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CHAPTER 1
INTRODUCTION
1.1 Preliminary
The business environment has changed significantly since the last decades. Efforts toward globalization have increased due to an increase in connectivity and interdependence
among different markets and business niches around the world. Globalization, which is the process of international integration, has become the propeller of global economic growth
Kim, 2010. International trade has managed to record positive growth annually for the past five years 2005-2010, with an annual average growth of more than 7 WTO,
2011. Table 1.1 shows the data of global merchandise trade dating from the middle of the
20
th
century. The data highlighted an increase pattern for both merchandise exports as well as imports. More remarkably, the value of global merchandise exports and imports has
increased significantly from US59 billion and US62 billion in 1948 to US14,851 billion and US15,077 billion in 2010, respectively WTO, 2011. This is an indicator which
signaled how developed and developing countries are able to create competitive advantages by opening their economies to the global stage. Impressive evidence could be
seen from the favorable economic performance exhibited by one of Asia’s own economic giants, The Peoples Republic of China PRC.
PRC is the second largest economy in the world, closely behind the United States US with a nominal gross domestic product GDP of US8,229.4 billion in 2012 and an
estimated US9,181.4 in 2013 IMF, 2014. It is the fastest-growing major economy in the
2 world, with growth rates averaging 10 over the past 30 years. Its share in the global
growth from 1995 to 2002 was estimated at 25, compared to 20 in the US Kim, 2010. Besides PRC, other developing countries in Asia have also experienced rapid economic
growth. For example, in 2013 alone, GDP increased by 4.7 in Malaysia, 2.9 in Thailand, 5.8 in Indonesia and 7.2 in Philippines IMF, 2014, displayed in Table 1.2.
Nevertheless, various conflicts of interest emerged between the economic profit originating from industrialization and the accompanying adverse effects due to severe
pollution and destruction of natural resources caused by such industrial activities. For instance, rapid industrial development in PRC since the 1980s as a result of economic
reformed stirred concern. PRC, which emitted 5.92 tons per capita of carbon dioxide CO
2
or approximately 25 of global emissions in 2011, has been the biggest emitter of CO
2
in the world since 2006 IEA, 2013. There is a strong view that the level of CO
2
and other greenhouse gases GHG such as methane, nitrous oxide and a number of gases that are
created from industrial processes is rising Rajemi, 2010. Although the flow of carbon emissions is not harmful to the public immediately, contrasting with the other polluting
gases, it is a major contributor to climate change problems. Recognizing the importance of economic development to society, creation of
material wealth and prosperity has been a primary goal for many countries. However, is the rapid industrial development really managed to improve the social well being? As reported
by the International Labor Organization ILO, on average, 6,300 people die globally as a result of occupational accidents or work-related diseases each day. Workers suffer from
317 million accidents happen while working annually, together with occupational diseases, resulting more than 2.3 million deaths per year ILO, 2014. Hence, the urgency of further
scrutiny and action to ensure survival of human life is needed.
3 Table 1.1 Global Merchandise Trade
Year 1948 1953 1963 1973 1983 1993 2003 2010
Value Billions US Merchandise exports
59 84
157 579
1838 3676 7377 14851 Merchandise imports
62 85
164 594
1882 3786 7695 15077 Source: World Trade Organization, International Trade Statistics 2011
Table 1.2 GDP Growth for Selected Countries
Country Year
2005 2006 2007 2008 2009 2010 2011 2012 2013 GDP at constant prices change
United States 3.4
2.7 1.8
-0.3 -2.8 2.5
1.8 2.8
1.9 Japan
1.3 1.7
2.2 -1.0 -5.5
4.7 -0.5
1.4 1.5
United Kingdom 3.2
2.8 3.4
-0.8 -5.2 1.7
1.1 0.3
1.8 South Korea
4.0 5.2
5.1 2.3
0.3 6.3
3.7 2.0
2.8 Hong Kong
7.4 7.0
6.5 2.1
-2.5 6.8
4.8 1.6
2.9 Taiwan
4.7 5.4
6.0 0.7
-1.8 10.8 4.2 1.5
2.1 Singapore
7.4 8.9
9.0 1.9
-0.6 15.1 6.0 1.9
4.1 Thailand
4.6 5.1
5.0 2.5
-2.3 7.8
0.1 6.5
2.9 Philippines
4.8 5.2
6.6 4.2
1.1 7.6
3.6 6.8
7.2 Indonesia
5.7 5.5
6.3 6.0
4.6 6.2
6.5 6.3
5.8 Malaysia
5.0 5.6
6.3 4.8
-1.5 7.4
5.1 5.6
4.7 Source: International Monetary Fund, World Economic Outlook Database, April 2014
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1.2 Sustainability in manufacturing
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