Nation Brand Index

Brexit: an outsider’s view on its impact on the UK’s country image.

The EU referendum and its likely implications on the UK’s country image.

In the recent EU referendum, the majority of British people voted to leave the EU, but what does this decision entail for the UK’s country image?

The implications of the leave vote on the UK’s country image stretch far beyond the actual decision. Key considerations include: the leave and remain campaigns before the actual vote, the arguments they made to support their cases, the actual people (and their personal brands) supporting either side of the argument, the way the British public related to either camp, and most recently, the way the Government is moving ahead with the decision to disconnect Britain from the EU, the roles and political leadership of the main party leaders, and the role of the British Parliament in this process.

I will be considering each of Simon Anholt’s six dimensions to study country brand. Anholt’s dimensions for his Nation Brand Index (NBI) are also very similar to FutureBrand’s Country Brand Index (CBI), so either way we are talking about similar things. (In spite of similar criteria, however, FutureBrand ranks the UK #12 in the world for the year 2014-15, whereas Anholt-GfK ranks it #3 for the same period).

1. GOVERNANCE.

Aside from the decision itself, the actions and words of leading politicians and the Government since the referendum took place shows that Britain didn’t have a roadmap or contingency plans for Brexit.  The country has moved swiftly from Brexit as a consultative option that needed to be endorsed by Parliament, to hard Brexit being discussed without the British Parliament even being involved. Any other country in the world playing with the possibility of making such a major decision without the inclusion of their own parliament would, in all likelihood, be branded as non-democratic, not reliable and not to be trusted.

2. EXPORTS.

The export dimension is not just about the performance of products or services, but their public image associated to country image. It is not clear yet what implications Brexit will have on UK exports. It will depend on the type of Brexit being implemented and the subsequent relationship with the EU thereafter. About half of UK exports go to the EU, so some impact is expected, as consumers in Europe will now be asking themselves an additional question: whether they feel confident and/or willing to buy from Britain. I would generally expect companies with strong brands, especially big corporations, to be able to dissociate their company brand from the UK’s country image, and therefore not to be penalised by consumers. But for small business this could be a different kettle of fish altogether.

For a detailed insight into the UK’s GDP growth comparison since it joined the EU in 1973, and a breakdown of current UK exports by region, you may want to read this insightful article by INET Oxford here.

3. TOURISM.

Regardless of the form which Brexit takes, Cornwall, the Lake district, the Dorset coast, London and its world-class museums, the Edinburgh Festival, Stonehenge and medieval York will still have the same appeal to the experience-seeking traveller. However, since Brexiters have focused so much on immigration, and hate crime towards foreign nationals has been widely reported in the press since the referendum, a perception of an unfriendly Britain may be off-putting to some European tourists.

4. INVESTMENT AND IMMIGRATION.

These are undoubtedly key dimensions to the UK country brand.  A magnet for world class “education” and “good for business” attributes have made the UK rank among top performers for country brand image. World business leaders (Europeans included) who have studied and lived in the UK have helped to build and maintain the UK’s status abroad. This is absolutely critical for the UK’s diplomatic efforts, in Europe, and across the world.

Recent messages coming from the UK Government, regarding immigration, are going against the core strengths that its country image is built upon.

If the flow of European and international students going to UK universities slows down, so will the available funding at these universities, and therefore their ability to produce and keep top academics and world-class research. On top of that, the export side of the English Language Teaching (ELT) industry will be hit in its backbone, further reducing revenue and influence for the UK.

5. CULTURE AND HERITAGE.

This is definitely a key strength in the country, and I don’t think it will change any time soon. However, there’s a risk that needs careful consideration. As Brexit unfolds, part of the European population is likely to feel that British culture has become less relevant to them; while other countries will inevitably try to push their own culture and language to fill the vacuum. I am thinking particularly of France and Germany, whose political influence in Europe will now be unchallenged as a result of Brexit.

Writing from Madrid, where many parents want to educate their children at an international school, it will be interesting to see how the British Council School does against the French Lycée Français or the German Deutsche Schule (or, indeed, the American School) over the next decade. If we see a relevant shift in student numbers, this might suggest that a change in cultural perception is already taking place. (I remember that just over 30 years ago, English was not available at my local school, with French being the prevalent option).

