B School for Public Policy

William Stewart Woodside Professor Professor of Marketing

Nation Branding: Which Countries Ranked Highest This Year?

Every year, US News and World Report compiles a list of the best countries, the list looks at a country’s wealth and success, but also policies that create opportunity, the people that lead the change, and that country’s history. The 2019 list was just released. Wharton Marketing professor Dave Reibstein is the researcher who compiles the rankings. He recently presented his findings on the relationship between nation branding and economic prosperity with staffers in DC. Here is an interview with Dan Loney from Knowledge@Wharton Business Radio about his findings.

An edited transcript of the conversation follows.

Knowledge@Wharton: Dave, great seeing you.

Dave Reibstein: Great to be here. Thank you very much.

Knowledge@Wharton: Take us further in depth as to how you come about putting together a list of 80 countries, and all of the criteria that is involved.

Dave Reibstein: Sure. So this is our fourth year doing that. And so we have been doing it year over year. We’ve got a set of attributes that we look at, or features that we look at. We sample more than 20,000 people throughout the world. We get people’s perceptions of countries. So we have 80 countries that are being rated, how people perceive them from all sorts of different people.

And we can talk about the nature of who those people are. Sixty five dimensions, we take those dimensions, we break them into categories. We cluster them together into categories. For example, like cultural influence or power or quality of life. Dimensions like that, that consist of several of these different features. We then take each of those particular features, we add them up for that overall factor, quality of life again as my example. And we then see how that country, or how every country ranks on that.

We weigh those factors by how they are correlated with GDP per capita. And then we — it basically is how much does the perception of a country, what I refer to as the brand of a country, how much does the brand of a country relate to and contribute to the GDP per capita. And that list basically reflects, here is the most important brands, the second most important brand, and so forth. All the way down, one through 80.

Now there is 196 countries, right? So we have excluded most countries. The way we select which countries we are going to use is they have to be in the top 100 in terms of tourism, in terms of foreign direct trade, in terms of foreign investment, and the Human Development Index.

Knowledge@Wharton: So when you put together a list like this, and all of this data, you mentioned about all of the different people and resources that you bring into this process. Take us into that, and how the perception of countries around the globe is important. I mean, you mentioned branding. That a country’s brand ends up being incredibly important not only for people that may be outside of the country, but people within that particular country as well.

Dave Reibstein: Right. So if you are trying to develop your own brand, and think about it not as a country, think about it for a company trying to develop their brand, a lot of their effort has to be internally directed. Because we want people within the company thinking positively about it. There is tons of research that shows that employee satisfaction is highly related to customer satisfaction.

So we need to make our employees very satisfied. Now let’s translate that to a country. We need to make the people within our country very satisfied with the country, and that will help translate to, externally people being happy with their country and have positive perceptions.

Knowledge@Wharton: How much do you think in general there is an understanding of that concept, not necessarily by the people that may be in government or in the business sector, but of the public? Of the public of a particular country?

Dave Reibstein: And you are asking about the understanding that we have to be satisfied internally to have an impact externally?

Knowledge@Wharton: Correct.

Dave Reibstein: I don’t think there is much understanding of that at all. I think we have our perceptions about our own country, and so it is. And we hope other people think positively about our country. But how my feelings affect their feelings is not transparent.

Knowledge@Wharton: Japan was a country that you mentioned in an article and on this list of the top 80 countries. Japan is number two overall. Take us into what it is about Japan that they have set in place right now that puts them as one of the best countries right now in the world.

Dave Reibstein: So Japan is very, very interesting because, first of all it just went up in its rating. It has always been in the top five, it just went up to number two. What it is I think we are going to see, is it even to go up to number one. They’ve got the Olympics next year, and the Olympics always provides a positive boost.

And Japan is interesting across a number of dimensions, but let me mention one of them for example. Japan is viewed as very entrepreneurial. And doing a lot with technology. And frankly, when we think about Japan we think about all of the electronics that have come out of Japan. It is not clear to me that they continue to be developing as much as some other countries, but brands and images stick with people for quite a while.

And this notion of electronic forefront is where Japan is, has always been there. It is also viewed as a place that is very, very safe. Very clean, very safe. I don’t know if you have ever been to Japan.

Knowledge@Wharton: I have not.

Dave Reibstein: It is amazing that everything is so organized and clean. You never see — actually you do not see people carrying coffee cups walking down the street. If you buy at a Starbucks you drink your coffee in the Starbucks and you deposit your cup there. If you buy at a vending machine, what is expected is you stand by the vending machine and you drink whatever you are going to drink right there rather than walking and then having a can that you are going to throw away or a package you are going to throw away. It is amazingly clean. And that is just what the culture is. And so they have got these external images that are there that contribute a lot to people’s overall perception of the country.

Knowledge@Wharton: But in looking at Japan, and there was an interesting graph in one of the stories that you did, that the perception I guess outside of Japan is starkly different than what the perception is within Japan from its own citizens.

