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Bloom Consulting Country Brand Ranking Trade 2011

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  • 1. Development of CountriesHuman Asset ManagementBusiness StrategyBloom Consulting Country Brand Ranking ©2011 TRADE - TOP 25 Performers EditionBloom Consulting © 2003 - 2011 contact@bloom-consulting.com / +34 91 308 0286 (CET) Page 01
  • 2. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionBloom Consulting Country Brand Ranking ©2011 TRADE - TOP 25 Performers EditionBloom Consulting, has created this World Ranking in order to answer the fundamentalissue at the heart of every country, corporation and soul: how does one become attractive?Luckily, the rationale behind such a question for a nation is quite simple.A country wishes to draw the interest of people in order to create wealth.In other words, the purpose of country branding is to bring economic growth.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 01
  • 3. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionBloom Consulting Country Brand Ranking ©2011 TRADE - TOP 25 Performers EditionAs a result of every country branding individual strategy, foreign direct investment(FDI) net inflows worldwide from 2005-2009 were $7.8 trillion. During the same period,FDI inward stock worldwide experienced an 11% annual growth rate.The Asian and Latin American countries have grown significantly, at a rate of 17%and 14% respectively, followed by European and African countries which have grownat a lower rate of 13%. This is a remarkable figure for Europe as they hold 53% of worldFDI net inflows from 2005-2009.In absolute terms, Europe has been able to attract the vast majority of global tradeinflows, followed by the US. US inward stock is the highest in the world, about6.7 times the size of African inward stock.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 02
  • 4. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionIntroductory NoteA word from our CEOIt is essential for countries to realize that the image a nation projects has a significant impact onthe economy as a whole. The country brand strategy you convey will undoubtedly affect theway your country is perceived. The current global financial crisis has proved this. For instance,we can now see how credit rating agencies are highly influencing external perceptions aboutcountries and more importantly the strong impact they have on a country’s economic perfor-mance. The interesting fact is that how these ratings are calculated are not in the public domain,but rather the speculative effect they have is; it has proven country branding is more than acapricious political idea, but rather a definite national necessity countries now need to face andmanage as a priority. Countries can no longer afford to allow third parties to play with theirnational asset – their brand.Traditional country branding studies and rankings have used public opinion and stereotypes inorder to draw conclusions. Bloom Consulting has created the first study which captures thelinks between the image a country projects and the effect this has on the country’s success. Wehave merged macro and micro country facts and statistics, and correlated them with the commu-nication strategies conveyed by every country in the world. This has enabled us to reach deeplymeaningful conclusions that mathematically prove that positioning your country in a specificway will have a direct impact on your GDP. Such consequential conclusions are what otherstudies in the past have lacked.This report will help you understand the delicacies of country branding. It will let you compre-hend the current situation worldwide, and which communication strategies should be empha-sized or ignored. It will unearth the regional complexities in this global competition, by unleash-ing the truth behind how a country is perceived and the way it can differentiate itself in theinternational arena.We sincerely believe that this report will expand your knowledge on how to brand your country,and will contribute to guiding your country down the path to success.José Filipe Torres - CEO of Bloom ConsultingBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 03
  • 5. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionCountry Branding Current ChallengesBloom Consulting “3T” Approach ©The main objectives for creating a country brand strategy rely on three main areas:T1- Attraction of TradeT2- Attraction of TourismT3- Attraction of TalentThe traditional approach to face these challenges is to create, or simply improve, perceptionsof the country both domestically and internationally.Most of these initiatives are developed under one umbrella strategy.This means countries try to create one single strategy for 3 different objectives.However, the ideology and objective behind each one is simply different and ultimately will notwork; the 3 objectives are completely antagonistic. As an illustrative example, one cannot com-municate leisure and entertainment to investors at the same time as communicating a qualifiedand hardworking workforce to potential tourists. They automatically repel each other, thereforedestroying their core objective. Most of the time, what countries try to do is reach a compromiseto better understand the objective of the overall country brand strategy. T2 Objective T1 T3 Fig. 1 - Bloom Consultings ‘3T’ Approach ©Bloom Consulting’s country branding methodology separates these objectives, trade, tourismand talent and treats them individually, not as an umbrella strategy. Thus, we are able to derivegrowth projections and calculations in order to better understand the objective of the overallstrategy (see Fig. 1).Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 04
