SOCIOCULTURAL FACTORS
ARIZONA STATE UNIVERSITY
OMT 440 - INTERNATIONAL BUSINESS
WEEK 4
LEARNING OBJECTIVES.
1.
The importance of culture to international business
2.
Identify the sociocultural components of culture
3.
Discuss the importance of religion for business people
4.
Describe the cultural aspects of technology
5.
Discuss the breadth of the Information Technology Era
6.
Explain the importance of local language speaking skills
7.
Discuss the importance of unspoken language in international business
8.
Discuss the two classes of relationships in society
9.
Discuss Hofstede's dimensions of cultural values
DEFINITION OF CULTURE:
Knowing groups of people is one of the most important things in business activities,
both domestic business and international business. Whether in the sense of groups of people
as consumers, or as employees, or as actors in legal, political, governmental factors and as
other members of society in the business environment.
Society is made up of people who live within the framework of their culture, so to
understand a group, how it operates, what their norms and values are, it is necessary to
understand their culture. Culture cannot be directly observed, what can be done to understand
culture is to study the culture through observations of the social environment in which the
culture exists. Social and culture are interrelated, so understanding the culture of a group
means understanding the social conditions of the group, and understanding social conditions
means understanding their culture. Thus, social and cultural factors are more often called
sociocultural factors.
As with all things in the social sciences, there has never been a single, universally
accepted definition of culture. However, most agree on the definition of culture as the sum
total of beliefs, rules, norms, techniques, institutions and products of human activity that give
a group of people its unique characteristics. This definition implies that culture is a
characteristic of a group of people, rather than an individual characteristic. Culture is thus the
prevalent behavior of members of a social group.
With such an understanding, one of the characteristics of culture is that it is learned by
members of the community from their life in the group, and not genetically acquired because
it is passed down by the parents of each individual. Another characteristic is that culture is
shared and does not belong to an individual or individuals. The next characteristic is that
culture consists of many aspects that are interdependent with each other, so aspects will be
interdependent with the products of the group's activities, and so on. Since culture is owned
by a group, it indirectly defines the boundaries of one group to another.
In Indonesia, the opinion has developed that culture comes from the words budhi and
daya, so culture is defined as is all the noble thoughts, feelings, ways, creations, behaviors
developed by the ancestors of Indonesian human groups. This definition has implications for
an inaccurate understanding of the definition of culture, which results in mistakes in actions
to deal with these sociocultural factors.
IMPLICATIONS OF CULTURAL UNDERSTANDING:
This definition, which has been widely understood by ordinary people in Indonesia for
decades, has adverse implications for the development of Indonesian culture, which means
that it is detrimental to the civilization of the Indonesian nation. With the understanding that
culture is everything that is noble, good only, this means that it is argued that Indonesian
culture is a perfect culture, so it must be preserved, and prevent cultural infiltration from
outside the community that is not in accordance with Indonesian culture. Such a good
understanding means denying the natural law that only change is permanent in this world,
and that humans or human groups are imperfect, so all thoughts, feelings, ways, norms,
values cannot be perfect either. Therefore, the correct understanding is that not only the good,
or the noble, but all that is good or right, or noble, and all that is not good, not right and not
noble is the culture of a people group.
The implication arising from this correct understanding is that it is the duty of
Indonesian society to develop good culture, and eliminate bad culture, not to preserve culture.
Only when If this is achieved then Indonesian society can be said to have succeeded in
developing its civilization, becoming a more civilized society. Facts show that the good
culture of the Indonesian people decades ago, has faded and been replaced by a bad culture.
This is not only due to the adoption of bad cultures from outside, but more by the moral
degradation of the Indonesian people themselves as well. A more correct attitude towards
outside cultures is to understand that such influences are unavoidable, unless Indonesia wants
to become a closed society. The next step is how to choose good cultures to adopt to enrich
Indonesian culture, and not adopt bad cultures.
Another misconception is about the scope of culture itself. Until now, many still argue
that culture is only the cultural products, i.e. the art, music, dance, architecture, clothing,
food, language of a society. This misunderstanding, among others, has led for a long time the
Indonesian government to associate culture with tourism, so that there was once a ministry of
tourism and culture. Furthermore, until now much effort has been expended to seek
recognition from the outside world of Indonesia's cultural products. Indonesia is a country
that is busy seeking international recognition for its cultural products, fearing that they will
be "taken" by other countries. For example, the batik case, the Rasa Sayange song case, the
Reog Ponorogo case, the Pendet Dance case, and so on. Whereas it is clear that Indonesia and
Malaysia are predominantly Malay, so it is certainly not strange that many cultural products
are the same in each country.
Cultural products are more appropriately viewed as a society's contribution to the
world. Therefore, the cultural products of a society are not products that have intellectual
property rights. A society's cultural products belong to the world, and the more parts of the
world that adopt them, the better it is for the society that made the contribution. The clamor
for recognition of cultural products is actually an indication of a misunderstanding of the
correct understanding of culture.
In relation to business management, culture can be classified into state culture,
organizational culture, and professional culture. State culture is formed not from the choice or
desire of individuals, so the culture of a country differs in the level of basic values. On the
other hand, organizational and professional cultures are more the choice or desire of
organizations or individuals, so they are usually not permanent values.
CULTURAL MODEL:
A model of culture further explains the hierarchical elements of culture. At the top of
the hierarchy are the basic assumptions of a people group about life itself. This cultural
element is the most basic element that distinguishes one culture from another, and is the most
latent and difficult to change. The next hierarchy is the cultural elements in the form of
norms, values, beliefs, perceptions, behaviors of the community group. This cultural element
is also not easy to change, but is more likely to change than the element of basic assumptions
about life. The outermost hierarchy is elements of a community group's cultural products,
including artistic expressions, dances, music, clothing, home architecture, customs, and so on.
The picture below shows the cultural model.
SOCIO-CULTURAL FACTOR COMPONENT:
Society consists of people living in groups and their culture. The two are inseparable,
which is why the two factors, namely social factors and cultural factors, are commonly
referred to as sociocultural factors. Further understanding of the sociocultural factors of a
society can be learned from how the culture of the society expresses itself, namely the
components of the sociocultural factors of the society.
These components include: (1) Aesthetics, (2) Attitudes and beliefs, (3) Religion, (4)
Material culture, (5)Language, (6) Societal organization, (7) Education.