Dave Reibstein: That’s right. So I just described things to you about its safety and its cleanliness. Coming from America, I am struck by the cleanliness within Japan. Actually last year I went to Japan, and then I went from Japan to India. And it was just amazingly different, because in Japan I never heard a horn honk, and in India you drive with one hand and you are honking the horn with the other. And that is just some of what it is that is expected.

And so I am going to get to your question. For an outsider going in it’s like, “Whoa there is no horns honking! Whoa, look how clean it is! Look how organized!” If you are on the inside, it doesn’t look that clean. This is just what life normally is. And so their perception is that it is not extraordinarily clean, it is not extraordinarily safe, it is just that is what life is.

Now one of the things that I have been able to do with the data that we have collected is — the main thing is how the world sees various different countries. For certain countries, I’ve got a large enough sample within that country, and say how do people within Japan view Japan? How do people within the United States view the United States, etcetera. So I can look at internal views and perception of a country across the 65 dimensions, and I can compare it with the external views.

Almost always the internal views are better than the external views. We feel good about what our country is is the general view. Japan is the outlier, Japan is the exception. People from the outside think so positively about Japan. On the inside, Japan is nice but it is not extraordinary. And so they actually — and some of that I think is just the humility of the people who do not think of themselves in a more glowing fashion than externally.

Knowledge@Wharton: I am always interested to kind of get the backstory here on the US, because just by what you said of where Japan is, just on the cleanliness issue it is a much different mindset than it is in Japan. But when you look at the United States, they are eighth on your list, still in the top ten. That is exactly where they were a year ago. But again, refresh us as to some of the things that are going on within the US that puts them at number eight.

Dave Reibstein: So first of all, four years ago the United States was number four. Disappointed the United States was not number one. And I sort of thought, okay let’s make America great again, let’s see America go back to that number one position, it would be very, very nice to see. Held off the gathering of the data until right after the election in 2016, collected the data then.

It was a very vitriolic campaign and everything. We fell to number seven. Last year we fell to number eight. Now we are barely holding on to the number eight position. Perceptions of the United States are going down, perceptions of — actually I will tell you where the biggest downfall was for the United States this year.

The external perception of trust has gone down significantly. Can’t necessarily trust the United States. They enter into an agreement, they withdraw from that agreement. They make one statement, they reverse that particular statement or that position. Are they in NATO or are they out of NATO? What is the agreement with Iraq, what has come away from that? And so the external perception of trust is down. And that affects how people feel about our country.

Knowledge@Wharton: Which is something that I think a lot of people believe has the opportunity to change either in two years or in six years depending on what happens with the 2020 election, and then on down the road.

Dave Reibstein: Right.

Knowledge@Wharton: Switzerland is at the top of the list. And I find that interesting because the Swiss, and they were there a year ago as number one. And Switzerland is always seen as this “neutral country.” So what is it about Switzerland that continues them to be the best country right now?

Dave Reibstein: What is not about Switzerland that gets them into the number one position? They are so much in the middle, there is no strife. It is like we’re not taking sides in anything, we are out here perceived to be good citizens, clean, a good living environment. It turns out, by the way, on none of the factors are they number one. But they are high on almost all of them.

It is open for business, you can do business there, no particular problem. The quality of life is very, very good. As I mentioned, citizens very good. Cultural influence, yeah there is some cultural influence that is there. It is such a peaceful place, and such an open place. I think those all bode very, very well for them.

Knowledge@Wharton: What about our neighbors to the north and the south? Canada is in the top five. Mexico is down in the thirties. How do they grade out in terms of all of the factors you are talking about?

Dave Reibstein: So there has been a lot of interest in the Canadian ranking right now, which is over the last three years Canada was number two. So it started off Germany was number one, Canada was number two. Then it went to Switzerland number one, Canada number two. Switzerland number one, Canada number two. Again, that same thing.

This year, Canada dropped to number three. And they dropped to number three just because — not because anything changed about them, but the perceptions about Japan have been getting better, and better and better. If you look at the Canadian rankings, one of the things that people say is the quality of life is phenomenal there. And it is the place where — it is the number one place for quality of life.

And let me tell you what that means. They are viewed as economically stable, very, very stable country. Very, very, very safe. Politically very, very stable. Well developed public health system. Those were all some of the dimensions that feed into that, that Canada does really well. Trudeau has been referring to the study, of look at the quality of life in Canada.

And actually Trudeau contributes to the perception of Canada. Everybody sort of views Trudeau as one of the greatest leaders in the world right now. And so if you go to Davos, he sort of is a rockstar there. He sort of walks around and looks like he could be a snowboarder but he happened to wander in to the—

Knowledge@Wharton: People wanting his autograph and stuff like that.

Dave Reibstein: Yeah, exactly.

Knowledge@Wharton: Now one of the countries that is in the top 20, which I guess was not ranked a year ago is Belgium.

Dave Reibstein: Well it is a little bit embarrassing for me that they go from not ranked to in the top 20. They were not ranked not because they were not in the top 80, they fell short on the four criteria that we have. And so this year they made it into that criteria, and so suddenly they were being evaluated. I will confess when we first did it, Switzerland wasn’t even in the rankings.

