Thursday, March 28, 2024
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Canada is World’s 8th Most Valuable Nation Brand

Canada is World’s 8th Most Valuable Nation Brand; COVID-19 Wipes Over US$13 Trillion Off Top Nation Brand Values

SUMMARY:

  • Canada ranks 8th in Brand Finance Nation Brands 2020 ranking, brand value US$1.9 trillion
  • Top 100 nation brands lose US$13.1 trillion of brand value in 2020 as they negotiate devasting COVID-19 pandemic
  • China continues to close gap behind long-standing leader US, brand values US$18.8 trillion and US$23.7 trillion respectively  
  • Top 10 most valuable nation brands contract 14% on average. Japan claims 3rd position as it emerges relatively unscathed from pandemic
  • Ireland is only nation brand in top 20 to record brand value growth, up 11% to US$670 billion, a testament to its resilient economy bolstered by strong exports and consumer spending
  • Emerging as a Southeast Asian haven for manufacturing, Vietnam defies global trend, brand value up an impressive 29%
  • In contrast, Argentina is fastest falling nation brand, its brand value dropping 57%, as COVID-19 cases pass 1 million mark
  • Brand Finance’s Global Soft Power Index data has been included in Brand Strength Index (BSI) for first time, meaning original research on global as well as domestic perceptions of nation brands is now part of Brand Finance’s evaluation methodology
  • A nation admired for its stable leadership, Germany is world’s strongest nation brand, BSI score of 84.9 out of 100

View the full Brand Finance Nation Brands 2020 report here

Canada has retained its position as the 8th most valuable nation brand, following a 13% brand value decrease to US$1.9 trillion. As with other nations globally, Canada has been grappling with the devasting repercussions of the Coronavirus pandemic. The nation’s economy has come to an almost complete standstill for the second time, as the nation braces itself for a second wave of the virus. With Prime Minister Trudeau surviving his third confidence vote recently since his narrow re-election last year, the nation’s politics seem as turbulent as the economy.

Top 100 nation brands lose US$13.1 trillion of brand value

The top 100 most valuable nation brands in the world have suffered a monumental loss to their brand value because of the COVID-19 pandemic, amounting to US$13.1 trillion, according to the latest report by the world’s leading brand valuation consultancy Brand Finance.

2020 has put the nations of the world to the test – from the economic impacts of COVID-19 on nations’ GDP forecasts, inflation rates, and general economic uncertainty, to diminished long term prospects. The Brand Finance Nation Brands 2020 report estimates that the total brand value of the top 100 nation brands dropped from US$98.0 trillion in 2019 to US$84.9 trillion in 2020, with almost every nation feeling a significant impact of the health crisis on their respective economies.

David Haigh, CEO of Brand Finance, commented:

“The downward trend of nearly all the world’s most valuable nation brands is unsurprising given the year we are currently experiencing. With COVID-19 contributing to the recent rise of protectionism, we may see a reversal of the economic growth brought about by globalisation. Having said that, optimism has certainly prevailed, with forecasts looking less dire than initially predicted, and with the announcement of a working vaccine beginning to be rolled out, the future is certainly looking brighter.”  

US & China remain in a league of their own

The US and China remain a cut above the rest, claiming first and second position in this year’s ranking, recording brand values of US$23.7 trillion and US$18.8 trillion respectively. Relations between the two forerunners remain particularly fragile because of the US-China trade war that has consumed both economies over the past few years.

Long-standing leader the US, has recorded a 14% brand value loss to US$23.7 trillion, following yet another turbulent year. Now home to both the most cases and deaths of the virus globally, the world’s largest and strongest economy continues to encounter harsh criticism and questioning on the global stage. With Biden announced as the winner of the 2020 presidential election, in one of the most controversial and polarising races in American history, the country is likely to chart a new course and change many of the policies pursued under the incumbent president.

Despite this political uncertainty, American brands’ sheer dominance and success globally will always provide the nation’s economy and reputation with a strong safety net. American brands – Amazon, Google, Apple, and Microsoft – claimed four out of the top five spots in the year’s Brand Finance Global 500.

