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Introduction
Current Event Research and Assessment
Global food shortages and security, climate change, and ongoing conflicts such as the
Russia/Ukraine and Gaza situations are exerting significant pressure on the economies of
ASEAN founding members, including Indonesia, Malaysia, the Philippines, Singapore, and
Thailand.
Global Food Shortages and Security: ASEAN economies are particularly vulnerable to
global food shortages, given their dependence on agricultural imports for key staples. The
rising costs of food commodities on the global market can lead to inflationary pressures
domestically, affecting consumer spending power and overall economic stability. For a
biotech company, this could mean increased costs for raw materials, especially if their
products are derived from or depend on agricultural commodities. In the short term, this may
squeeze profit margins, while in the medium term, it could necessitate a shift towards more
sustainable and less volatile sources of raw materials. For instance, Indonesia has faced
challenges in maintaining rice stock levels due to global supply chain disruptions.
The global food policy report by the International Food Policy Research Institute (IFPRI)
discusses how the coronavirus pandemic has exacerbated food system vulnerabilities,
potentially affecting countries like Indonesia that rely on food imports (IFPRI Report 2022).
Climate Change
ASEAN economies are affected by climate change in agriculture, tourism, and infrastructure.
Extreme weather and rising sea levels threaten these nations’ economic outputs and growth.
Thailand is vulnerable to climate change, which affects its agriculture sector, which generates
jobs and GDP. Growing temperatures and unpredictable rainfall threaten crop yields,
especially rice, a major export. According to the Asian Development Bank (2021),
agricultural output losses from climate change in Thailand could cost over US$ 94 billion by
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2050. Biotech companies in this region may face operational disruptions and higher
adaptation and mitigation costs. The need for climate-resilient crops could drive demand for
genetically modified seeds, but climate uncertainty could risk field trials and product
effectiveness.
Ongoing War in Russia/Ukraine & Gaza:
Geopolitical tensions, especially the Russia/Ukraine war, have affected global energy and
food markets, which are vital to ASEAN economies. Energy and food prices affect inflation
and the cost of living, which may reduce consumer spending and economic growth. NEDA
says the Israel-Hamas conflict has “hardly any” direct impact on the Philippine economy
(ABS-CBN News 2023). Further, geopolitical tensions like the Russia-Ukraine war could
affect global markets, including oil prices, indirectly affecting the Philippines. Geographical
tensions emphasize the need for supply chain resilience and the potential for biotech
innovations in energy (SDG 7, Affordable and Clean Energy) and health (SDG 3, Good
Health and Well-being) to mitigate the indirect effects of such conflicts (UN 2023). For
biotech firms, especially those reliant on energy-intensive processes or with supply chains
dependent on these regions for critical inputs like fertilizers or feedstocks, there could be
immediate impacts on operational costs and profitability. Over the medium term, companies
might need to diversify their supply chains or invest in energy-efficient technologies to
mitigate these risks.
Why These Events/Phenomena Are Important:
Strategic Planning; International Awareness; These global concerns should
be understood by the strategic planning of a biotech company in order to
succeed if it considers spreading its geographical limits beyond
Singapore. The ways of changing business tactics to cope with such
problems will make assured growth and long-term success.
The demand and the supply, which are globally affected by the events like
these may have a negative impact on the biotechnology. For example,
increased need for technology related to climate resilient agriculture in
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times of crises or conflicts might make new market channels open
up. However, the supply chain might also need to be reshuffled or undergo
a switch of suppliers in order for the disruptions which might occur to be
dealt with in the most creative logistical way.
Contribution 2
Chart 1
Fig 1.
