Soft power is, according to Brand Finance, “a nation’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics etc.) through attraction or persuasion rather than coercion.” But why does it matter, and how can we measure it? To find out, we caught up with Parul Soni (Associate) and Steve Thomson (Insight Director), authors of the recent white paper on soft power by Brand Finance.
You recently published a white paper on soft power. What inspired you to investigate this topic?
Brand Finance has been conducting an annual Nation Brands study on the world’s most valuable and strongest nation brands for over 15 years. This study has provided key benchmarks for diplomats, tourism boards, trade agencies, nation brand consultants and managers.
Nation branding and soft power are intrinsically linked – a successful nation branding campaign will help create a more favourable and lasting image among the international audience, thus further enhancing a country’s soft power. Therefore, we wanted to explore this relationship and the topic of soft power – in this time of marked change globally, it is arguably more important now than ever!
Soft power has a significant impact on the decisions people, businesses, and governments make. As Joseph Nye, the father of soft power, puts it, it is ‘a means to success’ for those that know how to leverage it.
It is fascinating to see the perceptions that people around the world have about different nations, their strengths and their challenges. In the course of working on the Global Soft Power Index, we have learned a lot about the real powers of persuasion and attraction that different countries possess – as well as seeing who the underperformers are, with potential to raise their game and deliver tangible benefits to national wellbeing.
What do you mean by ‘soft power’?
We conducted an extensive academic literature review, including the pioneering work of Harvard Professor Joseph Nye, and the following summarises our working definition of soft power:
“Soft power: a nation’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics etc.) through attraction or persuasion rather than coercion.”
Which are the benefits of soft power and a strong nation brand?
Soft power delivers all kinds of benefits for nations, their people, businesses, and organisations of all shapes and sizes. A strong nation brand and positive soft power perceptions allow a nation to promote itself as a place for people to visit, invest in, and build a reputation for their quality of goods and services. It allows a country to rise in the esteem of its neighbours, market its resources and compose the face it presents on the international stage.
However, it is often overlooked that a strong nation brand and soft power can deliver better outcomes at home – for example by encouraging domestic tourism, the consumption of domestic goods and services rather than imports, and less tangibly just making people feel better about their country. The benefits are extensive, for both the nation and its citizens, domestically and internationally.
But what specifically can, and should governments and other large organisations do to assess and improve their soft power credentials? The starting point is to use soft power measurement to diagnose a nation’s strengths and weaknesses. This in turn helps governments set priorities to improve global reputation and guide policy strategy.
Benchmarking and accountability are important to ensure soft power projects deliver tangible returns.
Another key application concerns communication and education. In some cases, soft power may be constrained because of poor communication of a nation’s strengths and resources, limiting its potential. However, this is often easily addressed with a communications strategy.
A good understanding of your existing reputation, brand equity, and the misperceptions which need to be corrected is the first step for effective communication and utilisation of a nation’s soft power.
How can we measure soft power?
In our quest to develop the definitive measure of soft power, we built a framework which encompasses all its key dimensions, and used it to gather the data for our Global Soft Power Index.
There are three overall measures which we refer to as ‘Soft Power KPIs’ – important and universal indicators of soft power:
- Familiarity: A hygiene factor – if people know more about your country, its talents, businesses, and resources, then soft power is enhanced.
- Reputation: For a nation to be attractive and a role model for others, its overall reputation must be strong and positive.
- Influence: A direct measure of the perceived presence and impact that your country has in other countries. It is also a way of assessing whether soft power really plays out globally, or whether some nations’ soft power is restricted to certain regions or cultural affiliations.
We have also ascertained 7 specific dimensions, or ‘Soft Power Pillars’. These are the different areas where soft power is exercised, ranging from culture and foreign policy to dimensions such as a nation’s educational and scientific resources, media reach and influence, and a favourable business climate.
Who are currently the soft power champions?
The US leads the rankings with a significant margin. It has high familiarity, strong perceived influence, a largely positive reputation and comes out strong on multiple pillars. Its cultural reach and ‘star quality’ is reflected by the far-reaching global interest in the nation and its people.
Germany is traditionally strong in business and technology. Its leading position in the EU also demonstrates its significant influence in international affairs. The nation’s stability in economy and politics sets a solid foundation for soft power.
United Kingdom’s soft power practice balances multiple metrics. It has a rich culture although not quite comparable to the top-tier tourism destinations; it has a good education system despite never really outperforming in technology. However, its consistently healthy performance on all aspects builds up strong soft power for the nation.
Japan has an excellent reputation, and its strength in leading-edge technology and business demonstrate its significant influence to the world. Its unique culture and excellent governance make Japan a high-ranking soft power nation.
