Globalization is the most popularmechanism in today’s world economy. Globalization referred to a process by whichmerge an individual national economy into an interdependent and integratedglobal economic system. The whole world is becoming a small village due to theglobalization process. The development in transportation and telecommunicationstechnology brings a world in which barriers to cross-border trade andinvestment are declining and perceived distance is shrinking.
Martin and Sunley (1997)identified Globalization as a “notion of economic activity that enables a freeflow of capital, trade and information not constrained by national boundaries”(p. 4). Globalization implies integration of economies and societies across theglobe with the assist of technology, trade and capital.
It refers to a processthat enables people to access goods, information, norms, practices andinstitutions of other countries through markets, technologies, interests andinformation flows.Globalization is characterized byfour types of changes. First, it stretches the social, political and economicactivities across different regions and continents. Second, it is distinct bythe rising status of interconnectedness of trade, investment, finance, migration,culture, etc. Third, it creates global interactions and processes betweendifferent countries.
And fourth, the effects of globalization can be highlysignificant elsewhere and specific local developments can have considerableglobal consequences. Thus, the boundaries between domestic and global affairsbecome increasingly smooth.Globalization is the widening,intensifying and growing impact of worldwide interconnectedness.
It causes anexpansion in the volume and variety of cross border transactions in goods andservices. It has economic, political and cultural dimensions, all of which canhave an economic impact. The different dimensions of the process areinterrelated and mutually emphasizing. There are significant potential benefitsof globalization. Openness to foreign direct investment (FDI) can contribute togrowth by stimulating domestic investment, improving efficiency andproductivity, or by increasing the knowledge applied to production. Increasedaccess to the domestic financial system by foreign banks may raise theefficiency of the banking process thereby lowering the cost of investment andraising growth rates.
Trade openness may facilitate the acquisition of newinputs, less expensive or higher-quality intermediate goods and improvedtechnologies that enhance the overall productivity of the economy. Equally, the process ofglobalization involves significant risks and potentially large economic andsocial challenges, particularly to the developing countries. Openness to globalcapital markets has brought greater impulsiveness in domestic financialmarkets, particularly in countries whose financial systems were weak to beginwith and whose economic policies lacked credibility. Similarly, tradeliberalization has led in some countries to reduced demand for unskilled labor,lower real wages, job losses and income declines which have often resulted inhigher poverty rates. As a result, there have been growing concerns about thenegative effects of globalization.
It isvery clear that the phenomenon of globalization has come to stay. In fact,globalization has been described as a fast-moving train that waits for nobody. Intendedpassengers either jump onto it or risk of being left behind. Like everyjourney, every passenger must be prepared to board at the right station, withthe necessary kits and with a clear knowledge or vision of his destination.There are obvious indications that Bangladesh is ill prepared to start thisjourney and cope with the developments. Apart from the fact that mostdeveloping countries lack the basic infrastructure to board onindustrialization drives, the inability to make sound economic policies,unpredictability of changes in laws and pervasive corruption are criticalobstacles to development.
Therefore, one of the greatest challenges faced byBangladesh in this century is how to strengthen its participation in the globaleconomy in a manner that will bring widespread and sustainable benefits to itspeople. Motivation and Significance of the Research The motivation that I havefor this research is based on the fact that I am a Bangladeshi who has seen andexperienced the impacts of globalization phenomenon on business sectors ofBangladesh. I take great interest in globalization issues and because of myinterest; personally, I could see the views of other countries regardingglobalization and its use in economic development. I have also marked how thesecountries use globalization to their advantage. Having compared thesocio-political and economic environment of Bangladesh and the countriesvisited, I am now in a position to understand the likely effects ofglobalization on the business sectors of Bangladesh. I would like to take thisopportunity to do the research based on my experience and understanding of thesubject from my reading.