29 February 2024, BUCHAREST – Romania has increased its Soft Power score and bounced back 6 places to 58th in the global ranking, according to a new report from Brand Finance, the world's leading brand valuation consultancy.
Romania’s increase in Soft Power is underscored by a 10-rank jump in the Reputation pillar to rank 57th position globally, and a 22-rank jump in Influence to take 59th position globally. These promising increases are largely driven by Romania’s improved performance in the Business & Trade, Governance, and Culture & Heritage pillars.
The latest edition of the report found that – at a time of global uncertainty and instability – economic attributes such as 'strong and stable economy' and 'products and brands the world loves' emerge as key drivers of influence and reputation on the global stage. Romania has climbed 15 places for having ‘products and brands the world loves,’ indicating that Romanian products and brands are becoming more widely recognised and influential in the global economic sphere. Moreover, Romania’s growing reputation as a global economic player is underscored by an 8-rank jump to 65th globally for the attribute ‘strong and stable economy,’ and 15-rank jump to 17th position globally for ‘future growth potential.’
Improved global perceptions of Romania’s Governance and social order have also bolstered its performance, up 8 ranks in the attribute ‘safe and secure.’ In recent years, Romania has seen declining crime rates and strengthened law enforcement, cultivating an increased sense of security for both citizens and visitors alike.
Romania is also making significant strides in cultural perceptions, up 10 ranks to 63rd for Culture & Heritage, including a 12-rank jump for its ‘rich heritage.’ These positive scores indicate that Romania is becoming increasingly perceived on a global stage for its unique heritage, including its rich history and vibrant cultural scene.
As the world continues to combat the effects of global climate change, Romania is also showing significant improvement in the Sustainable Future pillar. The nation climbed 29 ranks for the attribute, ‘acts to protect the environment,’ and 32 ranks for its ‘global efforts to counter climate change.’ As well as continuing to champion renewable energy sources, Romania has been incentivizing the shift to electric vehicles. This initiative has proven to be hugely successful amongst citizens, as evidenced by a significant increase in the number of registered electric vehicles in Romania in 2022 and 2023.
Mihai Bogdan, Managing Director, Brand Finance Romania, commented,
“The increase in Romania’s Soft Power ranking this year (reapproaching its best position from 2022, when it ranked 50th) is a testament to its enhanced reputation and growing influence on the global stage. The nation’s climb is due to improvement across several attributes, notably its strengthened economic position, unique cultural exports, and enhanced visibility around the nation’s sustainability efforts. These factors are collectively contributing to boosted perceptions of Romania’s nation brand, both domestically and internationally.”
Elsewhere, the United States and the United Kingdom are the most influential soft power nations in the world, China is ranked 3rd, surpassing Japan and Germany.
Brand Finance publishes the Global Soft Power Index based on a survey of more than 170,000 respondents from over 100 countries to gather data on global perceptions of all 193 member states of the United Nations. Thanks to the scope of the survey, the Index is the world’s most comprehensive study on perceptions of nation brands, providing an in-depth analysis of the evolving status of soft power as nations navigate significant global changes and challenges.
Soft power is defined as a nation’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics, etc.) through attraction and persuasion rather than coercion. Each nation is scored across 55 different metrics to arrive at an overall score out of 100 and ranked in order from 1st to 193rd.
Key Findings of the Global Soft Power Index 2024:
The report has found that at a time of global uncertainty and instability, economic credentials are increasingly important contributors to a nation’s soft power. Nation brand attributes such as 'strong and stable economy' and 'products and brands the world loves' emerge as key drivers of influence and reputation on the global stage. This trend explains the continued dominance of the world’s largest economies like the USA and China as well as smaller developed economies like Switzerland and the United Arab Emirates at the top of the ranking. Dominant nation brands are recording faster soft power growth (average +3.1 points in the top 50) than the rest of the ranking (average -1.3 for those ranked 51-193).
David Haigh, Chairman & CEO of Brand Finance commented:
“The Global Soft Power Index 2024 underscores the complex interplay between global events and economic shifts in shaping soft power. As nations navigate these dynamics, the importance of a strategic approach to nation branding, supported by perceptions research and financial analysis, becomes increasingly evident.”
The United States leads the rankings with an all-time highest Global Soft Power Index Score of 78.8, an increase from 74.8 in 2023, and earning the top spot for Familiarity and Influence, among other key metrics. However, internal security challenges around gun violence and police brutality as well as involvement in international conflicts seem to be undermining some of its nation brand perceptions, as evidenced by continued rank declines on ‘great place to visit’, ‘good relations with other countries’, ‘safe and secure’, and ‘friendly’ where the USA has dropped a further 9 places to 112th.
The United Kingdom has overcome a soft power risk from temporary instability in late 2022 resulting from tumultuous government changes and the passing of Queen Elizabeth II. This year, the UK ranks 7th in ‘strong and stable economy’ compared to last year’s 12th and improves on ‘politically stable and well governed’ up to 12th from last year’s 16th. The nation’s Global Soft Power Index Score of 71.8 continues an upward trend from 67.3 in the previous year. Like the USA, as the UK is set for a general election this year, it will be interesting to see how the results impact its soft power.
China replaces Germany at the 3rd position in the soft power rankings, improving its overall score by +6.2, from 65.0 to 71.2 – faster than any other nation brand in the Global Soft Power Index this year. This rise is driven by a significant improvement in China’s perceptions across key Business & Trade and Education & Science metrics.
Germany fell to 5th position, after earning top ranking in 2021, and 3rd place in both 2022 and 2023. Germany has experienced stagnation and in many cases erosion in perceptions across the board this year, with a substantial drop of 14 positions in 'good relations with other countries' compared to 2023, along with decreases in helpful to countries in need' and measures of trustworthiness. Nevertheless, Germany achieved the top rank in Governance and, despite some score declines, remains among the leaders in the pursuit of a Sustainable Future.
India, Brazil, and South Africa struggle to fulfil their soft power potential, as all three nations have relatively high Familiarity and Influence, especially in their home regions, but rank lower for Reputation. India fell to 29th place, the highest ranked Latin American nation brand Brazil stagnated in 31st, and Sub-Saharan Africa ranking leader South Africa dropped to an all-time low in 43rd place.
With the ranking extended to cover all 193 member states of the United Nations, Monaco is the highest-ranked new entrant at 42nd. The world’s lowest-ranked nations are small Pacific Island nations Vanuatu (191st) Nauru (192nd) and Kiribati (193rd) - each limited in influence by population, geography, and economic factors.
Hard power harms soft power. Russia, Ukraine, and Israel have all ranked lower this year as respondents appear to downgrade countries engaged in military action. Russia continues to fall in soft power rankings, down three places to an all-time low of 16th. While Ukraine is down seven places to 44th, the nation continues to be ranked higher than at any time before Russia invaded. Israel has fallen five ranks to an all-time low ranking of 32nd.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