Aesthetics is concerned with the sense of beauty and the sense of the good and is
usually expressed in art, music, dance, clothing, food, architecture, and so on. Beauty and a
sense of what is right are different for different cultures. Understanding the aesthetics of a
society's culture indicates that being part of that group is very important in doing business
with that society.
Attitudes and Beliefs influence almost all human behavior and help keep societies and
individuals in order. Understanding the attitudes and beliefs of a society will give businesses
the ability to make informed decisions about doing business with that society. Notable in this
component are attitudes towards time, beliefs about achievement and work, and attitudes
towards change. All of which influence business activities in that society.
The characteristics of attitudes towards time pose many problems in international
business. For many societies, time is important, but for many others, especially those in
developing countries, time is not important. It has been suggested that the easiest way to
guess whether a society will develop or not is to look at its cultural characteristics in terms of
its attitude towards time. In today's highly competitive world, a society that does not value
time will certainly find it difficult to progress.
The characteristics of attitudes towards achievement and work also play a role in a
society's competitive ability in the global business world. A group that wants to achieve the
highest possible material wealth is a group that tends to be more advanced than others,
especially in material terms. However, this can only happen if the attitudes and beliefs of the
group are in the sense of how to achieve it, especially towards work to achieve this material
wealth. In many developing countries, the desire to achieve material wealth is followed by
the use of that wealth for consumption gratification, coupled with a reluctance to put in the
effort to achieve it, or in short a reluctance to work. This makes the people in these countries
highly consumptive, materialistic, and there are high levels of corruption and unscrupulous
business activities.
The characteristic of attitude towards change is an attitude that is very instrumental to
the success of a society to change. Although realizing that change is a necessity, in the sense
of the word that it must occur, but if a society has a culture that tends not to want to change,
then this affects the competitive ability of the community. Communities with a culture that is
difficult to accept change will tend to be unable to deal with changes that occur in the
business environment, so business activities in such a society will be difficult to develop.
Religion is an important cultural component, explaining the attitudes and beliefs that
influence people's behavior. Each religion has various forms and traditions and embody their
beliefs through rituals, prayers, norms, ways of dressing, eating, and various patterns of
behavior of adherents. Each person, group, society often has its own interpretation of the
religion it adheres to. Therefore, in every religion there are always many sects, schools of
thought, whatever they are called. The manifestation of religion in each society is also always
different, so this component will be different in different societies even for the same religion.
Differences in the definition of what constitutes a religion also exist in Indonesia. Since
1967, many people in Indonesia have argued that there are only five religions in the world:
Islam, Christianity, Catholicism, Buddhism and Hinduism. Then since 2001, there is another
religion, namely the religion of Confucianism. According to the general understanding, the
actual fact is that there are countless religions in the world. Not to mention if you count the
sects or schools of each religion, which are often countless. The number of religions in
Indonesia being 5 or 6 was actually a political decision in 1967, and in 2001, as religions
recognized by the Indonesian government. This political decision makes the understanding of
what religion is in Indonesia different from the general understanding in the world. The
world's understanding of religion is that there are many religions, although the religions that
are widely practiced by the world's population are Christianity, Islam, Buddhism and
Hinduism. Practically within each of these religions there are many sects that are often very
different, Christianity for example, actually consists of Protestant Christianity, Catholic
Christianity, Anglican Christianity, Orthodox Christianity, and so on. Within Protestant
Christianity itself there are many, many sects.
Understanding the basic beliefs of different religions is important as it contributes to a
better understanding of people's attitudes and views. Religious holidays and ceremonies can
affect employee performance and their work schedules. It should be recognized that problems
can arise when people of different religions or different sects work together. Religious
holidays and religious rituals will affect employee performance and work arrangements.
Material Culture (Artifact) is all the things that humans make. In studying the artifacts
of a society, the focus is on how people make things (technology), and who makes them and
why (economics). The technology of a society is the combination of useful knowledge used
by the society and leads to the achievement of the society's economic and cultural goals.
Technology is important in improving living standards and a vital factor in the competitive
strategy of firms in international markets.
Technological superiority is the goal of every company, but it is especially important
for international companies for many reasons:
1.
Enable companies to be competitive or even lead in the world market.
2.
It can be sold through licensing or management contracts, or it can be part of the
company's own products.
3.
It can give companies confidence in venturing into foreign markets, even if there are
already other companies there.
4.
Allows companies to obtain more favorable terms in overseas direct investment, as
recipient countries typically favor high-tech companies, often providing more
attractive facilities for high-tech companies.
Every technology contains cultural aspects, and this is very important in the
development, application and use of the technology. The development, application and even
use of technology requires a cultural attitude that supports this. A society with a culture that
does not support the development of technology will become a society of technology
consumption. A society with a culture that does not support the application of technology will
be a society that is unable to compete in today's global business world. A society with a
culture that does not support the use of technology will become a society that is consumptive
of various products so that it can continue to exist only if the society is endowed with factors
of production that can be used to finance its consumption.
The relationship between technology and societal prosperity is clear. A developed
society is one that utilizes high technology, and a less developed society is one that utilizes
low technology. Since technology is the main force for competing in business, it is clear that
a society that is unable to develop, apply or use technology will increasingly become a
society that does not progress, which is falling further and further behind. The use of high
technology often faces the conflict of technology vs. employment. High technology means
few jobs, low technology is labor intensive. Low technology makes it difficult for a society to
be competitive in business activities. There is a concept of appropriate technology, which is
technology that is appropriate to the level of development of a society that allows it to remain
competitive. The question is, does such appropriate technology exist?
EDUCATION:
One of the more measurable components of culture is education. Some commonly used
measures are: literacy levels, types of schools, number of schools and students, costs spent on
education, graduates of each level of formal education, and so on. The problem in
understanding this component is the validity of the data, as many governments from different
countries tend to publish incorrect data, for various reasons.
The most serious problem, especially in developing countries, is the quality of the
educational institutions themselves, the curriculum, the education syllabus, and the
implementation of education itself. Business players from abroad will find it difficult to
assess graduates of the education system in Indonesia. For example, undergraduate graduates
in Indonesia are those who have passed 144 credits. When compared to Australian graduates,
then with an equivalent SKS load, then Australian S1 graduates in 4 years have graduated by
reaching 96 SKS, and Australian S2 graduates has graduated with 132 credits. So can it be
concluded that Indonesian undergraduate graduates are actually higher than Australian
postgraduate graduates? In addition to the curriculum and syllabus, what is more difficult is
to assess the quality of education graduates in Indonesia at every level of education. Is an A
in Indonesia equivalent to an A in Australia or other developed countries? If it is equivalent
to an A, then how hard is education in Indonesia, because to pass the S1 level alone must take
a greater amount of burden even with Australia's S2 level. Not only is it heavy, but such a
large curriculum load has led to many opinions that the education system in Indonesia does
not allow what should be given in education, namely the ability to think and be ethical.
