COUNTRIES INTANGIBLE WEALTH, A COMPETITIVE ADVANTAGE IN GLOBALISATION?

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1 COUNTRIES INTANGIBLE WEALTH, A COMPETITIVE ADVANTAGE IN GLOBALISATION? W, Havas Design, HEC Paris, Ernst & Young and Cap present a unique ranking of countries: (Survey undertaken by the Harris Interactive Institute) TM The NATI N GOODWILL OBSERVER seeks to evaluate the intangible capital of 26 of the world s most important countries. Designed by W, Havas Design, HEC Paris, Ernst & Young and Cap, this survey was undertaken amongst a panel of 1000 international economic leaders and leaders of opinion 1 with regard to: -their perception of the current image, the instantaneous image of countries, -the ability of these countries to benefit from globalisation. Based on the results of the survey, W, Havas Design, HEC Paris, Ernst & Young and Cap drew out the notion of Nation Goodwill which aims to analyse the strengths and weaknesses of the intangible capital and brand capital of a country. COUNTRY RANKING ACCORDING TO THE NATI N GOODWILL OBSERVER 1 ST RANKING: THE INSTANTANEOUS IMAGE OF COUNTRIES. INTERNATIONAL LEADERS DREW OUT FOUR DISTINCT GROUPS: At the top, the group made up of 6 privileged image countries. Germany (88% positive image) comes out in first place worldwide, the result of European leadership, a serene power in the world and a continent in crisis. Then come Canada (87%), Sweden (86%), Switzerland (86%), Australia (85%) and the United Kingdom (84%). These nations are characterised by the clear positioning of their model, and an image that combines quality and performance, stabilised demography and an environment at peace. 1 Method: Survey carried out in 15 countries by the Harris Interactive Institute, from 27 th June to 30 th July 2012, amongst a purposive sample of 1,000 international economic leaders and leaders of opinion.

2 The second group belongs to the fragilized powers : former economic masters of the 19 th and 20 th centuries, but also those European nations that have been the worst hit by the economic and financial crisis. France (80%), Japan (78%), the USA (77%), Italy (75%) and Spain (75%) belong to this group. The third section of the ranking corresponds to the new powers : emerging countries and countries that emerged from the globalisation of the beginning of the 21 st century, spread over most of the continents. Specifically Brazil (63%), South Korea (52%), South Africa (50%), and India (45%) belong to this group. Finally, a fourth group corresponds to countries with emerging images : these are nations that promote their demographic and natural resources, as well as their ambitions for political and strategic recognition, such as Mexico (39%), Egypt (33 %) and Nigeria (16%). By comparing this ranking to the great international reference rankings 2, the study shows that there exists a strong correlation between a country s instantaneous image, as perceived by international leaders and its objective assets, as measured by these rankings: THE INSTANTANEOUS IMAGE OF A NATION IS INDEED DIRECTLY LINKED TO ITS OBJECTIVE ASSETS. A country s image is extensively correlated to its objective, measurable assets. The correlation is very strong. INSTANTANEOUS IMAGE NIGERIA MOROCCO INDONESIA EGYPT INDIA RUSSIA BRAZIL ARGENTINA TURKEY CHINA MEXICO SOUTH AFRICA SAUDI ARABIA ITALY POLAND SPAIN GERMANY CANADA SWEDEN SWITZERLAND AUSTRALIA UNITED KINGDOM FRANCE JAPAN UNITED STATES SOUTH KOREA A country s image is based on its objective performance in a certain number of areas (the economy, competitiveness, entrepreneurial ecosystem, innovation, policy and freedoms, human development, etc.). It is noted, however, that some countries enjoy an image that is greater than their objective assets (Brazil, Argentina, India) whereas others suffer from an image that is beneath their objective assets (USA, South Korea, Mexico, Saudi Arabia). POSITION IN INTERNATIONAL RANKINGS 2 International rankings used for this analysis: Ease of Doing business 2012 (The World Bank), Index of Economic Freedom 2012 (The Heritage Foundation), The Global Competitiveness Index (World Economic Freedom 2012), Global Innovation Index (The Economist Intelligence Unit), The Global Innovation Index 2011 (Insead), Corruption perceptions Index 2011 (Transparency International), Democracy Index 2011 (The Economist Intelligence Unit), Press Freedom Index (Reporters sans frontières), Quality of Life Index 2011 (International Living), Human Development Index 2011 (UNDP), Globalization Index 2012 (Ernst & Young).

