Denmark has been named Scandinavia’s strongest nation brand, and ranks 7th globally, according to the latest Brand Finance Nation Brands 2021 report.
Brand Finance determines the relative strength of nation brands through a balanced scorecard of metrics evaluating brand investment, brand equity, and brand performance. The nation brand strength methodology includes the results of the Global Soft Power Index – the world’s most comprehensive research study on nation brand perceptions, surveying opinions of over 75,000 people based in more than 100 countries.
Over the past year, Denmark has climbed one place in the brand strength ranking to 7th with a Brand Strength Index (BSI) score of 80.6 out of 100. Its response to the pandemic was quick and decisive – it was one of the first European countries to close schools and introduce social distancing measures. This resulted in high scores across the board for the perception of how it reacted to the pandemic according to the Global Soft Power Index research.
The Nordic country also ranked highly in the Global Soft Power Index pillars for investment in Business & Trade and Media & Communication, as well as for sustainability. The nation has committed to the creation of two new offshore wind farms and agreed a green strategic partnership with India.
Denmark has also broken into the top 30 in the ranking for brand value, moving up two spots from 32nd to 30th, following a 19% increase in brand value to US$452 billion.
David Haigh, Chairman and CEO, Brand Finance, commented:“Despite being the smallest Scandinavian country, Denmark has shown it packs a punch claiming the title of the region’s strongest brand, as well as the 7th strongest globally. Its focus on sustainability highlights the forward-thinking nature of the country and stands it in great stead for further growth as the green agenda becomes of ever-increasing importance on the global stage.”
Switzerland is world’s strongest nation brand
Switzerland is the world’s strongest nation brand with a Brand Strength Index (BSI) score of 83.3 out of 100.
Switzerland’s BSI score has remained stable, while the nations around it saw theirs take a hit, resulting in Switzerland moving to the top spot for brand strength. According to Brand Finance’s research, the Alpine nation saw external perceptions slightly rise following its strong response to COVID-19. It used a mix of compulsory and non-compulsory measures during the pandemic to control the spread of the virus. For example, non-essential businesses had to close, but the government’s order to stay at home was only ever advisory – entrusting the people to make the decision for themselves.
This is reflective of Switzerland’s model of government, with the public allowed to voice their opinions on laws through frequent referenda – last year the population rejected a motion to end its freedom of movement agreement with the EU and voted to make discrimination on the basis of sexual orientation illegal.
David Haigh, Chairman and CEO, Brand Finance, commented:“Small size is no barrier to occupying a solid position for nation brand strength and Switzerland securing the top spot this year is the perfect example. Switzerland has held firm whilst other nations have faltered over the course of the pandemic. The nation has recently been thrust under the spotlight, however, with the leak of the Pandora Papers, which could taint its reputation as Swiss financial advisers are scrutinised on the global stage.”
Germany slips to 5th
Last year’s strongest nation, Germany, has dropped down to 5th position in the brand strength ranking, following a 2.3 point drop in BSI to 82.6 out of 100. Despite garnering praise on the global stage for her strong and stable leadership spanning 16 years, Angela Merkel sees mixed results on home soil. Domestic perceptions are consistently less favourable across the metrics to their overseas counterparts, particularly in regard to the Global Soft Power Index Business & Trade and Influence pillars.
COVID-19 hurts perceptions of world’s largest economies
At the same time, the UK, US, Japan, and France have all fallen out of the top 10 strongest nation brands ranking due to the perception of how they handled COVID-19.
The UK, falling from 2nd to 14th with a BSI score of 77.4, and France, falling from 9th to 16th with a score of 75.4, recorded average Global Soft Power Index scores for overseas perceptions of their handling of the pandemic, but perceptions domestically were particularly low.
Japan, falling from 7th to 15th with a score of 76.7, saw a similar story with the perception at home that the pandemic was mishandled. However, this is polarised when compared to their perception abroad, where it achieved some of the highest scores in the Global Soft Power Index research.
The US, dropping from 4th to 17th with a score of 75.1, saw poor scores at home and abroad, and was also one of the lowest ranked nations by the specialists.
