Wharton’s David Reibstein explains the latest rankings of the Best Countries report from U.S. News & World Report
The best country in the world is not the United States, according to the recently-released 2018 Best Countries report from U.S. News & World Report. In fact, the U.S. didn’t even make the top five. It’s ranked number 8, beat out by Switzerland, Canada, Germany, the U.K., Japan, Sweden and Australia, in that order.
The rankings were determined by more than 21,000 people in 36 countries in the Americas, Asia, Europe, and the Middle East and Africa. The group was reportedly a mix of “informed elites,” business decision-makers and the general public.
Participants were asked about their perceptions of 80 countries in over 60 different topic areas: from business-friendliness, political power and military might to quality of life, environmental responsibility, cultural heritage, concern for human rights and desirability as a vacation spot. The study is a partnership of U.S. News & World Report, Y&R’s brand strategy firm BAV Group and Wharton.
When the Best Countries report debuted in 2016, America didn’t garner the top spot either (Germany did), but at least it made number 4. Last year it fell to seventh, and now it’s slipped another notch. Wharton marketing professor Dave Reibstein, the study’s co-developer who presented the new findings at last month’s World Economic Forum meeting in Davos, traces last year’s further decline partly to the 2016 U.S. presidential election, although not necessarily to the outcome. “Some of the impact might have been because it was a very vitriolic campaign.”
But in discussing the current results, he noted that many aspects of the Trump presidency’s first year have negatively affected opinions about the U.S. The country is perceived to be less connected to the rest of the world, and “as we harp on the theme of ‘America First,’ that is an overt effort to be less connected.”
Reibstein discussed key takeaways from the 2018 Best Countries report on the Knowledge@Wharton show on Sirius XM channel 111. (Listen to the podcast at the top of this page.)
Of the nine sub-rankings in the report — Adventure, Citizenship, Cultural Influence, Entrepreneurship, Heritage, Movers, Open for Business, Power and Quality of Life — America is getting especially bad reviews when it comes to Open for Business. It ranks a poor 43rd among the 80 countries included and has plunged 20 places since the 2016 study came out. Reibstein said that while the President stated at Davos that America is “open for business,” his administration’s policies suggest otherwise.
“As we harp on the theme of ‘America First,’ that is an overt effort to be less connected to the rest of the world.” –David Reibstein
“Clearly what [the U.S. is] trying to do is, we’re going to take our manufacturing plants away from you; we’re going to put them here in the United States so we’re going to do less investing there. And it’s not clear how open we are for others to build their plants within our country.” He anticipates that foreign direct investment will decline.
Reibstein also stated that the U.S. is increasingly viewed as politically unpredictable and less democratic than before. Drilling below the main sub-rankings, one sees that America scored only a 3.5 out of 10 on the attribute of being “politically stable,” and only 4.1 when it came to having “well-distributed political power.” It completely tanked when it came to income equality, only achieving a 1.4.
The U.S.’s lackluster rankings may come as no surprise to those keeping an eye on the news. A poll from the nonpartisan Pew Research Center last summer reported that the U.S.’s image was suffering because Trump’s policies were broadly unpopular worldwide. A number of factors may be contributing, including the U.S.’s announced withdrawal from the Paris climate agreement and Trump’s frequent criticism of NATO. There’s also been a widely reported significant decline in foreign tourism to America (some labeling it the “Trump Slump” although it’s been pointed out that the strong U.S. dollar may also be to blame).
It doesn’t help either, Reibstein added, that the President has repeatedly attempted to impose travel bans on citizens from certain nations. “Backlash against the travel ban order in February 2017 and subsequent media attention are having a lasting impact on America’s image.”
While the president stated at Davos that America is “open for business,” his administration’s policies suggest otherwise. –David Reibstein
America does continue to rank above all nations in the Power category, meaning it is seen as a leader and is economically and politically influential with a strong military. It also continues to score high (number 3) in Entrepreneurship and in Cultural Influence.
