Page 425 - The ISA Handbook in Contemporary Sociology

9781412934633-Chap-26 1/10/09 8:57 AM Page 396

396 THE ISA HANDBOOK IN CONTEMPORARY SOCIOLOGY

With regard to the issue of economic glob- competing against countries like Singapore.
alization, as this mini-case study has also This competition not only offered transna-
shown, the pharmaceutical sector does, in tional corporations even more choice for
fact, have a global strategy. Firms would like investment locations but probably also even
to acquire ‘more efficient’ – or simply put, cheaper resources. When the Singapore
cheaper and/or better – resources from government collaborated with other govern-
abroad, in addition to seeking to expand into ments to jointly attract FDI, this gave
new markets. Previously, local state regula- transnational corporations even greater
tions had prevented this process. However, as options. Finally, when the Singapore govern-
Singapore has shown, if the state creates the ment introduced the Biomedical Sciences
right conditions for capital, which in this Initiative, as a strategy for regaining compet-
case involved providing the adequate level of itive advantage, it showed that the pharma-
infrastructure and human resources, then ceutical sector – a business sector that was
capital will respond accordingly. It is a good once considered not to have a global strategy –
illustration of how capitalism and the state immediately seized upon the new opportuni-
jointly drive economic globalization through ties to acquire cheaper resources outside of
competition. its home market.
This chapter concludes by revisiting the
most basic premise of capitalism, namely
that capital is not only driven by the entrepre-
CONCLUDING REMARKS neurship of firms but also requires the
involvement of the state. Under conditions of
The purpose of this case study was to under- economic globalization, where capitalism is
stand the dynamics within inter-state compe- predominantly global rather than national,
tition for FDI, and also how this competition global capital now requires the involvement
in turn contributes to economic globalization. of competing states.
With regard to the dynamics of competition,
an examination of the case of Singapore
between 1965 and 2005 shows how a govern-
ment, through its policies, was able to achieve NOTES
competitive advantage. However, sensing the
erosion of this advantage through the emer- 1 In some cases, direct foreign investment is
treated as a component of FDI (see especially
gence of new competitors, the state not only
UNCTAD website at http://stats.unctad.org/fdi/) for
attempted innovation to find new advantages purposes of national statistical accounting. However,
but also attempted to enter into cooperation. for this chapter, the two concepts will be used inter-
As expected, conflict was found to inhere in changeably.
all competitive situations. Indeed, conflict 2 There were also other contributing factors, such
as the devaluation of the US Dollar (Plaza Agreement),
can easily emerge within cooperation, either
for the rise of economic globalization. See Sklair
because of internal rivalry or external compe- (1994) for a summary.
tition. 3 Regional here refers to the case of ‘the
This case also shows that inter-state com- European Union’ countries, or the North American
petition was a critical factor in driving eco- Free Trade Area (NAFTA) countries, while local refers
to specific countries including Japan, which is consid-
nomic globalization. Due to the policies of
ered a ‘first world’ economy (see Rugman, 2004).
the Singapore government in the 1960s, 4 Found at website, http://www.jtc.gov.sg/Pro
many transnational corporations were able to ducts/industry+clusters/tuas+biomedical+park.asp
exploit cheaper resources in Singapore for 5 The following information is posted at A*Star’s
the purposes of cost savings. When other official website: The agency comprises the Biomedical
Research Council (BMRC), the Science and
Asian countries wanted to attract FDI for
Engineering Research Council (SERC), the Corporate
purposes of local development, they began Planning and Administration Division (CPAD), the