The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
What comes to mind when you think about Spain or Japan?
Just like anything else, our brains tend to associate certain images and attributes with a given country in order to form a unique mental perception.
In a global marketplace, a country’s national image can be one of its most valued assets or a challenging liability. These perceptions help to forge a country’s reputation, and also have a long-lasting impact on future economic potential and the ability to attract new investment.
INTRODUCING NATION BRANDS
Earlier this week, Brand Finance released its 2018 report in an attempt to place a dollar value on these national perceptions.
While the specific methodology is covered directly in the report, what you need to know is that Brand Finance uses three pillars to calculate a Brand Strength Index score.
The three pillars are:
- Goods & Services: Includes factors such as openness to tourism, market size, and trade rules
- Society: Includes factors such as quality of life, corporate ethics, corruption, and cultural image
- Investment: Includes items such as talent retention, use of technology, R&D, taxation, and regulation
The Brand Index Score is then used to calculate a hypothetical royalty rate, and to forecast revenues to ultimately derive a brand value (post-tax revenues discounted to calculate a net present value).
WHICH NATION BRANDS ARE MOST VALUABLE?
Here are the world’s 15 most valuable nation brands, as ranked in the most recent report.
|Rank||Country||2018 Brand Value||Change (vs. 2017)|
|#1||United States||$25.9 trillion||23%|
|#4||United Kingdom||$3.8 trillion||20%|
|#10||South Korea||$2.0 trillion||8%|
The U.S. takes the top spot at $25.9 trillion, but the fastest growing brand valuation was Germany’s, which jumped 28% over the past year.
HOW THE RANKING HAS CHANGED OVER TIME
Brand valuations can change over time – and looking at Nation Brands over the last eight years helps to get a sense of long-term trends:
By 2012, China had cemented the second place spot, displacing both Japan and Germany.
Meanwhile, Brazil made a brief appearance in the Top 10, but then precipitously dropped off the list. It now sits at 17th place in the 2018 rankings.