And then all of a sudden Switzerland — and by the way, the first year that we did it where they’re at Davos presenting here’s the best countries, and oops we’re in Switzerland and Switzerland is not even ranked in this. But the criteria were well established, you’ve got to be in the top 100, and the first three in the top 150 of the Human Development Index to be considered. And so Belgium now makes it. And when you look at the perceptions of Belgium it makes it to the top 20.

Knowledge@Wharton: I wanted to ask you about a couple of countries that at least the perception here in the United States that they would have a checkered past. One being Iraq, another one being Vietnam. And what you see specifically, and I guess Iraq moved into the top 80 this year. What was it that you saw, let’s start with Iraq, what did you see in that that is making a significant change for the better for that country right now?

Dave Reibstein: They are starting to have some more foreign trade. And so how did they get into the top 80 when they weren’t before? And the reason was that they met that criteria to be one of the countries that is being considered. Just that simple. I believe they are like 79th, something like that. So they barely — they met the criteria, but the perceptions of Iraq are still not great.

Knowledge@Wharton: As you said from the trade perspective there is some policy, I would think changes going on within that country to understand maybe some of the things they need to do to have a better economy just in general.

Dave Reibstein: Absolutely, no question about it. The other one that you asked about was Vietnam. And have you been to Vietnam?

Knowledge@Wharton: I have not.

Dave Reibstein: Vietnam is amazing. If you ask me, that is a good place to invest. If you go there there is tons of building that is going on, lots of businesses are moving there. It used to be, okay what we are going to have to do is manufacture things in China. Lots of manufacturing is moving over to Vietnam.

Low labor cost, very well organized. Seem to be doing a great job at building up a infrastructure so that they can do commerce very, very well. So I am not at all surprised to see Vietnam rising in rankings.

Knowledge@Wharton: You mentioned India, having traveled there a little bit ago. India is seen as this unbelievable opportunity for growth globally. You see US companies that want to be a part of the Indian economy right now. They are ranked, I believe it was like 27. How do you view them moving forward because of all of this expectation, this positive expectation that is out there right now about India?

Dave Reibstein: So they have been making strides, positive things, but it is slow. India, by the way, that is one of the countries that if I look at their internal perception, the energy and positive view within India is much higher than the norm. I said every country except Japan has a positive view relative to external, India’s is off the scale in terms of how positive they are.

The external perceptions in terms of a business opportunity is there. There still is a lag in people’s perception about how progressive the country is. I think India has got tons of potential. Low labor costs. Actually it helps that they speak English. So for those of us that are unilingual, it helps for a place to do business and to do world commerce.

And so definitely see them on the rise. And they are a competitor for Russia. And their huge population really contributes to how much of a consuming country they can be. So lots of people are looking to India, and I think we will continue to see growth that is happening there.

Knowledge@Wharton: China is another country that obviously makes a lot of news, especially going on with what we see now between the US and China over trade right now. But it is also one of the largest economies on the planet right now. So where do you see the positives and the negatives of China right now? Because there is also seemingly a lot of mystery about what actually is the growth of China. Are the numbers they put actually correct. What is it about China that — you have them up in the top 20.

Reibstein: Right. So I don’t have the secret sauce to know whether those numbers are correct or not. So who knows. But what it is we see is that China is definitely progressing. I went to China, this is going to be embarrassing for me to say on the air, I went to China in 1981. First time I went there. And to see China in 1981 versus to see it in 2019, so I haven’t been this year, but to see it more recently.

Knowledge@Wharton: But night and day?

Reibstein: It is unbelievable. And for me it was fascinating because when I went originally, you would go in to a store and there would be — if you wanted to buy shampoo there would be one brand on the shelf, that’s it. If you want shampoo your choice is shampoo or no shampoo, that’s it. Toothpaste, it’s toothpaste or — there were none of these brands. It was a nascent marketing environment.

And it has totally evolved. And actually when I go there, the airports are much more advanced than we see the airports in the United States. The shopping malls are an extravaganza. It is an amusement park going to the shopping malls, and everything you could see. And so commerce is really, really, really developing there, no question about it.

So that is all of the positive, you see that happening. On the negative side, as they continue to develop products that are seen of poor quality, as they continue to develop things that are unreliable, their perceptions will not be great. And that is why they are not in the top ten in terms of a brand. And in fact I will give you a challenge on the air.

Knowledge@Wharton: Okay, all right.

Reibstein: Name a brand from China.

Knowledge@Wharton: Huawei.

Reibstein: Huawei, okay. So by the way, we now can say Huawei, we can now say Alibaba, we can say Tencent. But I will tell you, five years ago I would walk down the street and ask people that question, they couldn’t come up with a brand. I would do that in Europe, I would do it in South America. I would say, name a product from China.

China, because it has such a big market, everything focuses on making things for domestic consumption. And they really haven’t been able to develop any brands that are on the national stage. And Huawei is probably the number one with Alibaba number two. They are making their way, we are going to see it. We definitely see the growth. It is a vibrant economy, and the United States has sort of been ignoring them for too long.

Knowledge@Wharton: Good seeing you again, thanks for coming in.

Reibstein: Great to see you. My pleasure.