  • 6. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe ResearchUnderstanding the research methodologyOne of the key differences in theBloom Consulting Country Brand Ranking©and Bloom Consulting Country Brand Rating©is the use of facts and official data as opposedto surveys and interviews. It combines hard data,such as economic indicators and country characteristics,along with communication strategies, giving birth to theBloom Consulting Algorithm.A consistent use of official and recognized sourcesMore than one source of information has been used throughout this project to elaborate theglobal ranking. The United Nations (UN) provided a comprehensive list of 193 countries*,which enabled us to avoid any bias in selecting and identifying specific territories.The economic variables selected to measure the performance of the countries were taken fromthe World Bank (WB). This ranking uses 2009 data, the latest data available from all sources.The communication strategies used by countries to attract FDI were taken from the InvestmentPromotion Agencies (IPAs) of the respective countries associated with the World Associationof Investment Promotion Agencies (WAIPA).When these IPAs were not accessible through the WAIPA, information was gatheredfrom embassies or chambers of commerce.It can therefore be confirmed, that through the consistent use of official internationallyrecognized sources, the data used is current and accurate.*Hong Kong has been added to the list as Bloom Consulting considered the specific nature of the territory and the importance of itseconomic variables. Treating them separately allows us to analyze the real potential of both Hong-Kong and China respectively.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 05
  • 7. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe ResearchUnderstanding the research methodologyA revised and validated use of dataWith these sources at our disposal, we collected the country brand strategy informationof each country in order to understand how the country brand wishes to be perceived.Naturally, the quality of the data used throughout this project is crucial. For this reason, theresearch methodology includes a two-step approach to checking the information. Only con-firmed and official data through the World Bank, UNCTAD, and the United Nations has beenused. Moreover, all IPAs have been contacted by email and telephone in order to verify theveracity of our information.Our methodology assumes that the communication strategies used by IPAs are accurate.We do not question their authenticity as this is not the purpose of the study, we are only inter-ested in the impact they have on a countries’ economy. Even though some countries may chooseto promote aspects that differ slightly from reality, this behavior is rare and eventually wouldhave a negative impact on their FDI and their country brandingThis study examines 144 countries; it was not possible to include all 193 countries supplied bythe UN. If a country did not promote any significant messages or if economic data was notaccessible, then they were eliminated from the study.An explanatory and comprehensive clustering of communication strategiesAll country branding strategies are heavily reliant on the chosen communication strategiesas they have a huge impact on the countrys performance. Overall, more than 3,000 messageshave been collected from official sources, and implemented as a basis of informationthroughout this report.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 06
  • 8. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe RankingBloom Consulting Country Brand Ranking ©With the help of powerful multivariate statistical analysis tools, we successfully identifiedcorrelations between a country’s level of success in trade and the perception that the countryprojects through its communication strategy. Case-differential tables, as well as matrices,were used to better comprehend the most significant relationships found, leading to theBloom Consulting Algorithm.Hence, we present a ranking which positionsa country brand according to its economic performancebased on previous economic history andthe Bloom Consulting Algorithm;a process which as yet, has never been done before.It is safe to say that our research has indicated that countries lack differentiation when it comesto attracting potential investors. It is also proven that the most popular communication strategies,such as hard economic facts are not the most effective to attract investors. This provides a greatopportunity for countries to differentiate themselves.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 07
  • 9. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe Ranking - TOP 25Bloom Consulting Country Brand Ranking ©Bloom Consulting Country Brand Ranking © Top 25 Countries 2011 – Trade 1. USA 14. Austria 2. Luxembourg 15. Australia 3. China 16. Italy 4. UK 17. Singapore 5. France 18. Mexico 6. Belgium 19. Sweden 7. Canada 20. India 8. Hong Kong 21. Hungary 9. Germany 22. Switzerland 10. Russian Federation 23. Saudi Arabia 11. Netherlands 24. Japan 12. Spain 25. Turkey 13. BrazilThe list of top country branding performers is mainly composed of the US, European coun-tries, BRIC countries, and Asian economic hubs. No African countries appear on the list, andthere is only one country from the Middle East region, Saudi Arabia.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 08
