The US has kept its number one spot as the world’s most valuable nation brand, according to the latest Brand Finance Nation Brands ranking for 2016. The US continues to dominate the league table, despite a modest 4% growth, staying at nearly three times the size of China, which comes in second despite China’s strong double digit growth of 12%.
The 2016 Top 10 countries remain the same year on year. Five countries saw value growth and five saw declines, but the actual rankings remained consistent with 2015 — with one exception. Japan leapfrogged the UK to the number four position, with an impressive 18% growth, while the UK saw a slight decline of 2%.Luxembourg was the fastest growing nation brand, increasing its value by a whopping 43% to US $85 billion, putting it in 54th place compared to 58 in 2015. This achievement follows a concerted effort by The Grand Duchy, which has been running a nation brand campaign since 2014.
The worst performers are probably not that surprising; Jordan saw the largest fall in value, followed by Cameroon. Brazil, coming in third place in its Olympic year, can’t be happy with its score; although its rating for tourism did rise by 12%.
The Brand Finance valuation approach is an adaptation of the global brand valuation standard – ISO 10668. It involves combining GDP data with qualitative information elicited from three key pillars: Goods and Services, Investment, and Society. These are further divided into four sub-pillars: Governance, Tourism, Market, People and Skills. These in turn sit above over 160 metrics. Each metric is scored out of 100 and the scores are combined to give an overall Brand Strength Index score for each nation. This score is given a matching letter grade similar to a credit rating on a scale from AAA+ (exceptional) to D (failing). This represents a nation’s brand strength.
A different story emerges when GDP is taken out of the equation and the top 10 are ranked on their nation brand strength alone — perhaps a more accurate reflection? Singapore remained the world’s strongest nation brand, albeit closely followed by Hong Kong and Switzerland. Only the UK and Japan made it into both the top 10 strongest nation brands and the most valuable.
Arguably, the strength of a nation brand is one of the most important assets a country can have in a global marketplace. Research has shown that those countries with a valuable brand tend to attract the most foreign direct investment. A strong nation brand boosts a country’s reputation and image adding value to exports, inspiring tourism and attracting skilled foreign workers. A mismanaged nation brand can inflict severe economic damage.
According to Brand Finance, consumers in new and emerging markets are willing to pay a 7% premium for products tagged as “Made in Britain,” while the Japanese are happy to pay more than double for a Swiss made watch!