6. PEOPLE.

Any generalisation here is bound to be short-sighted. Still, if I personally had to rank Brits for their competence, openness and friendliness, I would give them “top marks” within Europe. One of the things that I have always admired the most in British people is their composure, even in the most difficult professional or personal situations. But now Brexit has made the UK look like the stage of an Italian opera, in which actors are taking their roles too much to heart, and keep stabbing each other in the back even after the curtain has dropped.

The liking factor

FutureBrand’s CBI sums up the ability of any country image to influence decisions by the way respondents answer the following questions:

  1. Would you like to live/study in the country?
  2. Would you like to visit the country for a vacation?
  3. Would you like to buy products made in the country?

The CBI seems to have found a common denominator for nation branding in the liking factor, that is, the institutional goodwill that a country image evokes in people’s minds. And I think they’ve got it spot on. Here’s the interesting thing: in the era of experiential marketing, the liking factor is much less feature- or performance-based than experience-based. Experiences are deeply emotional, and often they’re loaded with preconceived ideas and thoughts.

As goodwill is also based on the perceived value for each dimension or attribute, and perceptions often depend on intangible assets such as credibility, or perceived quality, we could also argue that the value of any brand is in its ability to influence. And this is ultimately linked to whether or not we like that particular brand.

The most powerful tool to leverage country image.

FutureBrand ranks “history”, “art & culture”, “political freedom” and “stable legal environment” as the UK’s strongest performing associations. I’d probably add “world-class education”, and therefore the ability to attract world class talent, maybe closely followed by “good for business,” although this is implicit in the attribute “political freedom and stable” environment.

I have no doubt that a critical instrument that has channelled these attributes into incontestable strengths for the UK as a means to exert influence and power is the prevalence of the English language.

In a comprehensive study published in 2004, Professor Geraint Johnes at Lancaster University Management School valued exports of the English Language Teaching (ELT) sector at £10.3 billion in the academic year 2001-02, although he also argued that, in its broadest interpretation, the industry was worth over £22 billion.

At this point, we need to ask ourselves about the reasons behind these very impressive numbers. I’d suggest, among others:

  • English is the #1 second language in the world.
  • English gives access to the world’s highest-ranking universities.
  • English is the #1 language on the Internet.
  • English is currently the most widely used language in the EU institutions.
  • Of course, “the liking factor”.

Drawing conclusions

You can read FutureBrand’s conclusion (published under the heading “opinion”) on the UK’s CBI here. FutureBrand argues that “European country brand strength does not depend on membership of the European Union – as Switzerland’s strong performance demonstrates. So leaving the EU will not necessarily weaken the UK’s brand overall, but rather change the balance of perceptions in favour of new dimensions.

I didn’t expect to find myself disagreeing with it, but I do. Firstly, Switzerland has always made it clear that it had no interest in joining. They have a history of non-alignment that has historically served them well. The rest of the EU countries understand their reasons and, overall, respect them for that.  They also have their own interests in the banking and insurance industries, and these would be difficult to integrate within the EU framework. The Swiss have had a consistent view on non-EU membership, thanks to which we all know where they stand. In people’s minds, Switzerland occupies a specific place which no other country will be able to squeeze themselves into. You can’t say that the UK is going to be “like” Switzerland: that mental territory in the business and perception world is not available. Brands also tend to be penalised if they change their story (their mission), as consistency is a necessary ingredient for credibility.

I also feel that FutureBrand’s comments are a bit disingenuous, since breaking away from the EU is going to cause a major shock to the UK’s economy. I fully respect people who are willing to endure the prospected inflation, slow growth, reduced purchasing power, and reduced influence in Europe in the pursuit of their own vision for the UK. That’s legitimate, and speaks highly of those who have the intellectual integrity and courage to put their money where their mouth is.

It seems, though, that countries are always in need of an outside enemy to blame for their misfortunes, and for its population to unite against a common “evil”. But often in country politics, as in business, we ought to look for the failings inside our own organisations.

In the final scene of the iconic British film Quadrophenia, Jimmy Cooper drives Ace Face’s scooter off a cliff as a sign of both anger and frustration. Like Jimmy, much of the British public today is filled with anger and frustration (this, by the way, is shared by many people in other European countries). Britain may have lost the opportunity to gain hearts and minds in the EU and push for meaningful reform from within. This would, no doubt, have helped their country status and would have given Europeans yet another reason for admiration. But, since this is no longer an option, what’s left now is for the British people to decide how they are going to turn these negative emotions into positive change for themselves, their businesses, and eventually, for their country brand.

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