Globalisation, trade and global companies

Your trainers may have been designed in one country, made in another and sold in a third. Globalisation links places across the world more closely than ever.

Practise this lesson free (6 questions)

What is globalisation?

Globalisation is the growing connection of the world's countries through trade, investment, travel, communications and culture.
Drivers: the shipping container (from the 1950s) made sea transport cheap and fast; cheaper air travel; the internet and mobile phones; and trade agreements that lower taxes on imports.
Countries become interdependent: they rely on each other for goods, jobs and money.

Transnational corporations

A transnational corporation (TNC) is a company that operates in more than one country. Examples include car makers, technology firms and fast-food chains.
TNCs often keep their headquarters and research in high-income countries, and put factories where wages and costs are lower.
A global supply chain links all the steps: raw materials, parts, assembly, shipping and selling. A smartphone may contain parts made in many countries.
For the host countryAdvantagesDisadvantages
Jobs and moneyNew jobs, wages and taxesWages can be low; profits often go abroad
SkillsTraining and new technologyJobs can move away if costs rise
EnvironmentInvestment in infrastructurePollution if rules are weak

Winners and losers

Globalisation has helped some countries grow rich quickly, especially in East Asia, and has made many goods cheaper.
But some places lose out: factories in high-income countries closed as work moved abroad (part of deindustrialisation), and some workers in lower-income countries face long hours and unsafe conditions.
Responses include fair trade, stronger workers' rights and laws on pollution.
Worked example

A TNC has its headquarters in the USA and its factories in Vietnam. Suggest why.

  1. Headquarters need highly skilled staff, research and links to investors, which the USA has.
  2. Factories need lots of workers; wages and costs are lower in Vietnam.
  3. Container shipping makes it cheap to send the products around the world.

Answer: Skilled staff and investors at home, lower costs for manufacturing abroad, and cheap shipping to link them.

Key idea

Globalisation links countries through trade, investment, travel, communications and culture, driven by container shipping, air travel, the internet and trade deals. TNCs work in many countries, often with headquarters in richer countries and factories where costs are lower. It brings jobs and cheaper goods, but also job losses, low wages and pollution.

Quick check

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Extra practice

2 more questions

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  1. Which of these is an example of globalisation?

    1. A village farm selling eggs at the gate
    2. The same coffee chain having shops in many countries
    3. A town council collecting bins
    4. A family growing their own vegetables
    Show the answer

    Answer: The same coffee chain having shops in many countries

    Globalisation links countries through trade and culture.

  2. Which of these is a transnational corporation?

    1. A local bakery
    2. A village shop
    3. A company with factories in China and shops in Europe
    4. A school
    Show the answer

    Answer: A company with factories in China and shops in Europe

    TNCs operate in more than one country.

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Practise this lesson free (6 questions)All KS3 Geography lessons

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Sources and references

Checked by the GCSE-ready editorial team, 23 October 2026. Last updated 2 October 2026. Spotted a mistake? Tell us and we will fix it.