Unlike the US, China’s brand value has managed to remain largely stable, recording only a modest 4% drop this year. The Chinese government’s quick response to the COVID-19 outbreak, paired with its targeted stimulus measures in recent months, have resulted in the nation becoming the first major economy to recover from the pandemic and is currently expected to be the only G20 economy that will grow this year.

David Haigh, CEO of Brand Finance, commented:

“We are once again witnessing China inch ever closer behind the US in our ranking of the world’s most valuable nation brands. This year has proven that there is nowhere to hide when it comes to a nation’s economic performance and China has shown its ability to recover at a meteoric pace – providing a beacon of hope that recovery can happen on the global stage too.”

Top 10 down 14% on average

With the pandemic wreaking havoc on nation brand values across the world, the top 10 has recorded a brand value loss of 14% on average. Japan has fared relatively better than its counterparts, recording a modest 6% brand value loss to US$4.3 trillion, and inching up to claim third spot in the ranking. Defying the odds of many that expected the nation to be one of the worst hit at the beginning of the COVID-19 outbreak – due to its proximity to China, its densely populated cities, and burgeoning elderly population – Japan has emerged as relatively successful compared to its counterparts, with lower Coronavirus cases and deaths and with its economy faring better.

Luck of the Irish strikes again

Ireland has bucked the negative trend this year as the only nation brand in the top 20 to record a positive brand value growth, up 11% to US$670 billion. This strong performance is largely attributable to its forecasts being impacted less dramatically than others on the global stage – a particularly positive position given the twin threat of Brexit and COVID-19. The Irish economy has proven to be particularly resilient, being supported by strong exports and continued consumer spending. Should the UK reach a deal on Brexit, Ireland will find itself in an even stronger position as trade disruption with the UK will be reduced.

David Haigh, CEO of Brand Finance, commented:

“The luck of the Irish is at work yet again, as the nation mitigates the risks and limits the impact of both COVID-19 and Brexit. Backed by a vibrant and resilient economy, Ireland’s strong nation brand reinforces the Emerald Isle’s perception as a preferred investment destination even in times of crisis.”

The UK retains 5th position

The UK has retained 5th position, following a 14% brand value decrease to US$3.3 trillion. Despite Brexit being forced into the shadow of COVID-19 this year, the uncertainty surrounding the outcome has persisted. The UK government are still engaged in negotiations with the EU, with fishing rights and competition rules as two sticking points for both sides.

David Haigh, CEO of Brand Finance, commented:

“As the UK enters the final weeks of Brexit negotiations before the transition period deadline at the end of the year, the nation is certainly at a turning point. There is a great opportunity for Britain to become an economy that operates similar to its neighbour, Ireland – with lower taxes and a friendly ecosystem for startups. Should the UK reach a suitable trade deal, Brand Britain could certainly thrive and become the entrepreneurial hub off the coast of Europe as Singapore is in Asia.”

Vietnam defies global trend, up 29%

Vietnam is the fastest-growing nation brand in this year’s ranking, its brand value skyrocketing 29% to US$319 billion. Vietnam, which has recorded staggeringly low COVID-19 cases and deaths, has emerged as one of the top locations within the Southeast Asian region for manufacturing, and has become an increasingly attractive destination for investors – particularly from the US – that are looking to relocate their China operations following the fallout from the US-China trade war. Recent trade deals with the EU are supporting the growth of the nation further.

Do cry for me Argentina

In stark contrast, Argentina has recorded the biggest drop in brand value this year, down 57% to US$175 billion. With COVID-19 cases recently passing the one million mark – the smallest nation by population to do so – Argentina has been struggling to respond effectively to the outbreak. Riots have erupted across the nation with protestors calling for a reform of the justice system, corruption cases to be investigated, and to demonstrate general grievances of the handling of the pandemic. The nation’s already ailing economy is taking further hits and the road to recovery will not be short.

