Economic Trends Nation Brand in 2012 LEE Dong-Hun Research Fellow Samsung Economic Research Institute Weekly Insight I. Nation Brand Survey Results The international community has undergone drastic changes since the global financial crisis and is seeking out new paradigms. Although the conventional measures of national power, including military and economic strength, and population and territory size, remain important in international relations, there is an increasing consensus on the importance of soft power, in particular, nation brand. A concept adopted from marketing, nation brand involves how a nation is perceived by people from other countries, and constitutes the degree of favorable sentiment and trust regarding a country. Beginning in 2009, Samsung Economic Research Institute (SERI) began an annual study of the nation brands of 50 countries, including, formulating an index called SERI-PCNB NBDO. 1 In 2012, SERI surveyed 13,500 opinion leaders in 26 countries from October 20 to November 19 and analyzed the most recent statistics of the year. remained No. 1 in substance, while other countries in the top 10 remained the same, changing only their order. Compared to the 2011 results, the nudged up by one place to No. 4, while fell one place to No. 5. In image, the was ranked No. 1 for the first time, 1 SERI-PCNB NBDO is a nation brand index model, Nation Brand Dual Octagon (NBDO), jointly developed by Samsung Economic Research Institute (SERI) and Presidential Council on Nation Branding (PCNB). Dual presents substance and image, while Octagon is made up of eight categories (economy/corporations, science/ technology, infrastructure, policies/institutions, heritage, modern, people and celebrities. SERI-PCNB NBDO Nation Brand Rankings Ranks in 2012 SERI-PCNB NBDO Key Competitive Indexes Image IMD WEF NBI Country 11 10 Country 11 10 Country 11 Country 11 Country 11 1 1 1 3 4 Hong Kong 1 1 1 2 2 2 2 1 1 Singapore 2 2 3 3 4 5 5 5 4 3 4 5 3 1 3 Singapore 3 3 4 5 4 5 9 6 4 7 6 6 6 6 7 8 7 6 5 7 7 7 4 2 Taiwan 6 5 7 8 8 8 6 7 13 10 9 9 10 10 8 10 10 Hong Kong 11 8 10 9 9 11 11 Qatar 8 9 10 15 18 (17) 19 19 (22) 22 (19) 24 (N.A.) 27 8
Jan. 28, 2013 Rankings Ranks in 2012 Overall Economy/ Science/ corporations technology Policy/ institution 1 Singapore 2 Ireland 3 Luxembourg Russia 4 Austria 5 (12) 6 7 8 Iceland Brazil Iceland 9 10 Luxembourg (12) Belgium Mexico Portugal 13 (15) 15-21 (21) 24 (22) 29 (33) - 35 (31) - Note: Figures in parentheses are 2011 rankings. while the rose to 10th place for the first time. rose from 9th place in 2011 to 5th place, while the rose from 5th place to 3rd. on the other hand fell from 1st to 5th. Austria, which was 10th in 2011, dropped out of the top 10. II. Status of 's Nation Brand ranked 13th in overall substance and 17th in overall image in SERI s 2012 survey of nation brands. Both were improvements from 2011. Image was particularly noteworthy after being flat the previous two years. It was propelled in part to rapper Psy s Gangnam Style, which became the most watched video in the world. ranked in the top 10 substance rankings of science/technology (6th), modern (8th) and celebrities (7th). In heritage, rose from 33rd to 29th among the surveyed countries but fell in the economy/ corporations, policies/institutions, and people categories. remained unchanged. In image rankings, economy/corporations broke into the top 10 for the first time, continuing a steady rise from 15th when the survey began in 2009. Science/ technology also was in the top 10, where it has always been (9th in 2009, 10th in 2010 and 9th in 2011). III. Value Changes in Nation Brand The benchmark of the survey is the OECD countries average (OECD average=100). s substance and image indices were 103 and 101, respectively, maintaining an uninterrupted climb since the survey began. 2 In image, the 2012 advance was most influenced by "Gangnam Style," which became the most watched video YouTube in only five months, with more than one billion viewings worldwide; surging sales of Samsung Electronics' Galaxy S smartphone series, which became a market leader; and 's successful hosting of the Nuclear Security Summit. In substance, the upward trend was accompanied 2 rankings: 97 (2009), 99 (2010), 101 (2011). Image rankings: 89 (2009), 93 (2010), 97 (2011). Samsung Economic Research Institute 9
Economic Trends Image Rankings Ranks in 2012 1 2 3 4 5 6 7 8 9 10 Overall 17 (19) Economy/ Science/ corporations technology UAE (18) (12) - - Note: Figures in parentheses are 2011 rankings. 18 (19) Policies/ institutions 20 (22) Greece Egypt (16) Ireland Mexico 31 (32) 18 (20) (12) 19 (19) Russia Greece 20 (26) by outstanding performances at the London Olympic Games; upgrade of the nation's credit rating by the three major credit rating agencies (Moody's Investors Service, Fitch Ratings and Standard and Poor's); and the movie Pieta receiving a Golden Lion award in Venice International Film Festival. 