Problems in this component of education include what is known as brain drain, which
is the emigration of highly educated professionals abroad due to the unavailability of jobs or
proper compensation levels for them. This deprives the country of the best people who can
build its society and country.
Another issue is education for women. In many developing countries education for
women tends to be neglected. This belies the fact that the whole of education is based on
family education, and within the family, the role of the mother is more important than anyone
else for the education of the next generation.
Language is the way a person or group communicates. Language is a component of
culture which is most clearly understood. Recognition of a culture is clearly seen in language
skills. This is because all languages contain nuances, meanings of words that can only be
understood through an understanding of other cultural aspects of the culture.
In general, spoken language is better able to express what is intended than written
language. This is because spoken language consists of spoken and unspoken language.
Unspoken language often contains more meaning than spoken language. Each culture differs
in how much of a role unspoken language plays compared to spoken language. Unspoken
language can be recognized by gestures, distance between conversations, the use of words
and sentences, among other things. This often makes it difficult for business people to
properly understand foreign languages.
The societal organization of a culture is the structure or organization that is the pattern
of relationship arrangements that defines and regulates the way in which each member of the
society interacts with other members. These institutions can be divided into family
institutions and institutions based on the free association of individuals. The definition of
family differs from one culture to another. Some cultures consider family to be limited to
father, mother and children. There are also cultures that consider family to mean extended
family, which consists not only of the father, mother and children, but also all those related to
the father and mother, and even those related to the children each of these extended families.
In some cultures, all those from the same region are also considered extended family.
Associations that are not dependent on descent or marriage can form on the basis of
age, gender or common interests. Understanding these associations can be useful in attempts
to segment markets or needs.
UNDERSTANDING THE CULTURE:
COUNTRY CULTURE INTRODUCTION MODEL
Sociocultural factors are one of the environmental factors that greatly influence
business decisions in a country. Understanding the culture of a country is not easy for
international business people who want to do business in that country. From the previous
description, cultural understanding can only be obtained by experiencing living in the country
from the beginning, or it means being born and raised in the country. This is certainly not
practical for all international business people. Some researchers have proposed models that
can be used to get to know at least the important aspects of a country's culture. The
knowledge gained is thought to be sufficient to understand the culture of that society which is
important in making business decisions in that country.
HOFSTEDE MODEL:
Hofstede introduced five cultural dimensions of a society in a country, namely: (1)
Individualism vs collectivism, (2) Large power distance vs Small power distance, (3) High
uncertainty avoidance vs Low uncertainty avoidance, (4) Masculinity vs feminity, (5) Long
term orientation vs Short term orientation. The culture of a country's society will lie
somewhere in between the bipolar continuum of each of these dimensions.
Individualism vs collectivism is a dimension concerned with the extent to which
individuals in a society are dependent on their group. Individualism culture is a culture of
people who do not depend much on other groups of people, only on themselves and their
immediate family. Collectivism culture is a culture of people who cannot be separated from
their group, and feel only as belonging to their group, and have a tendency to look after each
other. Research by Hofstede shows that in general European and North American countries
such as the USA, Canada, Denmark, Sweden have cultures that tend to be individualistic
while Asian countries such as Indonesia, Pakistan have cultures that tend to be collective.
Hofstede's research also shows that countries with individualistic cultures tend to have a high
work ethic, high individual initiative, and competitive job promotions, while countries with
collective cultures tend to have a low work ethic, and less individual initiative, while job
promotions are based more on seniority.
Large vs small power distance is a cultural dimension of the extent to which group
members can accept that power is not equally distributed. Countries with large power
distance cultures tend to defer to the authority of powerful superiors. In countries with a
small power distance culture, there tends to be a small power differential within the group
organization. Countries with small power distance cultures tend to have organizations with
decentralized structures with short hierarchies, while countries with large power distance
tend to have organizations with centralized structures with high hierarchies.
High vs. Low uncertainty avoidance is a dimension of the extent to which people fear
uncertainty, leading to beliefs and institutions to try to eliminate the uncertainty. Countries
with a high uncertainty avoidance culture tend to have a high need for security and
confidence in skills, expertise, knowledge in their activities. Countries with a low uncertainty
avoidance culture tend to accept uncertainty as unavoidable, so they tend to surrender.
Masculinity vs feminity is a cultural dimension of the dominant values in a society.
Masculinity is a cultural characteristic of a society where the dominant values are success,
money and material things. Feminity is a cultural characteristic where the dominant values
are humanity and quality of life. Countries with a high masculinity index place income,
career, wealth, challenges as important in life. Countries with a high feminity index place
cooperation, a safe and pleasant environment as important in life.
Short term vs long term orientation is the time dimension of culture. Societies with a
long term orientation place importance on attitudes and behaviors that play a role in the
future, such as frugality, perseverance, saving money, and so on. People with a short-term
orientation place importance on values related to the present and the past, such as respecting
tradition, fulfilling social responsibilities, and high consumption patterns.
Hofstede (2005) has conducted research to measure the indexes of individualism, power
distance, uncertainty avoidance, and masculinity dimensions of many countries. The table
below shows these indices for several countries.
TROMPENAARS MODEL:
Trompenaars outlines five relationship orientations that express the way humans relate
to one another, which can be seen as dimensions of a country's culture. In addition, there are
also attitudes towards time and the environment, thus Trompenaars' model provides
comprehensive information to help explain how cultures differ in different countries, and
how to use that information to do business in that country. The dimensions of value
orientation and relationships are: (1) Universalism vs particularism, (2) Individualism vs
communitarianism, (3) Neutral vs Emotional, (4) Specific vs Diffuse, and (5) Achievement vs
Ascription. The other dimensions are (1) Attitude towards time, and (2). Attitude towards the
environment.
The universalism vs particularism dimension expresses how people view the scope of
their decisions. Universalism is a culture that believes that ideas and practices can be applied
anywhere without the need for modification. Particularism is a culture that believes that
circumstances determine how ideas and practices should be implemented and cannot be the
same in every different environment. The implication of this dimension is that when facing a
culture of universalism, it is necessary to argue rationally and professionally and directly to
the problem. While dealing with a culture of particularism it is necessary to deal with matters
that are often seen as out of context or irrelevant.