  • 10. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe RatingBloom Consulting Country Brand Rating ©The country branding rating factor is derived from theBloom Consulting Algorithm which is designedto recalculate the rating factor depending on the eco-nomic performance and the communication strategychosen by each country.Therefore, we can conclude that the Bloom ConsultingAlgorithm cannot be manipulated by any single action.Bloom Consulting has created the Bloom Consulting Country Brand Rating © in order toevaluate the effectiveness of a country‘s chosen communication strategy.The relationship between communication strategies and economic wealth varies substantiallybetween geographic locations and economic development stages. Therefore, these factors, alongwith the number of countries within each region and the repetition rate of each message withineach communication strategy, were taken into account. This ensured that we could derive anaccurate and just algorithm in order to designate each country with a rating factor, a countrycoefficient detailing the effectiveness of its communication strategy.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 09
  • 11. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe RatingBloom Consulting Country Brand Rating ©The Bloom Consulting Country Brand Rating © scale has classified the rating factors into7 categories according to the effectiveness of a country’s communication strategy.Bloom Consulting Country Brand Rating © Categories Rating Major positive impact Triple Green Moderate positive impact Double Green Minor positive impact Single Green No impact White Minor negative impact Single Red Moderate negative impact Double Red Major negative impact Triple RedBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 10
  • 12. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe Rating – TOP 25Bloom Consulting Country Brand Rating ©This rating reflects the effectiveness of the top 25 performers chosen communication strategies.Bloom Consulting Country Brand Rating © Top 25 Countries 2011 - Trade Rating USA China France Brazil Australia Singapore Mexico Japan Luxembourg UK Hong Kong Russian Federation Austria Sweden Switzerland Belgium Germany Netherlands Italy India Turkey Canada Spain Hungary Saudi ArabiaThe top 5 country branding performers have all achieved high positive rating factors; howeverso have other countries located further down the ranking. Countries such as Japan, Mexico, andSingapore all have a top rating due to the use of the most effective communication strategy.On the other hand Saudi Arabia and Hungary both received negative rating factors despitemaking it into the top 25 global ranking. This is because even though they attract a lotof investment, they could be using a more effective communication strategy in orderto increase FDI.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 11
  • 13. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe Country Branding StrategyHow the world is differentiating itself50% of all countries tend to use the same typeof communication strategy regardless of geographiclocation. The majority choose to communicate messagesrelated to investment incentives, strategic location,and the ease of setting up a business.The extent to which countries make use of messages, which messages they communicate,and the number of messages they use among other key facts, varies greatly from region toregion. Most countries use different strategies when branding themselves.Country branding differentiation can be achieved through the various messages a countrydecides to communicate, all with the same intent, attracting FDI. In particular, the level of differ-entiation varies from country to country. There are countries that have a high or low differentia-tion rate based on the communication strategy they use, which allows us to see how many othercountries use the same communication strategy.The most popular communication strategies worldwide are also the most popular communica-tion strategies within every region. All of the messages in Table 1 have been used in communica-tion strategies by more than 44% of countries worldwide.Table1. Most popular messages used in a country‘s communication strategy; World1. Favorable Fiscal Policy 63%2. Investor Friendly Environment 63%3. Favorable Strategic Location 61%4. Qualified Workforce 53%5. Social Political Stability 44%Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 12
  • 14. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionThe Country Branding StrategyHow the world is differentiating itselfIn fact, using popular messages does not guarantee a positive impact on the country brandingstrategy; actually, it’s the opposite; the most valued messages according to theBloom Consulting Algorithm © factor are not the most popular.Table2. Most valuable messages used in a country‘s communication strategy; World1. Social Welfare2. Market Size Characteristics3. Legal Framework Characteristics4. Available Workforce5. Soft Economic CharacteristicsCommunication strategies related to social welfare are the most valued in the international arena.Countries that decide to communicate social benefits, education, and security would rate highly.Other valued messages help to communicate the soft aspects of a country such as stability, a safeinvestment environment, innovation culture, as well as no corruption, legal transparency, anda positive legal financial climate.The communication strategies mentioned above are the ones that work best in the global arena.However, we know that a regional approach is needed and that the most valuable messages ineach communication strategy vary from continent to continent. In Europe and Oceania, innova-tion and quality of life are the most valuable messages, whereas in Latin America, the mostvaluable message is related to economic growth. Asian countries also value growth and theyinclude innovation in their most valuable communication strategy. Finally, African countriestend to value low-cost and qualified workforces in their communication strategy.Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 13