What Creates a Nation’s Brand?
Switzerland was ranked as the best country in the world both this year and last year. Reibstein comments on the country’s reputation for neutrality, and says Switzerland is seen as very safe, very equitable and a great place to do business. It received high marks for many different dimensions, from trustworthiness to environmental responsibility. Perceptions of a nation’s brand are partly shaped by the products and services associated with it: In Switzerland’s case, it’s banks. “It’s sort of recursive: Credit Suisse’s brand helps Switzerland; Switzerland’s brand helps the bank.”
In the case of Germany, ranked third-best country this year, Reibstein said, “I think Germany got its reputation largely on the shoulders of [its] automotive industry,” citing the aura of high quality surrounding car makers including BMW, Audi and Porsche.
Well-known individuals associated with certain countries can also color a nation’s brand and affect its world standing. This year for the first time, the Best Countries report measured net approval ratings of prominent world leaders and CEOs. Out of 14 individuals included, Donald Trump occupied the very bottom at -33%, followed by the Philippines’ Rodrigo Duterte and Russia’s Vladimir Putin who tied each other at -11%. Canada’s Justin Trudeau was the most favored world leader at 52% (Canada maintained its number 2 country spot this year.) Overall, business leaders were viewed in a better light than political leaders. For example, Google’s Eric Schmidt and Amazon’s Jeff Bezos earned 55% and 52% net approval percentages respectively.
“It’s sort of recursive: Credit Suisse’s brand helps Switzerland; Switzerland’s brand helps the bank.” –Dave Reibstein
What’s at Stake?
What other countries think of your country can have a big impact, Reibstein asserted. Hanging in the balance are key economic factors including foreign direct investment, foreign trade and tourism. So it’s in a nation’s best interest to try to improve its brand.
Reibstein described giving a presentation of the Best Countries findings to a large audience in Israel, a nation ranked only number 30 overall and placing lower than 60th in Open for Business and in Adventure (the latter category including attributes like “friendly, fun, pleasant climate, scenic, sexy”). According to Reibstein, a heckler shouted, “Are your respondents blind?” He answered, “You have left them in the dark…. It is you and your country’s responsibility to try and change some of those perceptions.”
But while marketing can help improve a country’s image, it can’t do the job by itself. In Reibstein’s view, promotional efforts must be backed up by meaningful improvements and by people’s actual experience of the country and its products. During a recent talk in China, Reibstein was questioned by an individual who identified himself as overseeing China’s brand. “We’ve been spending lots of money advertising on CNN and we see no impact,” the official said, adding that he didn’t think actively improving a country’s brand was possible. Reibstein said he told him, “You can spend money advertising, but if [for example] you make unreliable products of poor quality, you’re not going to be able to advertise your way out of it.”
Reibstein has been approached by a number of government representatives since the inception of the Best Countries rankings. “I received a phone call from Kazakhstan, saying, ‘We need to worry about our image.’ I was contacted by the Minister of Finance of Saudi Arabia, who recognizes that Saudi Arabia’s brand is not what they would like it to be, and that it will affect their economy.” Sometimes a country’s secretary of commerce or foreign trade will get in touch, or the bureau of tourism.
He said, though, that no one from the United States government has reached out, which he finds “interesting.” Reibstein recalled a dinner event in Washington, D.C. last year at which he presented the 2017 Best Countries findings to 20 foreign ambassadors and other dignitaries. He noted that he was seated next to “the head metrics guy for Trump…. I said, I’ve got all this data, I would be glad to share it with you. Here’s how to reach me.” But it’s been more than a year and he hasn’t heard anything.
Reibstein offered thoughts about the current administration’s lack of response. “Some of it is, we don’t care what the rest of the world thinks. Some of it is, we already think of ourselves as great, so why bother messing around with what anybody else might measure.”
Article by Knowledge@Wharton