The individualism vs communitarianism dimension expresses how people in a group
view themselves. Individualism is when people see themselves as individuals, whereas
communitarianism is when people see themselves as part of a group. The implication of this
dimension in business is that facing a culture of individualism, it is expected that quick
decision-making and commitment to decisions will be required. The culture of
communitarianism. Whereas dealing with a culture of communitarianism requires patience
with the time it takes to reach agreement, and the need to foster long-term relationships.
The neutral vs emotional dimension expresses the degree of control over emotions A
culture with a neutral dimension is one where emotions are controlled, so people try to keep
their feelings to themselves. An emotional culture is one where emotions are naturally
expressed openly. The implication of this dimension in business activities is that if a person
from an emotional culture is doing business with a person from a neutral dimension, it is best
to have all agreements in writing. In business relationships, each party must understand that
the expression of emotion or the absence of emotion does not necessarily mean that there is
something wrong in the relationship.
The specific vs diffuse dimension expresses the degree of closeness of a person's
public space and privacy space. A culture with a specific dimension is when individuals have
a very large public space that they can share with others within that space, while their privacy
space where they will only share with family or close associates is very small. A diffuse
culture is when individuals have equally large public and private spaces, and are very
protective of their public space to allow sharing with others. The implications in business
relationships between these different cultures include understanding that in another culture it
may be important to respect a person's age, title, background and understand that people are
not open about many things. Likewise It is important to understand that other cultures need to
be efficient, to get to the point, and to not make a big deal out of titles, skills and anything
that is irrelevant to the business problem at hand.
The achievement vs ascription dimension states how status relates to one's
performance. A culture with an achievement dimension is when a person's status is obtained
on the basis of the extent of performance in the functions they perform, so in this culture high
status is given to those with high performance. Culture with an ascription dimension is when
a person's status is based on who or what person, so in this culture high status is given based
on age, gender, or social status or connections. The implications in business relationships
include that if people from an achievement dimension culture have business relationships
with people from an ascription dimension culture, then it may be worth noting to involve
people who have official positions, are senior, and are old enough. Similarly, if people from
an ascription dimension culture do business with people from an achievement dimension
culture, it may be worth noting to involve those who are well versed in the subject matter so
as to convince the other party, and still respect the other party regardless of seniority, formal
position, and so on.
Attitudes towards time by Trompenaars are classified into two approaches: sequential
and synchronous. In cultures with a sequential approach, people tend to do one activity at a
time, and show a preference for following a plan that has been made. In cultures with a
synchronous approach, people tends to do more than one activity at a time, and schedules and
plans change easily, placing more importance on relationships with others. Attitudes towards
time can also be seen from the degree of time reference, i.e. past and present time reference,
or future time reference. People from cultures with a present or past time reference tend to
solve problems encountered with reference to history. People from cultures with future time
reference are more concerned with future outcomes, and pay little attention to the present let
alone what has happened in the past.
Attitude towards the environment is the way in which people see the role of the
environment, and can be divided into inner-directed and outer-directed. Cultures with an
inner-directed attitude are cultures that believe that they can determine the success of their
activities. An outer-directed culture is one that believes that success is determined by the
environment. In dealing with an inner-directed culture, it is advisable to argue rationally, and
understand that gains are also followed by losses. While in dealing with an outer-directed
culture, it is important to remain diligent and patient and maintain good relationships, and
strive for mutual benefits.
PHYSICAL AND ENVIRONMENTAL FACTORS:
LEARNING OBJECTIVES.
1.
The role of location, topography, climate, and natural resources as factor conditions
depicted in Porter's diamond model
2.
Describe surface features contributing to economic, cultural, political, and social
differences among and within countries.
3.
Importance of inland waterways and traffic to the sea
4.
Explain the effect of climate on business
5.
Outline the options available for non-renewable and renewable energy sources and their
broad business implications
FACTOR CONDITIONS:
The business environment factor that plays a major role in a country's competitive
ability, and is also the factor that determines the characteristics of the country in international
business is known as Factor Conditions. Factor conditions consist of two factors: basic
factors and advanced factors.
Basic factors are physical factors that are a gift owned by a country, so they are factors
that already exist in the country without any effort from the country concerned to develop
them. Meanwhile, advanced factors are factors that are developed by the country's efforts. In
other chapters, various other advanced factors have been and will be discussed, while the
advanced factors are the factors developed by the country's efforts. In this chapter, in
addition to all the basic factors, we will also specifically discuss advanced factors in the form
of physical factors, namely the infrastructure that has been built by the country.
Basic physical factors are the country's location, topography, climate and natural
resources. While physical infrastructure factors include roads, ports, airports, power
generation units, clean water supply units, irrigation water supply units, drainage networks,
and so on owned by a country.
BASIC PHYSICAL FACTORS LOCATION:
A country's location is where it sits on a world map, describing who its neighbors are,
where its capital city is, and its major cities. Location is a basic physical factor that is
important to know because it is a factor that can explain a country's political and trade
relations, which directly or indirectly affect business with that country and business in that
country.
Every country in the world will conduct foreign policy, which means conducting
politics towards other countries in the world. In general, every country will state that in its
relations with other countries it will coexist peacefully, recognize the sovereignty of other
countries, and strive for mutually beneficial cooperation. In reality, every country will be
concerned with its own country, and as much as possible will try so that in relations with
other countries, it benefits its own country as much as possible. Importance of other countries
In the world, political relations are determined by various factors, the most important of
which is the proximity of the country's location. Thus, the location of a country will
determine who its neighbors are, and this will determine how the politics of these
neighboring countries affect business activities in the country in question. Locations that
strategically determine the impact of neighboring countries' politics on one's own country
include being neighbors with developed countries, or with poor countries, or with historically
hostile countries, and so on. The location of a country where it neighbors countries with
extreme ideologies will make it politically difficult for the country. The location of a country
that neighbors a developed country will be politically favorable to that country.
Geographical proximity is the main reason for trade between two countries. With
geographical proximity, transportation costs are lower, and service costs from sellers to
consumers also tend to be lower. Geographical proximity results in a country's major trading
partners, for example between the U.S.A. and Canada and with Mexico. Geographical
proximity is also the main reason for the formation of trade cooperation such as the European
Union, NAFTA, AFTA, and so on.
