Having once worked for a research firm, I know how easy it is, faced with a deadline and dizzy with caffeine, to look at some pretty meaningless numbers and come up with a finding.
Journalists with column inches to fill can, one quickly discovers, be relied on to pick these febrile findings up and run with them. Thus, they become facts.
I do not wish to suggest that this is how Brand Finance developed its nation brand ratings, whose most recent iteration was released in December 2013. I do, however, question the methodology and conclusions.
My first area of distress is the way the ratings are expressed.
“Each Nation Brand is assigned a rating between AAA (very strong) to DDD (failing) in a format similar to a credit rating,” says the Brand Finance Nation Brands report. Is that a good idea? Shouldn’t we save credit rating-like ratings for credit ratings? Wouldn’t it be better to use something different? Gold stars, little flags, the Chinese character for big happiness?
Then there is the way the ratings are calculated. “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,” says the report.
The BSI (I’m going with Brand Finance’s abbreviation and resisting the temptation to call it the BS index) is based on factors such as the quality of a country’s workforce, its 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.
I have two problems with this. First, who believes government statistics? Second, it all seems to be about money. Nowhere in the report is there mention of trivia as human rights and political freedom. This helps to explain how Singapore can have the second highest brand rating in the world (down from first last year) and China the world’s second highest of $6,109 billion.
For as well as a brand rating, countries have a brand value. This is quantified using the “royalty relief” method – a measure of the amount a third party would have to pay to use the brand. (If you can’t afford China, how about Albania, a snip at $8 billion?)
Being based in London, Brand Finance is excited that the UK’s brand value has increased by 8% taking it to fourth position behind – quite far behind, it must be said – Germany. It attributes this in part to the Olympics, the monarch’s diamond jubilee and the government’s GREAT Britain marketing campaign.
Never mind that part of the UK is not in Great Britain, but – famously – in Ireland towards the north, it’s all GREAT stuff, though under threat from another bunch of pesky Celts: the Scots. Were Scottish independence to come to pass, “the nation brand value built up over centuries and in the last few years so successfully fostered by the government’s GREAT Britain campaign would be squandered”, says David Haigh, chief executive officer of Brand Finance.
Examples of how wrong it could all go for Pretty Good Britain, as an American friend of mine used to call it, can be found in the nation brands table. Hungary, an Austro-Hungarian Empire escapee, languishes in 53rd place, while Georgia, birthplace of Stalin and a one-time republic of the USSR, flounders in 92nd (up from 99th though).
But there is a disturbing lesson concealed in the figures that affects every one of us Europeans from Newcastle to Naples, from Lisbon to Lublin. Europe’s combined brand value (based on a straight totting up of EU and Efta countries in the top 100 nation brands) is $16,124 billion. This leaves us $1,866 billion behind the Americans.
Can you believe it? All those centuries of history, mes amis, and we are still behind the new world upstarts in the recently founded (69 years after the United Kingdom to be precise) US of A. Comrades, I exhort you: please try harder.
Fiona Rintoul is editorial director at Funds Europe
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