of the sharing of information through globalization. This shift has resulted in increased wage inequality in some countries as white-collared workers will get more and more pay while blue-collared workers will get the same or less pay.
Another possibility of globalization is the risk of structural unemployment. Business everywhere are constantly pressured to restructure and move up the value chain to survive, thus in this era of globalization, white-collared workers are forced to learn new skills and find new jobs or be retrenched and become structurally unemployed. Also, specialization and trade will also cause workers in unprofitable industries to lose their jobs, while on the other hand, benefiting those in blooming industries. Thus, workers in the former will also face structural unemployment if they are not versatile to switch to new jobs that require new skills.
Only one-third of our existing workforce is skilled, another third is semi-skilled, whereas the remaining third is unskilled. While the skilled workers, or white-collared workers mostly those in the profitable industries because Singapore has a comparative advantage in knowledge-based and technological-intensive goods and such industries are hence able to profit more than those labor-intensive industries that use unskilled labor or blue-collared, will gain from freer trade, the majority of the lower-skilled workers will most probably lose out, as they fail to cope with the rapid changes in technology and skills requirements. Another case of inequity will be between the wealthier who has access to the Internet and poorer people who do not even have access to the basic computer. In other words, the social inequality will be aggravated in the new global age if Singapore intends to globalize and carve a niche in the Information Technology market.
This may also his lead to a societal divide, which can take various forms. For example, the individual level; on the family unit level where parents complain that they can’t catch up with what the kids learn, using experienced by most blue-collared workers and some white collared worker. There may also be a possibility of ethnic division in Singapore’s multiracial society when certain ethnic groups are lagging behind in the digital know-how, i.e. more blue-collared workers.