The proximity of markets and sources of supply explains why Japan is a major trading
partner of ASEAN countries, and also a major source of direct investment in these countries.
Because of Japan's proximity to China, Japan needs to maintain good relations with China, a
country that was rapidly developing into a major economic, political and military power. This
led Japan to import most of its soybean and wheat needs from China, which were previously
imported from the USA.
As a country located on the equator, Indonesia has great opportunities to increase its
trade and direct investment, due to its proximity to major countries north of the equator
(Japan, China and Korea) and south of the equator (Australia and New Zealand). In addition,
Indonesia's location on the world trade sea route between developed countries in Europe and
Australia and East Asian countries provides an opportunity to increase Indonesia's foreign
trade activities. Indonesia's inability to take advantage of the advantages of its location has
made Indonesia now more of a market for these countries, instead of making these countries a
market for its products, as well as a trade center. This opportunity has been well utilized by
Singapore...
TOPOGRAPHY:
Topography is the surface characteristics of a country, expressed in mountains and
mountain ranges, high and lowlands, deserts, and waters both sea and land. These
characteristics play a role in the economic, cultural, political and social structure of a country
and regions within a country.
Mountains and mountain ranges are barriers that tend to separate and inhibit
exchanges and interaction. Whereas plains, both upland and lowland, tend to facilitate such
exchanges and interactions, except where extreme weather makes it impossible, such as
deserts. The extent to which mountains are barriers depends on their height, extent and
length, the surface of the mountains, and how much habitation there is in the mountains. For
example, the Himalayas have separated India from China in such a way that transportation
between India and China is by air or sea rather than by land, which is much closer.
In the world, there is an area in the Pacific Ocean with a very large number of
earthquakes and volcanic eruptions, so it is called the Pacifc Rings of Fire. In this area is
Indonesia, a country with 400 volcanoes, 150 of which are still active. As such, life and
business activities in and with Indonesia are greatly influenced by this fact.
Deserts, like mountains, separate markets, increase transportation costs, and create
separate concentrations of people. There is practically no population in deserts, except for
nomads, or in deserts where there is a water source. The relationship between water and
concentration is particularly evident in Australia. Australia is a continent in itself, but its
population in 2013 was only 30 million. This is because Australia's geography is only
habitable along its coastline, while the center of the continent is practically an uninhabitable
desert. With such conditions, transportation between states in Australia is often easier by air
or sea than by land.
Forests are the opposite of deserts in their characteristics, but just like deserts, they also
tend to be barriers that separate and inhibit exchanges and interactions, especially when the
forest soil is less fertile. This can be demonstrated by the facts in Indonesia. Before the
destruction of forests for mining and plantations, the forests of Sumatra, Kalimantan,
Sulawesi and Papua were practically unpopulated. On the contrary, in Java, because of its
relatively fertile soil, the concentration of population was formed on the island of Java, with
the consequence of the depletion of forests in Java.
Indonesia is one of the countries with large natural forests. Table 5-1 below shows the
forest area of some of the countries with the largest forest area from 2008 to 2010. Forests in
developed countries tend to remain or increase over time, while those in developing countries
tend to decrease. China is one of the developing countries that continues to increase its
natural forest area. Indonesia, on the other hand, continues to decrease at an average rate of
0.7% per year, so it is estimated that within 100 years Indonesia will have no natural forests
at all. This situation is much better than the era from 1967 to 1998, when 600,000 km2 of
natural forest in Indonesia were HPH (Forest Concession Rights) forests, and as these are
now practically exhausted, Indonesia lost 20,000 km2/year of natural forest.
Waters on land, in contrast to mountains, deserts, and forests that inhibit human
interaction and proximity, attract people to live near water and facilitate their transportation.
Areas in every country with high population concentrations are those that have water, such as
lakes, rivers or on the coast.
Waterways that are important because they provide cheap access to markets in many
countries are called inland waterways. Before railroads were built, rivers were the cheapest
means of transporting products from one region to another. The importance of rivers as
product transportation routes has lost its role around the world, except for a few river routes,
such as the Rhine and the Amazon which are still very important transportation routes for
many countries in Europe and South America today. River routes that still play a major role
in a country are the Yang Tse Kiang river in China and the Mississippi in the U.S.A.
Access to the sea is an extremely important aspect of a country's international trade.
Transportation by sea is still the cheapest type of transportation for international trade,
especially when it is connected to river routes. There are 20 countries in the world that fall
into the category of "landlocked countries", i.e. countries without access to the sea, unless
they can gain access to the sea by the availability of efficient land transportation routes within
their own country and across countries that have access to the sea. This puts countries with
access to the sea in a favorable position to negotiate with countries that need it.
Land area and ocean area are other topographical aspects that are important in
international business activities. The ratio of a country's land area to its ocean area determines
an important physical condition factor for a country. Indonesia is an archipelago that stretches
from west to east for 6,470 km, with a land area of 1,922,570 km2, while the ocean is
3,257,488 km2. This condition characterizes that the most decisive physical condition factor
for business activities in Indonesia is marine.
The combination of a country's land area with its population provides data on
population density. Countries with a high population density facilitate marketing and
distribution of products, as well as lower marketing and distribution costs. This is because
population density means that people are close to each other, communication systems are
easier, and people are also available as labor.
All countries or areas with high population density are city states or urban areas
(Macau, Monaco, Singapore, Hong Kong), or small plains (Gaza Strip), or small islands (Java
Island). Some countries have a very uneven population distribution, so that in one area the
density is high, and in another area it is very low. Examples include Canada, Australia, Saudi
Arabia, and Indonesia.
As stated earlier, sea waters are an obstacle to human interaction and proximity. With
the number of inhabited islands reaching 6,000, it is not strange that Indonesia also has 1,340
ethnic groups (BPS Population Census, 2010), with the number of regional languages
reaching 746 languages (Language Center of the Ministry of Education and Culture).
Business activities in a country with such characteristics present their own problems. Product
distribution and transportation between islands in such a country is also relatively more
difficult.
In relation to marine waters, the length of the coastline is an important physical factor.
As an archipelago, Indonesia has the second longest coastline in the world, after Canada.
However, Indonesia has an economic advantage over Canada, as it can be utilized throughout
the year. While Canada is a four-season country, it is difficult to economically utilize this
coastline in winter. Shoreline length is an economically important topographic characteristic,
as consumable fish live not far from the shoreline. Table 5-4 below provides data on the
shoreline length of various countries.
