The true damage of COVID-19 to nation brands
By David Haigh, CEO, Brand Finance
The effect of a country’s national image on the brands based there and the economy as a whole is now widely acknowledged. In a global marketplace, nation brand is one of the most important assets of any state, encouraging inward investment, adding value to exports, and attracting tourists and skilled migrants.
For over 15 years, the Brand Finance Nation Brands report has provided key benchmarks for nation brand managers, diplomats, tourism boards, and trade and investment agencies. The study analyses the benefits that a strong nation brand can confer, but also the economic damage that can be wrought by global events and poor nation brand management.
Nation brands put to the test
2020 has been a year like no other, putting the nations of the world to the test – from the impact of COVID-19 on economic activity and immediate GDP forecasts, to diminished long-term prospects. The Brand Finance Nation Brands 2020 report estimates that the total brand value of the top 100 nation brands has dropped by more than US$13 trillion over the past year.
The downward trend of nearly all the world’s most valuable nation brands is not entirely surprising. With COVID-19 contributing to the rise of protectionism, we may see a reversal of the economic growth brought about by globalisation. Nevertheless, with analysts’ forecasts looking less dire than initially predicted, and with a working vaccine in place, the future is certainly looking brighter.
In this year’s study, the US retains its position as the leader among the world’s 100 most valuable nation brands. Second-ranked China is narrowing the gap, as it performs well relative to its counterparts in the top 10. Germany’s nation brand strength comes out on top. A nation renowned for its strong economy and for being particularly well-governed, the Western European powerhouse remains a beacon of stability across the continent and globally.
This year, the Brand Finance Nation Brands study for the first time includes our own original market research into perceptions of nation brands, measured both domestically and internationally, with the data taken from our inaugural Global Soft Power Index 2020.
Brand Finance has created the Global Soft Power Index to provide an all-round view of perceptions of nation brands – their presence, reputation, and impact on the world stage. Understanding those perceptions is key for governments and corporates alike to achieve success internationally, allowing them to identify strengths and weaknesses, and to improve growth strategies going forward. The stronger the nation’s soft power, the greater its ability to attract investments and market its products and services.
COVID-19 winners and losers
Considering the defining impact of the pandemic, we have included a new question in the second wave of the Global Soft Power Index survey, which will be launched at the Global Soft Power Summit on 25th February 2021, focusing on nations’ handling of the COVID-19 crisis in terms of the economy, health and wellbeing, and international aid and cooperation. We asked these questions of over 75,000 respondents from the General Public, and to more than 750 representatives of Specialist Audiences. This metric is not included in the overall Global Soft Power Index score to ensure year-on-year comparability; however, the responses tell a fascinating story.
New Zealand versus the US
Hailed as a global success story in the combat of COVID-19, New Zealand has been rated by the General Public as the country that best handled the pandemic, with a net positive score of 43%. The net positive score is the average of ‘handled it well’ responses minus ‘handled it badly’ responses across the three measures (economy, health and wellbeing, and international aid and cooperation). Prime Minister Jacinda Ardern’s swift response and clarity of communication in handling the crisis has been widely praised by the media and recognised by people the world over.
At the other end of the spectrum, ranking bottom globally, the US has a regretful net positive score of -16% from the General Public responses, certainly a contrast to how strongly the US performs on other metrics in the Global Soft Power Index survey. President Donald Trump’s response to the pandemic has been causing controversy both at home and abroad, with the President repeatedly refusing to acknowledge and act on the severity of the situation. With the most cases and COVID-19-related deaths globally, the world’s largest and strongest economy has encountered harsh criticism and questioning on the global stage.
The stark contrast between the General Public’s perceptions of how New Zealand and the US handled the pandemic, epitomises the two nations’ contrasting visions of the world, spearheaded by almost polar-opposite leaders. On the one hand, we have Ardern’s open, liberal, and compassionate policies versus Trump’s often combative, protectionist, and isolationist approach. With President-Elect Joe Biden getting ready to take the reins of power next year, all eyes will be on him to kickstart recovery across the nation.
Germany’s success recognised by Specialist Audiences
Germany has come out on top as the country that has handled COVID-19 best, according to our Specialist Audiences respondents, with a net positive score of 71%. New Zealand was ranked 3rd by Specialist Audiences with a net positive score of 57%. Compared to the General Public, the Specialist Audiences have understood and recognised the greater challenge that Germany has faced throughout the pandemic, as a nation with a much larger population and shared borders with several other nations, unlike New Zealand.
For the most part, the German government’s and Chancellor Angela Merkel’s response to the pandemic has been received positively both domestically and internationally and the numbers support this with the country recording consistently lower cases per million than any of its Western European counterparts.
Save the date: Global Soft Power Index 2021
The full results of the second wave of the Global Soft Power Index research will be released at the Global Soft Power Summit on 25th February 2021. We will be joined by stellar speakers and panellists, who will discuss the impact of COVID-19 on different nations and explore what the future holds for their soft power.