Opinion: Will brand UK be affected by Brexit?
How will brand UK and its largest organisations be affected by Brexit? Tom Adams, global head of strategy at FutureBrand, which organises the annual Country Brand Index, dissects Britain's nation brand
Perceptions of countries and companies are formed over time and reflect conscious effort as well as the influence of external factors. These factors can either be slowly shifting expectations (for example who wants to be a polluter in a world where the new consensus is for a clean future?) or unexpected shocks. From the stunned reactions worldwide, Brexit clearly falls into the latter category.
FutureBrand's interest in the confluence of factors that impact brands extends to producing regularly the ‘Country Brand Index’ and the ‘FutureBrand Index.’ Respectively, they gauge worldwide public perceptions of nations and the 100 most valuable companies, ranking them accordingly. I have used both reports as a basis to think through the implications of Brexit in more detail, although a clearer picture of the impacts will only emerge once the research is repeated.
Will Brexit disqualify the UK from being a country brand and will the UK’s most important companies take a perception hit as a result of Brexit? These are important questions to ask because our research demonstrates the competitive advantages that flow from strong perceptions.
The UK is the 12th most positively perceived country in the world, entitling it to the status of ‘country brand.’ It is fifth most positively perceived country in the European Union, behind Austria, Denmark, Sweden and Germany.
In other words, the UK has an enviable position that confers advantages. It benefits from particularly strong perceptions along the dimensions of ‘would like to buy products made in that country,’ the desirability of living and studying here and its internal attributes such as historical points of interest.
Anything that makes access to UK goods more difficult through trade might weaken perceptions of the UK as a country of origin, although a permanent fall in the pound may counteract this effect. If leaving the EU creates impressions that living and studying in the UK is more difficult, the negative implications are obvious. Perceptions of the UK are also strong in relation to its internal advantages such as ‘historical points of interest.’ Such attributes do not specifically depend on being in Europe and may not be impacted by Brexit.
One of the UK’s weakest dimensions now is for ‘political freedom.’ Perhaps the UK electorate, asserting its independence from a supranational political body like the EU, will cause this score to improve. However, perceptions of the UK as ‘multicultural, diverse, modern and progressive’ might be negatively influenced by an exclusionary political position.
Some of the UK’s virtues and vices stand to be impacted by Brexit but how will depend to a great extent on how the process is managed. In the longer term, we can see from the experience of Norway and Switzerland which are not in the EU, yet come above the UK in the Country Brand Index, that internal attributes and geographic rather than political membership of Europe are more consequential.
In 2016’s forthcoming FutureBrand Index, the UK contingent of the world’s top 100 companies are less likely than their peers to be seen as ‘moving ahead in the next three years.’
These weaker perceptions, captured in May, could be attributed to the large degree of uncertainty in the build-up to the referendum. We expect clarity and certainty in relation to the economic conditions in which organisations will be operating to improve perceptions for this important set of companies.
We are entering a period of uncertainty which could unsettle perceptions of both the UK and its leading companies. The sooner a measure of political and economic stability returns, the sooner a new normal will reign. This means that the UK as a country and its companies will not necessarily suffer a hit to perceptions that damage their position relative to others in the longer term, but that individual dimensions might become more or less salient in determining their character.
If nothing else, it is an interesting time for brand watchers and a formidably challenging one for those shaping country and company perceptions post-Brexit.
Tom Adams is global head of strategy at FutureBrand