December 6, 2013,
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Hard on the heels of the Chancellor’s Autumn Statement comes some welcome news!
Brand Britain is now worth USD 2.3 trillion (GBP 1.4 trillion) to become the world’s fourth most-valuable nation brand, having pushed Japan into fifth place according to new research by Brand Finance, a leading brand valuation consultancy that’s just published the 2013 edition of its Nation Brands report.
Using an analysis more usually applied to companies, the report provides a comprehensive look at the world’s leading nation brands and the impact that a country’s reputation and image has on governments, investors, students and consumers.
The top 10 most valuable nation brands in the world (2013):
1. US = USD 18 trillion
2. China = USD 6.1 trillion
3. Germany = USD 4.0 trillion
4. UK = USD 2.3 trillion
5. Japan = USD 2.2 trillion
6. France = USD 1.9 trillion
7. Canada = USD 1.8 trillion
8. Brazil = USD 1.4 trillion
9. India = USD 1.3 trillion
10. Australia = USD 1.2 trillion
How it works
Each nation brand is assigned a rating between AAA (very strong) to DDD (failing) in a format similar to a credit
rating. This letter grade is the result of Brand Finance’s Brand Strength Index (BSI); a measure based on scores in the Nation Brand Impact™ Framework segments of Investment, Tourism, Product, Talent and a general segment. These segments are categorised as inputs, through puts and outputs each worth 33% of the overall BSI. Inputs are factors that can be directly controlled by the nation, through puts are factors of internal and external reputation and outputs are measures of current performance. The BSI is based on factors such as the quality of a country’ s workforce and ability to attract foreign talent, perceptions of its quality of life, and its projected GDP growth. Brand Finance uses a combination of government statistics, consensus forecasts, and analyst projections to quantify these variables and create an overall brand rating.
Nation Brands are also quantified by total value using a royalty relief method that quantifies the royalty that would be payable for a brand’ s use if it were controlled by a third party. The royalty rate is precisely calculated based on different sectors of the economy, and then applied to projected GDP over the next five years. A discount rate is then applied to this total to account for the time value of money and associated risk. This result quantifies the value that the brand brings to the economy. The BrandFinance Nation Brands measures the strength and value of the nation brands of leading countries using a method based on the royalty relief mechanism that Brand Finance uses to value the world’s largest companies.
The report provides each nation brand with a measure of its brand strength and a valuation of its brand value.
The UK benefited from last year’s high profile events – the London 2012 Olympic and Paralympic Games, HM Queen Elizabeth II Diamond Jubilee and also from the hugely successful “Britain is GREAT” campaign.
“GREAT is a fantastic example of an innovative marketing campaign,” adds Maria Miller, Secretary of State for Culture, Media and Sport.
“Britain already has a very strong brand and GREAT leverages this to drive our international marketing efforts. It is a hugely successful initiative that brings together Government departments, businesses and cultural organisations in order to drive real economic growth for this country.”
According to researchers, the increase in brand values delivered by the GREAT campaign could be reversed at the Scottish independence referendum in 2014. They argue that the uncertainty surrounding the result is already affecting investor confidence, and a ‘Yes’ vote in September 2014 could spell the end of Britain as a political entity, forcing a profound reappraisal of national identity and re-branding of the two independent nations. As a result millions in nation brand value could be lost.
“The combined nation brand values for an independent Scotland and England are likely to be substantially lower than that of a united UK, in the medium term at the very least. We calculate that strong nation branding can add between 1 per cent and 5 per cent to GNP. In the current economic environment no sensible government can afford to ignore branding as an instrument of economic policy,” concludes CEO of Brand Finance David Haigh.
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