Despite their brand strength taking a hit, these nations all still feature in an unchanged top 10 when ranked by nation brand value.
David Haigh, Chairman and CEO, Brand Finance:“It will be important for the world’s largest economies to focus on making up the ground they have lost in brand strength, in order to protect their brand value. The UK, US, Japan, and France have all scored poorly domestically for their handling of COVID and they need to rebuild this trust with their respective populations.”
Nation brands begin rebound from COVID-19
The top 100 most valuable nation brands in the world have recorded a 7% increase in brand value since 2020, signalling that recovery is underway from the COVID-19 pandemic, according to the latest Brand Finance Nation Brands 2021 report.
Although this is a positive sign, uncertainty lingers and nation brand values have not reached pre-pandemic levels yet. At US$90.8 trillion, this year’s total brand value of the top 100 ranking is still 7% lower compared to 2019.
David Haigh, CEO, Brand Finance, commented:“Unlike previous economic crashes throughout history, this one is unique. Recovery is uneven and is pinned on the combination of initial COVID-19 response strategies, as well as a successful vaccination rollout. We are starting to turn a corner, however, and witness the green shoots of recovery as the world’s most valuable nation brands begin to return to pre-pandemic brand values. But results are varied, and it may take decades for some to recoup lost brand value, creating even greater disparity between the most and least valuable.”
US & China lead the pack
There has been no movement in the top 10 this year, with each nation retaining its rank from last year. All the top 10 have recorded a modest uplift in brand value this year, in line with the global trend across the ranking.
The United States and China remain in a league of their own, claiming the first and second spot in the ranking, respectively. The US has recorded a 5% brand value increase to US$24.8 trillion in a year that has been marked by great political and economic change with President Joe Biden taking the helm. Similarly, China saw a 6% uptick in nation brand value to US$19.9 trillion. Both nations have celebrated economic recovery since the outbreak of the pandemic, contributing to their uplift in brand value. China’s economy was the first to recover – doing so at a meteoric pace – as the only nation to register positive GDP growth at the end of 2020 and growing at record pace in the first quarter of this year.
Many thought that relations would improve between the two superpowers under Biden’s leadership, following the turbulent Trump years, but this has not been the case thus far with sanctions imposed, restrictions on American investments in China put in place, and a review into the origin of the COVID-19 pandemic ordered.
David Haigh:“The superpowers from the West and the East unsurprisingly dominate the Brand Finance Nation Brands ranking, with China remaining hot on the heels of long-standing leader, the US. With China’s recovery and economic rise showing no signs of slowing down, as growth hit a record high at the beginning of the year, no doubt the gap will continue to close in the coming years.”
Digital Estonia is world’s fastest growing nation brand
Estonia is the world’s fastest growing nation brand, recording a 38% brand value growth to US$39 billion. The Baltic state invested in digital infrastructure long before the COVID-19 pandemic hit the world, with a staggering 99% of the country’s governmental services being online.
The advanced digitisation of the country put it on the front foot during the pandemic. On the same day the government announced a state of emergency, the Estonian Ministry of Economic Affairs and Communications launched an online hackathon to identify solutions to pandemic-induced problems, resulting in a chatbot to answer the public’s queries and the re-purposing of online platforms to match volunteers to those in need. Furthermore, anyone around the world can apply for e-residency in Estonia, which allows them to establish and run and EU-based company completely online.
David Haigh, CEO, Brand Finance, commented:“Estonia is this year’s fastest-growing nation brand, recording an impressive 38% brand value increase, thanks largely to its world-class digital infrastructure in place across the country. With some of the globe’s leading economies having their digital short-fallings highlighted during the pandemic, Estonia’s digital-first model could be one for others to follow.”
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. Brand Finance’s studies provide an all-round view of perceptions and value of nation brands – their presence, reputation, and impact on the world stage.
Understanding the strength and value of nation brands is key for governments and corporates alike to achieve success internationally, allowing to identify strengths and weaknesses and to improve growth strategies going forward.