Chart 2
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Chart 3
Chart 4
Empirical Data Analysis
An empirical data analysis was conducted to determine whether there exist any correlation
between the fertiliser usage and crop yield.The dataset was taken from the below link;
https://ourworldindata.org/grapher/cereal-crop-yield-vs-fertilizerapplication?tab=table&time=2021..latest
The year 2020 was particularly selected for the analysis. A correlation coefficient of 0.5811
indicated a positive relationship between the two variables. Considering nitrogen fertiliser
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usage as the independent variable and crop yield as the dependent variable, the result
indicated a significant positive relationship, indicating that an increase in fertiliser usage
leads to an increase in crop yield. The empirical analysis of crop yields and fertilizer usage
indicates a significant positive correlation, as demonstrated by the regression analysis with an
R Square value of 0.3377. This suggests that increased fertilizer usage can lead to higher crop
yields. For our biotech client, this data is invaluable for identifying markets with potential
growth opportunities—regions with lower yields but increasing fertilizer use may be prime
candidates for introducing yield-enhancing biotech products.
Cereals Yield tonnes per hectare
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Crop Yield
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20
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y = 0.0312x + 1.9576
R² = 0.3377
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0
0
50
100
150
200
250
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Nitrogen Fertiliser Usage
Singapore gained its reputation to be one of the leading Asian nations in innovation sphere
and this fact is one of the reasons why Singapore is a key player in biotech development
within ASEAN. Biotechnology raises its hand in extending its impact beyond local borders,
with results in exporting high tech products appearing to be the force for international
business expansion. Through the research and development, Singapore has set the pace, thus
creating advanced solutions to multifaceted problems, like enhancing the agricultural
productivity. This creative spirit is not stifled by the small extent of agricultural land of this
‘little red dot’. Nevertheless, its practicality extends the application of this smart farming
across ASEAN countries. The volatility in which the percentages of high tech exports
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oscillate portrays an aspect of resilience and in this case, an opening for biotech firms in
Singapore to lead the charge in regional agricultural innovations that would lead to food
security.
The high tech exports trend of the Singapore is the direct consequence of the significant
contribution of the country to bioteck scene in ASEAN. The main features of the Singaporean
biotech firms being quality assurance and progress, they are in a good place to lead in areas
of highest demands in terms of technology, such as in gene editing and the way advancement
in agricultural technology is going. In spite of Chinese and US economic instability, the
country’s data shows a stable level of high tech exports, and the country remains as a stable
and forward-thinking force in this region.
Such devotion creates the golden chance for the ASEAN nations looking to apply modern
biotechnological innovations in the agricultural area in order to increase the output and
ensuring Singapore’s glorious role to play in the economic performance of the ASEAN.
Given that the export of high tech goods and the per capita income growth is on the rise in
ASEAN, the enterprise is advised to period the sales within the markets where the technology
adoption and the economic advancement are on the rise, like Philippines and Malaysia.
Involvement in these markets may unfold in forming partnerships for creation of the biotech
unique solutions, which are specifically designed according to the local needs, and may help
the company to better focus on achieving its regional goals, incorporating the progress of
renewable energy and healthcare – two key sectors for ASEAN members.
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Appendix Component
1.Taxes on Company Profit is Increased
An increase in corporate taxes, balanced by increased healthcare spending, presents a mixed
picture in the AD-AS framework. Higher taxes reduce firms’ profitability, potentially
decreasing investment and shifting Aggregate Supply (AS) leftwards. This leads to higher
prices (inflation) and lower output. Conversely, improved healthcare can enhance long-term
productivity, potentially increasing AS over time. However, increased government healthcare
spending can boost Aggregate Demand (AD), mitigating some of the reduced output effects.
Assumptions: Companies can’t fully pass on tax costs to consumers; healthcare investment
yields long-term productivity gains.
Client Impact: Client may face lower profits due to higher taxes. This could affect their
ability to reinvest, hire, or expand. However, improved healthcare infrastructure might benefit
them by creating a healthier workforce over the long run.
Singaporean Economy Impact: The short-term impact leans towards stagflation – higher
prices with slower economic growth. Long-term effects depend on whether healthcare
investment boosts productivity enough to offset the negative supply-side shock from higher
taxes.
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Scenario 2: Global Peace and Met Climate Targets
Scenario 2: Although the tasks of achieving global peace and meeting the
climate goals are truly challenging, we can get closer to them by working
together and applying all available resources, which are the only way to
progress in this direction.