  • 15. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingBloom Consulting Country Brand Ranking ©2011 TRADE - WORLD RankingAs opposed to surveys and qualitative interviews, this country brand ranking combinesthe countries economic performance with the respective country branding strategies; a process which as yet, has never been done before. Such combination of variables hasgiven birth to the Bloom Consulting Algorithm - which sets the world RankingWorld Rank Rate1. United States of America2. Luxembourg3. China4. United Kingdom5. France6. Belgium7. Canada8. Hong Kong9. Germany10. Russian FederationBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 01
  • 16. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingWorld Rank Rate11. Netherlands12. Spain13. Brazil14. Austria15. Australia16. Mexico17. Italy18. Signapore19. Sweden20. Hungary21. India22. Switzerland23. Turkey24. Saudi Arabia25. Japan26. Egypt27. Poland28. Ukraine29. Colombia30. Nigeria31. Kazakhstan32. Chile33. Peru34. Israel35. South AfricaBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 02
  • 17. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingWorld Rank Rate36. Indonesia37. Romania38. Argentina39. Thailand40. Malaysia41. Czech Republic42. Pakistan43. Portugal44. Republic of Korea45. Denmark46. Bulgaria47. Lebanon48. Finland49. Sudan50. Jordan51. New Zealand52. Cyprus53. Iceland54. Croatia55. Serbia56. Morocco57. Greece58. Slovakia59. Tunisia60. AlgeriaBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 03
  • 18. 2011 TRADE Development of Countries WORLD Human Asset Management Business Strategy RankingWorld Rank Rate61. Republic of the Congo62. Philippines63. Iran64. Oman65. Estonia66. Dominican Republic67. Costa Rica68. Panama69. Lithuania70. Ghana71. Democratic Republic of Congo72. Bahrain73. Belarus74. Trinidad and Tobago75. Uruguay76. Syrian Arab Republic77. El Salvador78. Iraq79. Bosnia and Herzegovina80. Yemen81. Madagascar82. Georgia83. Latvia84. Jamaica85. Guatemala Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 04
  • 19. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingWorld Rank Rate86. Malta87. Bangladesh88. Slovenia89. Zambia90. Honduras91. Montenegro92. Albania93. Bahamas94. Cambodia95. Uganda96. Armenia97. Sri Lanka98. Uzbekistan99. Botswana100. Ireland101. Mongolia102. United Republic of Tanzania103. Nicaragua104. The Forerm Yugoslav Republic of Macedonia105. The Republic of Moldova106. Senegal107. Angola108. Barbados109. Ethiopia110. AfghanistanBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 05
  • 20. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingWorld Rank Rate111. Mauritania112 Gabon113. Antigua and Barbuda114. Mauritius115. Seychelles116. Paraguay117. Kenya118. Cape Verde119. Cameroon120. Liberia121. Fiji122. Saint Lucia123. Guyana124. Djibouti125. Mali126. Saint Kits and Nevis127. Belize128. Benin129. Kuwait130. Grenada131. Saint Vincent and the Grenadines132. Papua New Guinea133. Lesotho134. Malawi135. Sierra LeonBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 06
  • 21. 2011 TRADEDevelopment of Countries WORLDHuman Asset ManagementBusiness Strategy RankingWorld Rank Rate136. Swaziland137. Dominica138. Maldives139. Rwanda140. Gambia141. Burundi142. Zimbabwe143. Vanuatu144. AzerbaijanBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 07
  • 22. 2011 TRADEDevelopment of Countries TOP 25Human Asset Management PerformersBusiness Strategy EditionAboutBloom ConsultingBloom Consulting is a strategy consulting firm specialized in country branding.José Filipe Torres founded Bloom Consulting in 2003 and is a regular spokesperson at confer-ences and universities worldwide. He has been interviewed by both The Economist and Forbes,where he was identified as one of the top 3 country branding experts in the world.At the moment Bloom Consulting have offices in Bulgaria, Brazil, Italy, India, Portugal andSpain (headquarters), as well as research centers in Tokyo and London. Bloom Consulting workclosely with presidents, monarchs, ministers and institutions in order to define their strategy,establish their vision, and implement it. Bloom’s clients include the Bulgarian, Latvian, Polish,Portuguese and Spanish governments, and also regions such as Madrid, Castilla y Leon in Spain,and Alqueva and the southwest regions of Portugal.Bloom Consulting has developed a 3T approach © to separate Trade, Tourism, and Talentstrategies. One fundamental point for the success of all of Bloom Consulting’s country brand-ing projects, is the CAMPRO methodology ©. This methodology is a combination of academicand professional knowledge under Bloom Consulting’s management and control, key to obtain-ing the most accurate recommendations and insights for all clients.More informationWhile this report provides a general global overview, the information presented here is anythingbut a glimpse of the findings we have at our disposal. Please do not hesitate to contact us if youwould like a catered and detailed version of the Bloom Consulting Country Brand Ranking ©report for your country or region.For more information, please visit:www.bloom-consulting.com/country_branding_rankingwww.bloom-consulting.com/country_branding_ratingor send an email to countrybranding@bloom-consulting.comBloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 14