1. and infrastructure become new pillars of s nation brand Since the inception of the brand survey, economy/corporations and science/technology have exceeded the OECD average of 100 points in both substance and image and celebrities and modern have topped the average in substance only. Meanwhile, policies/institutions, heritage and people have scored below the OECD average. The key takeaway in overall image is how infrastructure is combining with modern to be new pillars in branding. image has been rising steadily and in 2012 exceeded the OECD average for the first time since the survey began. Meanwhile, modern, principally K-pop music and TV drama series that often display s infrastructure as backdrops is steadily attracting new international fans. Exports of content have been reaping an annual 5 trillion won and have helped elevate awareness of other key n exports such as cosmetics and automobiles. The remaining three categories (policies/institutions, heritage and people) have been below the OECD average in both substance and image throughout the survey s lifetime. However, their overall substance and image scores improved. Just as celebrities and modern succeeded in raising image based on strong substance, the improved substance in these three categories is expected to boost image. 2. : celebrities & heritage rise; science/technology falls during the past three years has seen various swings among the categories. and heritage have risen steadily. has recovered from a fall. Economy/corporations, policies/institutions and infrastructure have flattened out after initially rising. And science/technology has slumped after rising. 10
Jan. 28, 2013 Levels of vis-à-vis OECD Average Image 2010 2011 2012 2010 2011 2012 Target (100) 177 177 169 138 136136 129 128 128 126 128 123 99 101103 Target (100) 97 101 93 143 140 134 132 135 134 136136 137 127 125 121 Note: Achievement Rate = Nation s overall score OECD average score 100 (%). In particular, the science/technology category, which had been the pillar of 's nation brand, retreated to the 2010 level, from 142 in 2010 to 139 in 2012., another pillar, dropped from its 2011 ranking. Meanwhile, there has been a steady uptrend in celebrities and heritage during the past three years, while modern strongly rebounded in 2012 after a drop in 2011. The celebrities category saw a sharp upswing, from 152 points in 2011 to 166 in 2012, as did the modern from 129 to 137 points, reinforcing their role as key brand drivers. The contributors were "Gangam Style," and other K-pop stars acting as global celebrities who promoted 's modern. 's London Olympic stars also contributed to the rise in the celebrities category. In addition, heritage also climbed, from 65 to 71. The improvement was due to efforts to OECD Average Achievement Rate 2011 achievement rate Image achievement rate 2012 OECD achievement rate = 100 Economy/corporations 121 Science/ 152 technology 142 111 123 84 129 92 95 99 7464 89 92 93 79 Policies/institutions exceeds target & Economy/corporations image exceeds target 125 166 Science/technology 139 111 131 Image 88 exceeds target 137 99 92 103 72 71 91 95 92 79 Policies/institutions & image below target Samsung Economic Research Institute 11
Economic Trends Self-perception and Overseas Perception in 2012 (Based on Image) 60 65 70 75 80 85 90 95 100 105110115120125130135140145150155160165170 Economy/ corporations Policies/ institutions < Science/ technology < Target 2012 Survey Self perception Others perception (domestic assessment) (overseas assessment) 2011 Survey Self perception Others perception (domestic assessment) (overseas assessment) register cultural assets at the UNESCO and recovery of cultural assets, including regaining ownership of the former n legation building in the, the cradle of the n independence movement in the early 20th century. Science/technology and economy/corporations, which had been the pillars of nation brand, maintained stability (through science/technology retreated somewhat). 3. Image: Gains especially in science/technology In image, all categories except heritage rose in 2012. The science/technology, after rebounding in 2011 (119 in 2010 to 123 in 2011), saw the biggest jump, to 131 in 2012. The number of 's world best products stood at 634 in 2012, a five-fold increase in the past 10 years. Among them, 143 had the top global market share in their segment. Economy/corporations saw a steady rise since 2009, and made a relatively big jump in 2012 compared with 2011, from 121 to 125. The outcome is seen to have reflected the confidence in the n economy as was the only country to be assigned a credit rating upgrade by Moody's and Fitch last year among G20 countries. rose from 99 in 2011 to surpass the OECD average with 103 points in 2012, far exceeding the category s substance score of 92. rose from 95 to 99, and people from 94 to 95, approaching the OECD average. Smartphone distribution rate surged to 60% in 2012 from 1.7% in 2009, ranking the fourth in the world, which helped solidify image as an IT powerhouse. Foreign tourists' travel experiences and modern images projected in n dramas also contributed. The number of inbound medical tourists rose 10-fold to 150,000 in 2012 from 6,000 in 2007, enabling to display its infrastructure in terms of quality and scale. 4. Domestic, overseas perceptions rise slightly ns self-perception and overseas perception advanced slightly in all the categories, except for economy/corporations and science/technology. In economy/corporations and policies/institutions, ns self assessments continued to be lower than overseas assessments. The global economic downturn and the political situations both at home and abroad (i.e. general and presidential elections) may have had 12