China challenges liberal western democracies with a 5th-place ranking based on high perceived influence. China’s sheer size and increasing confidence on the world stage gives it undoubted influence. Its enthusiastic embrace of capitalism has led to great strength in business and trade as well as education and science.
How relevant is a nation’s soft power for its businesses – as country-of-origin?
Soft power perceptions form a key component in the overall measurement of a nation’s brand strength. While soft power is the ability to influence actors, a nation brand puts that ability into practice.
A mutually beneficial relationship exists for nation brands and the corporates that originate from and associate themselves with that nation. A country’s nation brand facilitates location branding which encompasses nation, region, and city branding through which both local and global businesses strive to create visual, emotional, and perceptual connections with locations in order to market their products and services.
The concept stems from the idea that places evoke strong emotional connections that are highly effective in conveying characteristics and perceptions that are associated with the location. This is evident with German automobile manufacturers that regularly leverage the nation’s reputation in the field to differentiate their cars.
Location branding also creates a symbiotic relationship between nations and corporates where corporate brands act as brand ambassadors for the nation on the world stage. Singapore Airlines, for example, has become an iconic brand ambassador for its home city state. The airlines’ heritage, history, and branding is deeply rooted in the nation’s identity and this is evident in their marketing that frequently features local elements, which can in itself be considered both an advertisement for the airline as well as a tourism campaign for the nation.
A nation’s attractiveness and soft power will impact most brands and businesses – especially those with very clear national origins and associations.
Which are some of your key learnings from putting together the white paper?
There have been several key learnings that we have unearthed since pulling together this white paper and from conducting the study in general. Here are four that we think are interesting to flag:
BRICS: Previously highlighted as five major emerging economies, the nations have – to an extent – underperformed on soft power rankings – especially in the categories of reputation and influence. All five nations have a somewhat mixed reputation internationally and none rank within the top 20.
China ranks 36th on Reputation amongst Specialist Audiences, and 43rd among the General Public, a ranking that is lower than expected for a 5th ranking soft power superpower.
However, although China’s reputation may be mixed, and it would undoubtedly benefit from a more positive reputation internationally, we should not conclude that China is seen negatively around the world. China’s reputation is more positive in some countries than in others, especially Bangladesh, Nigeria, Russia, South Africa, Central & West Africa, and Central America.
Additionally, only 5% of Specialist Audiences think the impact of China’s influence is negative, while that percentage is 16% amongst the General Public – among both groups the consensus is that China’s influence has a mix of positive and negative impact on the rest of the world.
Your View, Our View: Another key theme emerging within the results of our study is the mismatch between global perceptions of a nation and how people of that nation view themselves. This perceptual gap is generally biggest in smaller countries which are not especially familiar to people in other parts of the globe.
Looking at perceptual gaps in more detail can be revealing to identify where a nation may be strong and weak, as understood by people from the country as well as globally.
For example, in the case of the UK, there are generally accepted areas of excellence. Respondents both within the UK and outside of it agree that the UK has a strong and stable economy, a strong educational system and is a great place to visit. On the other hand, they also agree that the UK does not rank as high on ‘Food the World Loves’. The analysis also highlights several key metrics where there is a large perception gap between respondents within the UK and those outside of it. For instance, respondents within the UK believe the nation to be ‘Helpful to Others in Need’ and a ‘Leader in Science’. However, the world views the UK less positively on the same metrics.
Mental Availability and Brand Fame: Our analysis also reveals that two of the key KPIs of Familiarity and Influence are to some extent determined by a country’s size, relevance, and proximity. These are broadly comparable to the concept of mental and physical availability, which are a known driver of commercial brand growth. Brands with strong mental and physical availability have an advantage – they come to mind when considering purchasing or investment options, best practice, sources of advice and guidance and so on.
Some countries have built-in advantages through their size. The US emerges as a leader in terms of mental availability helped by the international reach of its culture, brands, people, and values. The nation’s ‘Brand Fame’ is undeniable, while in more recent times, Donald Trump himself, although not universally popular, remains a source of fascination. The UK also remains a nation of international interest, helped by the English language, its colonial past, as well as through the Royal Family.
In contrast, there are many smaller countries which have to fight to get noticed globally, despite strong reputations. For small countries with no particular strength or ‘USP’ (Unique Selling Proposition), becoming a focus of interest is difficult.
This phenomenon also explains the mid-tier ranking of smaller nations like New Zealand (22nd) and Singapore (20th). A lower overall familiarity means that nations may be less able to demonstrate their strengths.