The ratio of coastline to land area expresses how far the land is from access to the sea.
A country with a large coastline to land area ratio shows its advantage in being able to utilize
its marine resources. Of the 10 countries with the longest coastlines in the world, the
Philippines, Norway, Japan and New Zealand are the countries with the longest coastlines.
countries with a large ratio of coastline to land area, making it easier for these countries to
utilize their marine resources. Although still below these countries, the ratio for Indonesia is
also quite large, so it is actually not difficult for Indonesia to utilize its marine resources.
CLIMATE:
The climate in an area is expressed by the temperature, water precipitation (rain,
clouds, dew), and wind in the area. Climate is a very important physical factor for business
activities because it sets the limits to the extent to which people can carry out physical and
economic activities. A climate in an area that is very extreme will make it difficult for people
to live and carry out any activities in the area. Conversely, a climate that is pleasant for
human life will greatly help human life in the area and its business activities.
On the other hand, many studies have tried to link human resource capability to
climate. This is triggered by the fact that countries with a four-season climate are far more
developed than countries with a tropical climate. Many argue that humans living in areas with
a 4-season climate will face the condition of "survival of the fittest", so that each generation
will produce a new generation that is better than the previous one. In contrast, humans living
in countries with tropical climates do not face this problem. The relatively easy climate for
human life causes no selection by nature. This causes the next generation to be no better than
the previous generation in countries with tropical climates. In addition, a climate that tends to
be friendly to life makes humans not face severe challenges, so this shapes their personality
and behavior patterns which tend to be more relaxed and lazy, and more short-term oriented
in all their actions.
The different climatic conditions of countries have implications for the products
required by those countries. Climatic conditions demand different product specifications, for
example products to be used in humid tropical climates will require more complicated and
expensive packaging, machines operated in 4-season climates will require greater tolerance
characteristics than in climates that are relatively little different.
Climate, like location and topography, is a permanent fact. However, changes in
location and topography when they occur are mostly caused by nature itself. Climate change
much like what is happening today (global warming) is mostly caused by human behavior
itself. These changes are not micro, but macro, so they cannot be anticipated by a company
alone, but rather are external factors that can only be changed simultaneously. As such,
businesses need to take into account that the climate may change and thus affect their
business decisions.
NATURAL RESOURCES:
Natural resources are defined as everything that nature provides and humans need to
survive. Natural resources that are important for business activities are energy resources and
other minerals. Resources Natural resources that are sources of energy are renewable and
non-renewable. Non-renewable resources are those that come from fossils, namely
petroleum, coal, natural gas. Once the material is used, it will be used up, it cannot be used
again. Nuclear energy is also a non-renewable resource, but it can be used for a relatively
long period of time compared to fossil sources. Renewable energy includes hydroelectricity,
wind, solar, geothermal, wave, tidal, biomass, and ocean thermal energy conversion.
NON-RENEWABLE ENERGY RESOURCES.
Petroleum has been a cheap source of energy and as a raw material for the plastics
industry, fertilizers, and various uses in other industries. Thus, petroleum is a very important
material for the continuation of human culture in the world. Just like other natural resources,
petroleum is not available in sufficient quantities in every country in the world, and in fact to
date, the abundance of petroleum has been concentrated in only a few countries, particularly
in the Middle East. The data in Table 5-5, Table 5-6 and Table 5-7 show the amount of
petroleum reserves that have been discovered to date in several countries.
The possession of large petroleum reserves provides opportunities for the country's
economic development more easily. This is shown by several countries that have successfully
utilized the natural resource factors endowed to the country, so that they can develop
themselves into a country that is able to develop itself developed or developing countries.
Therefore, the recognition of a country's natural resources, especially petroleum, is very
important for international business activities with that country, or by that country. The
possession of abundant petroleum reserves by a country indicates the development potential
of the country, which indirectly indicates the magnitude of the country's potential as a market
for various products as well as a supplier of energy sources and raw materials for the
petrochemical industry.
With oil reserves of 4.1 billion barrels (Table 5-8 below), and current production levels
of around 940,000 barrels/day, it is estimated that Indonesia will run out of oil within 12
years, or by 2025, if no new oil wells are found. Since Indonesia was one of the founding
members of OPEC, and has considerable oil reserves and production, but since 2004,
Indonesia has been importing more oil than it exports, and has therefore withdrawn from
OPEC membership. While the world's oil reserves, production and consumption have been
increasing every year, Indonesia is a country that has been steadily declining in oil reserves
and production levels, indicating that there is no serious effort to find new oil wells, or that
there is no more oil to be found in the country. Data on changes in Indonesia's oil reserves,
production and consumption can be used to estimate the impact on Indonesia's potential as a
market for international business and a location for international direct investment.
Coal is also a non-renewable energy resource, but unlike petroleum, coal reserves are
still in a relatively safer amount compared to petroleum. However, the use of coal causes
relatively more pollution than other non-renewable energy sources, especially directly
contributing to global warming. With these considerations, coal use is usually predicted to
decline, but in reality coal use continues to increase. In 2012, the world's coal reserves
amounted to 1.038 billion tons, while total production amounted to 7.8 billion tons, so that if
no new reserves are found and the production level is the same, then coal reserves will
increase. The world will run out in 132 years from 2012. Table 5-9 shows the amount of coal
reserves in the 15 countries with the largest reserves, and worldwide in 2007.
Indonesia is not a country with large coal reserves, as can be seen in Table 5-9 above.
With reserves of only 4,968 million tons in 2007, Indonesia is the 15th country with coal
reserves. However, like oil, Indonesia is currently trying to exhaust its coal reserves as
quickly as possible. This is because as seen in Table 5-10, and Table 5-11, in 2012 Indonesia
was the world's number one coal exporter, with the world's fourth largest production. At this
rate of production, Indonesia is expected to run out of coal within 30 years.
Understanding the characteristics of a country's coal reserves, production, exports and
imports can give an indication of the country's potential for international business activities
both as a potential market and for international direct investment. Table 5-12 provides a list
of the world's largest coal importing countries. The business of extracting non-renewable
natural resources is fraught with the role of politics in being able to obtain site licenses and to
ensure operations run smoothly. Therefore, countries that rely on extraction businesses such
as oil and coal tend to have businesses that are controlled by the elites in the country. Another
tendency is that there is usually a wide economic and social gap between the elite and the
common people. This acts as a dominant characteristic of business activities in the country.
