Brand Finance has released its annual report on the world’s 100 leading ‘nation brands’, with UAE the world’s third most powerful nation brand, behind Singapore and Switzerland.
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. The aim is to improve country’s standing, as the image and reputation of a nation can dramatically influence its success in attracting investment capital, in exports, in talented and creative workforce, tourism and in its cultural and political influence in the world.
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United Arab Emirates soaring new heights
In the recent years, UAE has progressed to the strongest, most valuable, and fastest-growing nation brand in the Middle East. The country’s nation brand value has grown 24% year on year to US$594 billion. The UAE is also the world’s third most powerful nation brand, with a Brand Strength Index score of 88.8, coming behind only Singapore and Switzerland.
“The UAE’s outstanding performance can be attributed to the diversification of its economy and the ability to mitigate risk. The lower reliance on oil and higher emphasis on tourism have both undoubtedly played a vital role. What is more, the country is improving its scores in brand strength metrics within the fields of judicial system efficiency, reliability of police services, and ethical behaviour of firms.” commented Andrew Campbell, Managing Director, Brand Finance Middle East.
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Campbell added that growth is likely to come from countries that successfully manage to transform their economies and decrease their dependence on oil. Improving social welfare is also another key point to future brand value growth. At the same time, the Middle east must also satisfy China with a steady flow of commodities thereby, having a mutually beneficial relationship with the Middle East.
The rise of the Superpower
According to the Brand Finance Nation Brands study, China is the fastest-growing nation brand of 2017 in absolute terms, with a change of over US$3.1 trillion year on year. This figure is equal to the entire nation brand value of Britain, which illustrates just by how much China is outpacing other countries.
The forthcoming 19th National Congress of the Communist Party of China will mark the end of the Central Committee’s five-year term which has seen a revolutionary change in China’s approach to brands. In a virtuous circle, Chinese brands and the transformed national image of China as an emerging global power are reinforcing each other and further add to the country’s attractiveness to investors and tourists.
The US meltdown
With a value of US$21.1 trillion, the United States remains the most valuable nation brand in the world but the meagre growth of 2% year on year is putting its dominance at risk in the long run.The United States’ nation brand value’s stagnation can be attributed to macroeconomic challenges which has ultimately contributing to a slow pace of GDP growth compared to previous expansions.
Trump’s administration is seen as increasingly unpredictable and although tax relief promises can boost FDI in the short run, a failure to fulfil them, considering that many propositions of new legislation fell through in Congress, will make investors’ confidence disappear.
America’s image in the world is also dwindling. Closing borders to migrants and refugees, and breaching global commitments in relation to climate change, have all seriously undermined the United States’ global leadership.
The ascent of the Silk Route
The world has witnessed a Western stagnation and an Asian advance. Established European nation brands, such as Germany, Netherlands, Belgium, Switzerland, Sweden, Austria, record either a decline or a negligible growth of value. This is in contrast to the Asian nation brands that are growing at breakneck speed. Vietnam, the Philippines, Thailand and South Korea have all added between 37%-43% to their nation brand value.
Southern Europe’s growing pace
Southern European countries boast record nation brand value growth year on year. Infamously branded as ‘PIGS’ during the Eurozone Crisis, Portugal (up 22%), Italy (up 34%), Greece (up 41%), and Spain (up 46%), as well as smaller Cyprus (up 57%), have since all introduced necessary reforms and regained the confidence of analysts and investors.
Brand Britain shows resilience
The Brexit process has not yet brought the widely expected negative consequences. Although uncertainty has caused a slight drop in the UK’s brand strength, from a score of 86 to 85, brand value is up 6% year on year to US$3.1 trillion. Britain should now engage with the world, especially booming Asian markets, to sustain growth and dispel negative perceptions.
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Iceland: Let the money flow, winter is coming!
Iceland is the fastest growing nation brand of 2017, up 83% from last year. The country’s tourism industry is booming and expanding its share of GDP at the expense of the traditionally dominant fishing sector. Thanks to the hit television show, Game of Thrones, which films most of its winter scenes in Iceland, the country has seen a record 1.8 million foreign visitors in 2016, up 40% from 2015. The increase in visitors brings great financial benefits to the nation. Tourists spent US$212 million in 2016, using credit and debit cards alone, and as the number of visitors is forecasted to increase, so will the injection of money.
Promising Future for Singapore
Singapore has not only maintained its position as the strongest nation brand this year, but with a Brand Strength Index (BSI) of 92.9, it is also the only one to score over 90. The SkillsFuture movement initiated by the government, which allows every Singaporean aged 25 and above to secure S$500 for professional development, helps to maximise the nation’s potential. More than 400,000 people undertook training in 2016, an increase from 379,000 in 2015. The state’s willingness to invest in the development of its people demonstrates a nurturing element that many other nations have yet to adopt.