Brand Finance, the leading brand valuation and strategy consultancy, has released its annual report on the world’s 100 leading ‘nation brands’. Using a method more usually applied to companies, Brand Finance provides a comprehensive report on the world’s leading nation brands and the impact that a country’s reputation and image has on governments, investors, students and consumers.
Key Findings:
The US is the world’s most valuable nation brand with a $19.3 trillion brand value
Germany is the strongest nation brand, with a score of 75.84 out of 100
Qatar is the fastest growing nation brand; its brand value is up 39% to $256 billion
Ukraine is the fastest faller; its brand value is down 37% to $80bn
The impact of conflict has been felt in Russia too; its brand value is down $90 billion
The Scottish referendum threatened ‘Brand Britain’ but a ‘no’ vote has seen the UK’s nation brand value surge 20% to $2.8 trillion
Brand USA continues its domination of the Brand Finance Nation Brands report. Its $19.3 trillion brand value is more than three times that of second placed China, whose brand value comes in at $6.4 trillion. Though the actions of the US on the international stage are frequently in question and polarisation and deadlock beset domestic politics, decades as the preeminent force in finance, entertainment, democracy and technology means the US should continue to top the ranking for years to come.
GDP data forms a significant part of the calculation of nation brand value, another reason the US, with its huge economy, dominates. However the final figures are calculated by combining the GDP data with more qualitative information drawn from four ‘pillars’; Goods & Services, Tourism, Talent and Investment. The scores for each are combined to create a score out of 100 (and a matching letter grade on a scale from AAA+ to D similar to a credit rating) that represents nation brand strength. Looking at nation brand strength in isolation can in some ways be seen as the truest reflection of a government’s guidance of its nation brand, as the inherent GDP advantage of larger countries is removed.
Germany’s score of 76 (75.84 to be precise) means it has just pulled ahead of neighbour Switzerland, to become the world’s strongest brand. Despite fairly flat growth of late, Germany remains Europe’s powerhouse with an almost unrivalled reputation for quality manufacturing and efficiency. Unemployment is falling and the country’s World Cup win has, to a limited extent at least, generated a positive ‘halo’ effect. In terms of overall nation brand value, Germany sits in third with a brand value of $4.4 trillion.
The UK has enjoyed another surge in nation brand value as economic growth outstrips most other European states and as the GREAT Britain nation brand campaign continues to pay dividends. By far the biggest factor however has been the outcome of the Scottish independence referendum. The growth in the value of Brand Britain has been somewhat muted over the last two or three years in the run up to the referendum. Some investors have been put off by the uncertainty around the result and analysts attached a greater risk premium to the country’s growth. Had Scotland voted yes, the centuries of brand equity built up around the UK Nation Brand would have been lost. Scotland has developed a robust nation brand even within the greater UK, however what was left of the UK would have had a tricky task to stabilise its international reputation and to re-establish a credible identity. The UK total brand value has risen 20% to $2.8 trillion.
Qatar is this year’s fastest growing nation brand. Alleged corruption surrounding its bid for the world cup has focussed attention on Qatar’s social policies and political entanglements. However these reputational issues have by no means overwhelmed the emirate. For the region it is particularly stable and has been afflicted by neither civil war, nor conflict in neighbouring states; a rarity in today’s Middle East. Home grown brands such as Ooreedoo are flourishing internationally, laying the foundations for success beyond the era of liquefied natural gas. Total nation brand value is up 39%, making Qatar this year’s fastest mover.
The falling price of crude oil threatens to play havoc with Russia’s balance of payments and potentially destabilise the Putin government. The invasion of Crimea and support for rebels in Donetsk and Luhansk has alienated many foreign governments, investors and tourists and has led to the imposition of economic sanctions. The combined effect of all these issues has meant Russia has lost its status as an ‘A rated’ nation brand, a new BSI score of 49 gives it a BBB rating. Overall national brand value is also down, from $1.26 trillion to $1.17 trillion, which sees Russia fall behind Italy and into 12th place.
The impact of the conflict on Ukraine has been even greater however. Though a turn towards western values of transparency and democracy has certainly had some impact in improving Ukraine’s reputation in Europe, the US and beyond, continuing instability is a major problem for its nation brand. In losing Crimea, Ukraine has lost not just a significant landmass and economic base, but the better part of its tourist industry. With a continuing war in the east, as sympathetic as western investors would like to be, Ukraine remains a very risky prospect. A perhaps unsurprising consequence is that Ukraine has suffered the most dramatic drop in nation brand value of any country this year; total nation brand value is down 37% to $80 billion.
Brand Finance CEO David Haigh comments, “The states of the 21st century are participants in a global marketplace, with intense competition for tourists, students, the best workers and investment. The results of this year’s Brand Finance Nation Brands report show the advantages that a strong nation brand can confer; the effect of a country’s image on the brands based there and the economy as a whole makes a nation brand the most important asset of any state. Governments, trade bodies and businesses must take steps to ensure that their nation brand is strategically appropriate, well-managed and regularly monitored in order to maximise the benefits.”