Extending peace to all the nations at all the levels of society and
accomplishing climate goals would undoubtedly lead to the lifting of global
mental awareness. This is reflected in the model by the variations taking
place. Lower political risk creates a stable environment for consumers and
businesses that indirectly increases consumer and business confidence,
which drives up Aggregate Demand (AD) to the right. This excites the
private investors and leads to increased output and employment among the
population. Besides, overcoming the climate change problems will also
reduce the risks to the economic environment that in turn can switch the
Aggregate Supply (AS) curve to the right through leading to technological
changes and higher degree of confidence in sustainable growth.
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Assumptions: Peace in the long run is sustainable; the climate solution also
induce environmental and economic benefits; the general increase in
optimism really means higher investment and expenditure.
Client Impact: The client of yours would be in a more conditioned to be
successful in his environmental business activity. The sales of large
companies may go up in case of higher consumer interest. Looking at the
questions of sustainability may lead them to the brand new market
opportunities and promote their image as a member of the globe’s healthy
planet.
Singaporean Economy Impact: Singapore, having an economy built on the
openness mode, enjoying the situation of increased international trade and
investment exchanges, will be the beneficiary from the guarantee of
optimism and confidence. The significance of green economy may
encourage green innovations within the Singaporean economy and make
the country a welcome place for green businesses thus putting them in a
competitive edge.
Scenario 3: Growing outlays on intellectual property royalties
Higher royalty demands for intellectual property (IP) utilization imply
increased investment and innovation but seen through the lenses of
economic performance, the outcomes are ambiguous. In the AD-AS model,
this goes beyond the remuneration of royalties. It is possible for firms using
this intellectual property to have their output costs rise, thus shifting the
aggregate supply (AS) to the left. This is the reason why prices (inflation)
rise and the output is likely to decline. Alternatively, higher royalty
payments could be viewed as insurance that genius or novelty from the
creator will not be undervalued. This way, it is expected that more and
more research and development will be carried out, which in return will shift
the Lang Run AS in the long-run to the right.
Assumptions: The firms cannot transfer costs completely to consumers
when IP protection noted is enhanced since it positively affects innovation;
the royalty costs should not be an obstruction to companies when they
exploit IP either.
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Client Impact: If the licensor quite depends on licensed IP, and the royalty
payments are expected to be on the rise, it may affect the client’s profits in
a great manner due to higher costs. Nevertheless, the IP holder’s client will
get more benefits than your client by increased royalties as a revenue
source, which in his turn he will use for further investing in innovations.
Singaporean Economy Impact: Whether that turns out to be a negative or a
positive outcome will depend on whether Singapore is a predominant IP
user or an IP developer. In case, the IP use is the major driver of the
growth of the Singaporean firms, the increasing expenses might exert
pressure on efficiency leading to the decline or the stabilization of the
companies’ performance Nevertheless, if Singapore calls it to the powers
to protect itself for the thing, the increase in royalties can be turned into
favor of the situation when people do more R&D, promoting innovation and
making long-term technological progress an advantage that economically
favors the nation.
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References
ABS-CBN News (2023) Israel-Hamas war has ‘hardly any’ impact on Philippine economy:
NEDA, ABS-CBN News, https://news.abs-cbn.com/business/10/13/23/israel-hamas-war-hashardly-any-impact-on-philippine-economyneda#:~:text=Israel%2DHamas%20war%20has%20, accessed 29 February 2024.
Asian Development Bank (2021) Climate Risk Country Profile: Thailand, Asian
Development Bank, https://www.adb.org/publications/climate-risk-country-profile-thailand.
IFPRI Report (2022) 2021 Global food policy report: Transforming food systems after
COVID-19, Ifpri.org, https://www.ifpri.org/publication/2021-global-food-policy-reporttransforming-food-systems-after-covid-19.
United Nations (2023) The 17 Sustainable Development Goals, United Nations,
https://sdgs.un.org/goals.
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