Germany is world’s strongest nation

In addition to measuring nation brand value, Brand Finance also determines the relative strength of nation brands through a balanced scorecard of metrics evaluating brand investment, brand equity, and brand performance. For the first time this year, 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 55,000 people based in more than 100 countries. According to these criteria, Germany is the world’s strongest nation brand with a brand strength score of 84.9 out of 100 and a corresponding AAA rating.

Long renowned for its strong and stable economy and for being particularly well governed, Germany scores well across the majority of our data points. Angela Merkel’s long tenure as Chancellor has provided a stable presence against the backdrop of unstable and erratic counterparts. For the most part, the German government’s and 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.

David Haigh, CEO of Brand Finance, commented:

“Germany remains a beacon of stability both across the continent and globally. As Merkel prepares to step down as Chancellor in 2021 – a position she has held since 2005 – Germany will be hoping that its history of reliable leadership during times of increasing polarisation across Europe will stand it in good stead in the coming year as the nation works towards a post-COVID recovery.”

View the full Brand Finance Nation Brands 2020 report here

ENDS

Note to Editors

Every year, Brand Finance values 5,000 of the world’s biggest brands. The 100 most valuable and strongest nation brands are included in the Brand Finance Nation Brands 2020 ranking.

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.

Additional insights, charts, and more information about the methodology are available in the Brand Finance Nation Brands 2020 report.

Media Contacts

Konrad Jagodzinski
Communications Director
T: +44 (0)2073 899 405
M: +44 (0)7508 304 782
k.jagodzinski@brandfinance.com

Florina Cormack-Loyd
Senior Communications Manager
T: +44 (0)2073 899 444
M: +44 (0)7939 118 932
f.cormackloyd@brandfinance.com

Follow us on Twitter @BrandFinance and LinkedIn, Instagram, and Facebook.

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.

Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.

Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.

Methodology

Brand Finance measures the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism employed to value the world’s largest corporate brands.

Step 1 – Nation Brand Strength

Nation Brand Strength is the part of our analysis most directly and easily influenced by those responsible for their country’s nation brand campaigns. Nation Brand Strength is determined through a balanced scorecard of metrics evaluating brand investment, brand equity, and brand performance. For the first time this year, 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 55,000 people based in more than 100 countries. Each metric is scored out of 100 and together contribute to an overall Brand Strength Index (BSI) score for the nation brand, also out of 100. Based on the score, each Nation Brand is assigned a brand strength rating in a format similar to a credit rating.

Step 2 – Royalty Rate

The hypothetical royalty rate charged is determined by reference to average rates seen across sectors which are applied to the country based on the proportion of the country’s GDP generated from the primary, secondary, and tertiary sectors. The Brand Strength Index is relied upon to determine the appropriate royalty rate for the country.

Step 3 – Revenues

The nation brand valuation is based on forecasts of GDP in each country taken from the World Economic Outlook of the IMF. The applicable royalty rate calculated in Step 2 is applied to the country’s GDP to determine brand-related GDP streams.

Step 4 – Weighted Average Cost of Capital (WACC) or Discount Rate

In order to account for the risk across each national economy a discount rate is calculated. This represents the average cost of a brand’s sources of finance and the minimum return required on the brand asset. The discount rate is used to calculate the present value of future brand earnings (accounting for the time value of money and the associated risk).

Step 5 – Brand Valuation

The post-tax brand-related GDP streams identified in Step 3 are then discounted to a net present value using the discount rate, to determine the nation brand value.

Disclaimer

Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.

The data presented in this study form part of Brand Finance’s proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.

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Matthew Miller
Matthew Miller
Matthew Miller started using mobile devices in 1997 and has been writing news, reviews, and opinion pieces ever since. He is a co-host, with ZDNet's Kevin Tofel, of the MobileTechRoundup podcast and an author of three Wiley Companion series books. Matthew started using mobile devices with a US Robotics Pilot 1000 and has owned more than 200 different devices running Palm, Linux, Symbian, Newton, BlackBerry, iOS, Android, webOS, Windows Mobile, and Windows Phone operating systems. He's a professional engineer by day and a mobile writer by night.