Natural Gas is the least polluting fossil energy source in use. Its high combustion
efficiency means that gas contributes less in terms of acid rain pollution, water and solid
waste than any other fossil fuel. World natural gas reserves in 2012 were estimated at 6.110
trillion cuft. Table 5-13 lists the countries with the largest natural gas reserves in the world in
2012. With natural gas reserves of 98 trillion cuft, Indonesia is number 11 in terms of
reserves. Table 5-14 provides data on Indonesia's natural gas production. At current
production levels, it is estimated that Indonesia's natural gas reserves will be exhausted
within 30 years.
RENEWABLE ENERGY SOURCES
Fossil energy sources are still the most widely used energy source today. However,
everyone agrees that since these energy sources are non-renewable, there will be no more
supplies to use at some point. In addition, the use of fossil fuels has a huge pollution impact.
Therefore, in the future, the world must rely on renewable energy sources.
There are 7 alternative renewable energy sources whose commercial prospects are well
known: wind power, biomass, solar photovoltaic, concentrating solar thermal power,
geothermal, ocean energy, and hydro power. There are many alternative sources under
development, but they are generally still at the research stage and not yet commercially
viable.
Wind power either on land or offshore (nearshore sea) has been used since ancient
times, among others, the famous until now as a tourist attraction is the windmill in Nederland.
The increase in the use of wind power in the world since 2005 has increased by an average of
27% per year. The world's largest user of wind power is China, for developing 1/3 of the
world's current wind power capacity. Nevertheless, Denmark is a country that utilizes wind
power as a resource for 20% of its electricity production.
Biomass is a category of renewable energy resources derived from the photosynthetic
process of plants converting solar energy into chemical energy. It is obtained from
agricultural, forestry, and household waste as well as from crops specifically grown for that
purpose. Biomass can be a solid (straw, wood chips), liquid (vegetable oil and animal waste)
or gas (biogas) and is typically used to generate power through combustion.
One of the biomass fuels is ethanol, and Brazil is a country that already uses 40% of its
gasoline needs for vehicles with ethanol produced from sugarcane. Sweden uses biomass for
31% of its heating resources, and China is the largest user of biomass for domestic heating.
Table 5-15 gives the development of biofuels production in the 2 largest producing countries.
Solar photovoltaic power (PV) is power based on the voltage generated when a certain
material is exposed to sunlight. Solar cells are now widely used in many countries, and are
the fastest growing energy generation technology. Germany is the center of the development
of solar cell technology.
Concentrating solar thermal power (CSP) uses lenses or mirrors to collect sunlight that
heats water. This heat then drives the engine, which is often a turbine engine to run an
electricity generator. CSP is growing rapidly in the USA and Spain, although use in many
countries has also become more widespread. Geothermal power derives heat stored in the
earth from either hot water or steam trapped in the earth. Drilling for this heat can be used
directly or to generate electricity. Several countries have used geothermal as an energy
source, with the USA, Philippines and Indonesia being the largest producers of electricity
using geothermal sources. As a country located in the "Rings of Fire", Indonesia has the
potential to produce 28,000 MW, or 40% of the world's geothermal resources, making it the
country with the greatest potential for geothermal resources.
geothermal in the world.
Ocean Energy comes from two sources, the heating of the ocean water and the
mechanical energy from tides and waves. This resource is still under development, and there
is only one power station using ocean energy in the UK. However, China, India, the U.S.A.
and the U.K. are developing technologies to utilize these ocean energy resources.
Hydropower produces energy from the flow of water and until now 16% of the world's
electricity is generated by hydropower systems. Countries with significant use of hydropower
for power generation are Brazil, China, India, Malaysia, Russia, Turkey and Vietnam.
Indonesia currently has 4,880 MW of hydropower generation, which is 13.17% of its total
power generation capacity.
MINERALS ARE NOT ENERGY RESOURCES:
Although most of the world's attention to natural resources revolves around the problem
of fulfilling energy resources, there are many other minerals that are important natural
resources for the continuation of world culture. These minerals are generally still available in
sizable reserves. Not all of these minerals are found in Indonesia. It is estimated that only 30
major minerals are found in Indonesia, including : gold, silver, copper, nickel, tin, aluminum,
iron, manganese, chrome, asbestos, bentonite, zeolite, sulfur, phosphate, and so on. The
estimated reserves of major minerals in Indonesia compared to the world can be seen in the
table below. Tin as one of the main minerals is produced in large quantities, although
reserves are only 8% of world reserves. Nickel is also produced in large quantities, although
its reserves only amount to 15% of world reserves. Table 5-16 lists Indonesia's mineral
reserves for several minerals in concentrate, and Table 5-17 lists Indonesia's production of
various minerals in concentrate minerals have not been processed, making it difficult to
compare the two tables.
There are 17 minerals that are classified as rare minerals, due to commercial reserves in
only a few countries. These minerals are very important because they are used in high-tech
products, making them very strategic products. The minerals are: scandium, yurium,
lanthanum, cerium, prascodymium, neodymium, promethium, samarium, europium,
gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium. Indonesia
has never examined the possibility of these rare mineral reserves.
ADVANCED PHYSICS FACTOR:
The factors categorized as advanced factors are the ones that most determine a
country's competitive ability. The fact shows that advantages in basic factors often prevent a
country from advancing. One category of advanced factors is physical factors, namely
infrastructure that has been successfully developed by a country. Recognition of the
infrastructure that a country has built and will build affects international business activities in
that country. The availability of physical infrastructure determines the ease of doing business
in a country, including the ease of exporting and importing from the country, as well as
making international investments into the country. The infrastructure discussed are seaports,
airports, roads, railways, power plants, water supply.
Seaports are an indispensable physical infrastructure factor in international trade.
Various countries have developed their seaports, and to date the data in Table 5-18 below
shows the number of ports these countries have built. Indonesia is an archipelago, with
17,058 islands, but the number of ports suitable for large-scale business activities is far
behind most developed countries.
Airspace is another infrastructure facility required for business activities, for the
transportation of business people and as a facility for the transportation of goods. The number
of airports and facilities available indicates the infrastructure facilities available to support
business activities in the country. According to data from the Directorate General of Civil
Aviation, in 2013, there were a total of 297 airports in Indonesia. Of the total airports, only
44 airports have runways with a length of 2,000m - 3000m, and only 4 airports have runways
with a length of 3000m - 4000m. Malaysia, with an area only 1/6 the size of Indonesia, has
38 airports with runways of 2,000m - 3,000m.