3 2 ND RANKING: THE ABILITY OF COUNTRIES TO BENEFIT FROM GLOBALISATION COMPARED TO THEIR INSTANTANEOUS IMAGE. Asia would appear to benefit the most from globalisation. China (80%), in the first place, as well as India (77%) and South Korea (74%) are perceived to be the most promising countries within this dynamic. These three countries make an impressive leap compared to the instantaneous image ranking, which can be explained by the fact that they live globalisation culturally. Brazil also does well in this respect, in terms of global image and the role it plays in globalisation (63%). With regard to the mature economies, Australia (74%) and Germany (73%) appear to be best placed to take advantage of globalisation. On the contrary, Latin countries such as France (61%), Italy (57%) and Spain (55%) raise some doubts regarding their ability to take advantage of globalisation. Other countries have the objective potential to benefit from globalisation, but they must further affirm their image. This is the case for Russia (67%), Saudi Arabia (57%) and Mexico (61%). Finally some countries, such as Morocco (54%), Nigeria (48%) and Egypt (48%) have yet to convince international leaders of their ability to take advantage of globalisation. The study shows that there is no correlation between the instantaneous image of a country and its ability to take advantage of globalisation, as demonstrated in the following graph, which highlights 4 groups, The Performers, The Latins, The Top Emerging and The Next Generation : FROM INSTANTANEOUS IMAGE TO PROJECTED IMAGE PROJECTED IMAGE 3 4 RUSSIA TURKEY SOUTH AFRICA SAUDI ARABIA CHINA INDIA INDONESIA MEXICO MOROCCO SOUTH KOREA ARGENTINA POLAND BRAZIL JAPAN UNITED STATES AUSTRALIA ITALY SPAIN SWEDEN SWITZERLAND UNITED KINGDOM FRANCE 1 GERMANY CANADA 2 1: The Performers Positive coherence between the two axes. Very good instantaneous image coupled with solid rooting in globalisation. 2: The Latins A split between the two axes. A favourable image but countries judged to be insolvent within globalisation. 3. The Top Emerging Good projected image, countries perceived as winners in globalisation, but instantaneous image to be affirmed. NIGERIA EGYPT INSTANTANEOUS IMAGE 4. The Next Generation Instantaneous image to be built up or affirmed and projected image to be demonstrated.

4 3 RD RANKING: LEADERS OF OPINION AWARD DIFFERENT PRIZES DEPENDING ON THE IMAGE COMPONENTS USED. The NATI N GOODWILL OBSERVER analysed 5 specific country image components: stability, economic performance, innovation, cultural and artistic creativity, the environment and the quality of life. STABILITY Switzerland (91%), with Canada (91%) and Sweden (89%), come out as the most stable countries in institutional, judicial and fiscal terms. France comes eighth (79%) and Italy fourteenth (50%). ECONOMIC PERFORMANCE Germany (91%), Switzerland (88%) and Canada (88%) dominate this category. France is tenth (72%) ahead of Korea and Brazil but behind China and the United Kingdom. INNOVATION The USA (91%), Germany (90%) and Japan (90%) are perceived by leaders of opinion to be the most innovative countries. Sweden and Canada are just behind. France comes ninth (73%). CULTURAL AND ARTISTIC CREATIVITY France (87%), Italy (87%) and Spain (82%), the three Latin countries lead the way in this category, just ahead of the United Kingdom, Japan and the USA. ENVIRONMENT AND QUALITY OF LIFE Sweden (92%), Switzerland (90%) and Canada (89%) are seen as the best countries to live in! Australia and France are just behind (respectively fifth and sixth). THE CONCEPT OF GOODWILL The study s results enable us to define the concept of Nation Goodwill, a nation s true intangible capital. This is built up around two axes: The instantaneous image of the country, based on its economic performance, its potential for innovation, its attractiveness, its human development, etc. The study shows that this instantaneous image is based on a nation s concrete and objective assets. The projected image, based on its perceived ability to project itself into globalisation and draw benefit from it. This is the dynamic image sent out by a nation, its ability to open up to the world in the future. The NATI N GOODWILL OBSERVER shows that in the heart of globalisation all countries must question the values they offer. We hope that the country goodwill, only indicator that represents a synthesis between the tangible and the intangible, will enable each country to draw up a fair inventory of its perceived value and implement the means of action adapted to its own particular assets, say the partners of the NATI N GOODWILL OBSERVER.

5 WHAT MEANS OF ACTION TO PROMOTE COUNTRY GOODWILL? Through this study, economic leaders and leaders of opinion highlight two complementary levers by which to increase a country s goodwill and define the strength of a country s image: -Act on a country s instantaneous image to promote its concrete assets, which are factors within the attractiveness and competitiveness of the country -Act on the country s ability to benefit from globalisation in order to give itself a dynamic, open image in the world. The first lever, the instantaneous image, is formed from objective and measurable factors, such as entrepreneurship, innovation, political stability and economic performance. Countries can take action on these elements to improve their instantaneous image. The projected image, the second axis within goodwill, answers to other means of action. Based on more subjective elements, this image is beyond the classic components of the instantaneous image (low correlation between the instantaneous image and the perceived ability to take advantage from globalisation). Educational, cultural and sporting influence, along with that of cities and businesses, are amongst the new means of action and, for leaders, act as high added value intangible image levers. PRESS CONTACTS AND REQUESTS FOR INFORMATION: PROFILE PR 33 (0) (0) Mendrika Rabenjamina mrabenjamina@profilepr.fr Jean-Philippe Lecocq jplecocq@profilepr.fr TV-radios : Sonia Menhane smenhane@profile.fr 33 (0) (6)