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Ranked: The Most Valuable Nation Brands in 2020

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3 years ago

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Most Valuable Nation Brands in 2020

The Most Valuable Nation Brands in 2020

In today’s heavily interconnected world, a country’s reputation can have a big impact on its overall economic prosperity.

In fact, a country’s reputation—its brand—is arguably one of its most important assets. A strong nation brand has the power to boost tourism, attract and retain talent, and potentially bring in foreign investment.

This graphic uses data from Brand Finance’s Nation Brands 2020 report, which attempts to quantify the reputations of different countries around the world. We’ll also dive into the top 10 nation brands, and how their brand value has changed over time.

How is Nation Brand Value Quantified?

While the report provides a full explanation of its methodology, here’s a quick summary of how the scoring system works.

First, Brand Finance calculates a country’s Brand Strength Index (BSI) score using three pillars:

  1. Goods & Services
    Openness to tourism, market size, and trade rules
  2. Society
    Quality of life, corruption, and cultural image
  3. Investment
    Talent retention, use of technology, R&D, taxation, and regulation

From there, the BSI score is used to calculate a hypothetical royalty rate, and applied to a country’s GDP. Then, a discount rate is factored in to account for economic risk. Finally, numbers are crunched to provide the “Brand Value” of a country.

The Top 10 Most Valuable Nation Brands

In this year’s report, Brand Finance highlights the impact COVID-19 has had on nation brand values—in 2020, the top 10 nation brands have seen a 14% drop in brand value, on average.

Here are the most valuable nation brands of 2020, and their change in value since last year:

RankCountry2020 Value (USD, $T)Change since 2019
1🇺🇸 United States$23.7-14.5%
2🇨🇳 China$18.8-3.7%
3🇯🇵 Japan$4.3-6.0%
4🇩🇪 Germany$3.8-21.5%
5🇬🇧 United Kingdom$3.3-13.9%
6🇫🇷 France$2.7-12.8%
7🇮🇳 India$2.0-20.8%
8🇨🇦 Canada$1.9-13.0%
9🇮🇹 Italy$1.8-15.8%
10🇰🇷 South Korea$1.7-20.6%

Despite a 14.5% decrease in value, the U.S. managed to maintain its top position with a nation brand value of $23.7 trillion.

Like many other countries, 2020 has been a tough year for America. From recording the most COVID-19 cases and deaths to dealing with a controversial presidential election, the economic powerhouse faced a tremendous amount of international scrutiny this year.

Despite all this, the United States remains one of the most successful and dominant economies worldwide—the only close competitor is China, with a nation brand value of $18.8 trillion.

Over the Years: China’s Steady Climb

While China still ranks below the U.S. in total brand value, its percentage decrease from last year was far lower than the other nations on the list. China stayed relatively stable with a modest 4% drop, about 10 percentage points less than the global average.

China’s stability this year is nothing new. In fact, the country has been steadily closing the brand value gap between itself and the U.S. since 2015:

Nation Brand Value Over Time
This year marks the smallest gap yet, with just a $4.9 trillion brand value difference between the U.S. and China. This is significantly lower than in previous years—for instance, in 2015 the U.S. had a $13.1 trillion lead over China.

Will America make a comeback in 2021 under a new administration, or will the gap between it and China close even further?

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Visualizing the Rise of the U.S. Dollar Since the 19th Century

This animated graphic shows the U.S. dollar, the world’s primary reserve currency, as a share of foreign reserves since 1900.
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16 hours ago

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December 4, 2023

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Visualizing the Rise and Fall) of the U.S. Dollar

Visualizing the Rise of the U.S. Dollar Since the 19th Century

As the world’s reserve currency, the U.S. dollar made up 58.4% of foreign reserves held by central banks in 2022, falling near 25-year lows.

Today, emerging countries are slowly decoupling from the greenback, with foreign reserves shifting to currencies like the Chinese yuan.

At the same time, the steep appreciation of the U.S. dollar is leading countries to sell their U.S. foreign reserves to help prop up their currencies, in turn buying currencies such as the Australian and Canadian dollars to help generate higher yields.

The above animated graphic from James Eagle shows the rapid ascent of the U.S. dollar over the last century, and its gradual decline in recent years.

Dollar Dominance: A Brief History

In 1944, the U.S. dollar became the world’s reserve currency under the Bretton Woods Agreement. Over the first half of the century, the U.S. ran budget surpluses while increasing trade and economic ties with war-torn countries, expanding its influence as the world’s store of value.

Later through the 1960s, the U.S. dollar share of global foreign reserves rapidly increased as political allies stockpiled the dollar.

By 2000, dollar dominance hit a peak of 71% of global reserves. With the creation of the European Union a year earlier, countries such as China began increasing the share of euros in reserves. Between 2000 and 2005, the share of the dollar in China’s foreign exchange reserves fell by an estimated 15 percentage points.

The dollar began a long rally after the global financial crisis, which drove central banks to cut their dollar reserves to help bolster their currencies.

Fast-forward to today, and dollar reserves have fallen roughly 13 percentage points from their historical peak.

The State of the World’s Reserve Currency

In 2022, 16% of Russia’s export transactions were in yuan, up from almost nothing before the war. Brazil and Argentina have also begun adopting the Chinese currency for trade or reserve purposes. Still, the U.S. dollar makes up 80% of Brazil’s reserves.

Yet while the U.S. dollar has decreased in share of foreign reserves, it still has an immense influence in the world economy.

The majority of trade is invoiced in the U.S. dollar globally, a trend that has stayed fairly consistent over many decades. Between 1999-2019, 74% of trade in Asia was invoiced in dollars and in the Americas, it made up 96% of all invoicing.

Furthermore, almost 90% of foreign exchange transactions involve the U.S. dollar thanks to its liquidity.

However, countries are increasingly finding alternative options than the dollar. Today, Western businesses have begun settling trade with China in renminbi. Looking further ahead, digital currencies could provide options that don’t include the U.S. dollar.

Even more so, if the U.S. share of global GDP continues to shrink, the shift to a multipolar system could progress over this century.

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