Roads are one of the most important physical infrastructure elements for business
activities, including international business. Roads play a major role in the transportation of
raw materials, components, and final products, which means input supply and product
distribution activities. Inadequate road facilities make supply and distribution costs tend to be
high and untimely. Road length data for each road classification in Indonesia is given in
Table 5-19 below. Within five years, there has been no increase in the length of national
highways in Indonesia, even though national highways should be the main infrastructure in
the movement of goods and people nationally. In comparison to Malaysia, with an area of
only 1/6 of Indonesia's, and a population of only 1/8 of Indonesia's, in 2012, Malaysia had
49,935 km of Federal (national) highways.
Trains are one of the most important means of transportation, due to their ability to
transport large numbers of people and goods at once. Therefore, in many countries that have
policies to prioritize public transportation over private vehicles, trains are the main choice as
a means of public transportation of goods and people. The problem is that a large investment
is required to build railroads. Thus, the availability of an extensive railroad network has a
positive impact on business activities in the country, both domestic and international
business. Indonesia has a significant railroad network in Java and Sumatra alone, with 2,710
km of railroad tracks in Java and 1,151.5 km in Sumatra, for a total of 3,861 km. Malaysia
has a total railroad 1,833 km long, but is able to internationally connect with Singapore, with
Thailand, Myanmar, and China.
Power generation is an element of physical infrastructure that is absolutely essential
for business activities in a country both domestically and internationally. The availability of
sufficient electricity is one of the competitive factors in a country. At the end of 2012, the
total installed capacity of electricity in Indonesia amounted to 34,206 MW with 4,925 power
generation units. Most of them, 26,768 MW (78.26%) were located in Java Island. The
percentage of installed capacity per plant type is shown in the table below.
The amount of installed capacity of Indonesia's electric power is still far from
sufficient, so that until now there are frequent power outages either because of inadequate
maintenance, or because of usage exceeding production capabilities. Malaysia with a
population 1/8 that of Indonesia has an installed capacity of 19,023 MW. In addition,
Indonesia's power generation is highly dependent on non-renewable energy sources (88%).
LIVING ENVIRONMENT
Business activities are conducted in this global environment. Industrialization has
brought prosperity and wealth to many countries, but it has also brought side effects on
human survival. The worst and more pronounced impact today is the impact on the
environment, which has become so dangerous that it threatens the sustainability of human life
itself. The environment is generally a commons goods, such as land, water, air, because it is
used by humans as a whole together. If a country tries to maximize short-term profits by
using these common goods, the impact will be detrimental to all people and their lives. The
world's problem is to balance economic progress and environmental protection.
Global issues that have a huge impact on business and society are ozone destruction,
climate change, damage to biological diversity, and threats to marine ecological systems.
Ozone destruction is mainly due to the use of CFC (chlorofluorocarbons) chemicals in the
production and operation of various products. The agreement of various countries to ban the
use of these chemicals has gradually succeeded in reducing these adverse effects. With the
success of the ban, it is estimated that by 2050, the ozone layer will return to normal.
Another problem is climate change, which occurs due to an increase in carbon dioxide
and other pollution in the air produced by human activities and businesses. This has led to an
increase in world temperature known as the global warming phenomenon. This global
warming will damage various conditions of human life so that if there is no effort to
overcome it, it will have an impact on human survival in this world. Global warming is
mainly caused by the burning of fossil fuels; and black carbon, which is smoke arising from
incomplete combustion of wood, charcoal; deforestation, which is the destruction of forests,
reducing the area of forests in the world; and cattle farming, because cow dung generates
methane which causes the greenhouse effect, thus contributing to global warming. Various
efforts continue to be made to prevent the worsening of global warming. This has an impact
on business activities that can no longer ignore the demands to participate in preventing
increasing global warming.
Biodiversity, namely the number and types of plants and animals, has been drastically
reduced. This loss of biological diversity will have a major impact on human life directly or
indirectly. The loss of biodiversity is mainly caused by the destruction or reduction of
tropical forests, because tropical forests are the source of many valuable products, including
food, medicinal materials and fibers. Various efforts have been made to preserve tropical
forests, so business activities in countries with extensive tropical forests, such as Indonesia,
need to pay attention to this.
Another concern is the threat to the sustainability of the marine ecological system.
Efforts have been made to maintain the survival of fish, coral reefs, prevent pollution of the
sea. Thus, various efforts have been made to do so, and business activities both domestic and
international need to pay attention to these demands and rules.
Various regulations, regulations, etc. from international institutions and countries in
the world have been issued to maintain a sustainable environment that is conducive to human
life and business activities. In addition, each country also issues its own rules and policies
regarding the environment of the regulation. All regulations and their implementation are
instrumental to the survival of companies doing business domestically and more so
internationally.
Business activities in Indonesia are also affected by various laws, government
regulations, ministerial decrees, ministerial regulations and various other regulatory products
on the environment. The laws that directly concern the environment in Indonesia are:
1.
Law No. 23 Year 1997 on Environmental Management
2.
Law No. 07 Year 20004 on Water Resources.
3.
Law No. 24 Year 2007 on Disaster Management
4.
Law No. 29 Year on the Protection of Plant Variety Protection.
5.
Law No. 26 Year 2007 on Spatial Planning
The national policy of the Indonesian government in the field of environment has been
explicitly formulated in a program that includes :
1.
Development and Improvement of Access to Natural Resources and Environmental
Information Program
2.
Program to Improve the Effectiveness of Management, Conservation and Rehabilitation
of Natural Resources.
3.
Prevention and Control of Environmental Damage and Pollution Program
4.
Institutional Arrangement and Law Enforcement Program, Natural Resources
Management and Environmental Conservation.
5.
Program to increase the role of the community in natural resource management and
environmental conservation.
PRACTICE QUESTIONS
1.
What are Factor Conditions?
2.
Explain why location and topography can be economically beneficial and give
examples!
3.
Give an example of a country that utilizes its climate for economic gain!
4.
Explain the advantages and disadvantages of non-renewable energy resources and
renewable energy resources!
5.
Describe the future of mineral not energy resources? Will there be an increase in
demand or a decrease in demand? include your analysis.
6.
Why do you think advanced physics is one of the factors that influence the progress of
a country?
7.
Explain why the environment can affect business activities.