How does the coronavirus pandemic impact soft power?
As a result of the recent global health crisis and the lockdowns that have followed, changes to our daily lives have had a big impact on how nations exercise soft power.
Looking at the UK for example, a key asset is its leadership in the area of Education as one of the top destinations for studying abroad. It is also a global Culture & Heritage hub helped by the thriving West End, and well-established traditions including the Monarchy and English Premier League which both have a widespread following.
With international travel, educational institutions, hospitality, entertainment, and arts industries forced to shut down, and physical distancing the norm for the foreseeable future, it is unlikely that these arenas will return to their original breadth of exposure any time soon.
We have identified four key pillars that are likely to be the focus of soft power actors during and after the crisis.
The importance of maintaining collaborative relationships for business, tourism, aid, and sharing limited resources including PPE, treatment drugs, and eventually a vaccine is becoming increasingly evident.
Last year, the top ranking nation on perceptions of being ‘Helpful to other countries in need’ was Germany, and their continued successful handling of the virus has allowed them to extend their resources to neighboring countries, allowing patients from France, Netherlands, and Belgium to be flown into German hospitals for treatment, an act that has earned them a lot of praise and is likely to reinforce their position at the top of the ranking next year.
China, 23rd ranking nation on the metric last year, has also adopted an approach dubbed as ‘Mask Diplomacy’ helping other nations during the crisis. China’s aid in the form of shipments of PPE and medical supplies has reached several nations from Italy, Czech Republic, to Serbia. China’s distribution of contextually important resources has been a significant part of China’s foreign policy and may help the nation improve its ranking next year.
Education and Science
The global hunt for a COVID-19 cure and the race to develop a vaccine has taken centerstage.
We would expect nations’ scientific and technical resources to have a big bearing on the success of dealing with the pandemic. The leaders on the Education & Science pillar are all large, advanced nations, though they have different strengths within this pillar.
However, the evidence in 2020 is that science and tech capabilities are not the only factors which determine a nation’s ability to deal with threats such as COVID-19. To some extent it is how you apply these resources, and that is a matter of governance and organisation.
Steady leadership and dependable governance have come into the spotlight and are likely to have a direct effect on perceptions of stability in the nation and which nations are sought out for business, investment, tourism etc.
However, despite being in the top 5 on Education & Science, several nations do not score as well on perceptions of being ‘Politically stable and well governed’. This also mirrors the response to the health crisis that we have seen in the UK and US for example, which already rank relatively low – 16th and 19th respectively – and are likely to fall down the league table next year given the perceived chaos in both countries over the course of the pandemic.
Business and Trade
With global economies in turmoil, investors and businesses are seeking stability in markets that have been able to successfully manage the health crisis.
The top 5 nations on the perceptions of being a ‘Strong and stable economy’ are all projected to decline in economic output over 2020, a significant contraction between 5-7%. It is evident that perceptions of economic stability are likely to dramatically change as several global powers navigate one of the worst recessions in generations.
This is an opportunity for nations like Vietnam, which have handled the crisis well and as a result protected their economies to an extent, to build their soft power in the field. Vietnam ranks 57th on perceptions of having a ‘Strong and stable economy’ but is now one of only a handful of nations with a positive growth forecast for the year by the IMF.
Despite thin resources, it is currently the largest nation without any reported coronavirus-related deaths and less than 400 cases despite being one of the first countries to have been affected and sharing a border with China. Vietnam deployed quick strategic testing, aggressive contact tracing, as well as a highly effective public communication campaign featuring a viral public awareness song. Nevertheless, there has been limited coverage of Vietnam’s success, in contrast to the attention received for instance by New Zealand.
This demonstrates the impact of soft power and poses a key opportunity for Vietnam and other nations that have handled the crisis well.
Vietnam is in the midst of several global changes that are proving to be favourable for the nation. A heightening US-China trade war, and the shifting of manufacturing out of China due to COVID-19 have opened up opportunities for the nation. Soft power can amplify these and further Vietnam’s assets and resources as has been the case for New Zealand, which has been able to benefit from their policy and strategic successes enhanced by their strength in soft power.
If Vietnam is able to build on its soft power, its successes in society, economy, and governance can have a far greater reach and create ripple effects for the nation the same way the soft power superpowers currently enjoy.
About Brand Finance
Brand Finance is the world’s leading independent brand valuation and strategy consultancy, which publishes the Nation Brands report on the top 100 most valuable country brands and the Global Soft Power Index – the world’s most comprehensive research study on perceptions of soft power.
Located in: London, UK and over 20 offices and representatives around the world.
More about the research and advisory services offered by Brand Finance here.
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