Jan. 28, 2013 a negative effect on ns views on the economy/ corporations. The domestic assessment on science/technology, the leading image for, fell to 162 in 2012, from 167 in 2011. Meanwhile, overseas assessment on science/ technology rose to 139 from 123. The people category, which was rated more highly overseas in 2011, reversed places in 2012 with domestic assessment exceeding overseas assessment, which indicated that ns pride is swelling. As a result of the overseas popularity of K-pop and the appearance of n films at overseas film festivals, ns selfperceptions on people rose compared to the previous year. score in celebrities and modern rose substantially compared to 2011, but image improved only slightly. should be more actively used in the promotion of overseas and domestic image making. IV. Implications s nation brand in 2012 exceeded the OECD average in both substance and image. The efforts of the government and the private sector appear to have produced results, and in the future more strategic nation branding efforts will be needed. The gap between s substance and image has diminished in the past four years, from 8 to 6 to 4 to 2 points. This suggests that the strategies to promote the national brand are having a meaningful impact. Among the top 10 nations in image, fell from first place in 2011 to fourth due to its continuing economic slump and territorial disputes with neighboring countries while (from 9th to 5th) and (from 4th to 3rd) advanced. has the lowest level of youth unemployment in the EU amid the eurozone fiscal crisis and ranks No. 1 in the Economist magazine s Global Village 2013. likely benefited from its air of modernity and refinement as projected through the London Olympics and its status as a leading European country at the Olympics. 1. improvement needed in four areas Overall, substance met the OECD average, but improvements are still needed in the policies/institutions, infrastructure, and heritage and people categories. To improve substance in the short-term, the image of policies/institutions, which was rated lower than substance, can be improved by actively publicizing national policies and diverse institutions. Parallel efforts to improve institutions to global levels will also be needed. In particular, it is necessary to inform the public about global-level policies/institutions to promote public trust and pride in national policies and institutions, i.e. self perceptions. The effectiveness of government policies, including policy impact (84 points), the economically active female population (62 points), and development and Image of OECD Countries High Image > Image 's Image Ireland Greece Turkey Portugal Mexico > Image Low Low s High Samsung Economic Research Institute 13
Economic Trends aid indices for underdeveloped countries (47 points), as well as contributions to international society must be actively promoted. The heritage, people, infrastructure categories urgently need more effort to develop detailed substance under a long-term strategy, as well as continuous follow-up management. improved in substance compared to 2011, but this had little impact on image improvement. The disparity between domestic and overseas views on image remained wide, indicating a need for more effort in developing soft content that can build common ground with the people around the world. As for infrastructure, lacks notable landmarks from a tourist perspective. Yet it plays host to scores of international conferences annually. It will be necessary to package its cities and as a product in addition to hosting events. 2. Image improvement: Promotion of celebrities and modern Even though substance improved substantially for celebrities and modern, image overseas continued to receive low ratings, indicating that has an urgent need to communicate in a way that connects its soft power with the nation. Cultural content and international celebrities should be publicized overseas and their connection with should be highlighted. It is necessary to prepare a system that brands n Wave stars, cultural figures (writers, musicians and designers etc.) athletes and prominent diplomats as Made in. If various international sports events are recruited to provincial cities, it will be necessary to publicize urban more actively, while introducing films that have been honored at international film festivals and cultural products etc. overseas. It will be necessary to maintain and strengthen s leading image (in terms of others perceptions) in economy/corporations and science/technology through overseas publicity. In 2012, self-perceptions of economy/corporations and science/technology may have fallen slightly due to the domestic political and economic environment, including the presidential election and economic slowdown, suggesting that image needs to be restored to at least 2011 levels by publicizing favorably-rated overseas activities within the country. Small and medium-sized companies that are better known overseas, or the technological capabilities and worldwide market results of large companies, should be publicized domestically, to increase pride in the n economy and its businesses. Overseas recognition such as the 46 n companies listed in the Fortune Global 500; the 51 companies in the Fortune Most Respected Companies listing; 59 international design awards; and 31 overseas patents, should be actively publicized at home. SERI 14