2013 Country RepTrak™ Topline Report

The World’s View on Countries: An Online Study of the Reputation of 50 Countries RepTrak™ is a registered trademark of Reputation Institute. © 2013 Reputation Institute, all rights reserved. Copyright © 2011 Reputation Institute. All rights reserved.

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About Reputation Institute

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1. The Importance of Country Reputation

Why is Country Reputation important?

As in the case of companies, countries also have their own reputation which has influence in various spheres. Countries with a good reputation welcome more tourists

Countries with a good reputation increase exports

Countries with a good reputation improve their public diplomacy

Countries with a good reputation attract FDI

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Countries with a good reputation attract foreign knowledge & talent

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The Reputation Economy applied to Country Reputation

Direct Experiencies

Perceptions

Supportive Behaviors

Value Creation

Country’s Actions & Communications

3rd-party Influences

Stereotypes

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2. Country RepTrak™ Methodology

The Key Indicator of Reputation

Reputation Institute has been measuring reputations rigorously since 1999. Our approach is based on a simplified and standardized model for measuring reputations internationally. The Country RepTrak™ Pulse, the beating heart of the model, is the degree to which people trust, admire, respect and have a good feeling for a place or their emotional bond to the country.

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Country RepTrak™ Model: from Emocional to Rational Underlying the Pulse score are three dimensions that influence perceptions of a country and its reputation, or the rational bond between stakeholder and country. It is the importance of these 3 dimensions which drive country reputation and stakeholder support include Advanced Economy, Appealing Environment and Effective Government.

Emotional Reputation

Rational Reputation Copyright © Reputation Institute. All rights reserved.

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Country RepTrak™ Model: Country Reputation Attributes Country RepTrak™ is a standardized scorecard that measures perceptions of countries based on key performance indicators designed to assess the relative appeal of the country to respondents on 16 characteristics organized into 3 dimensions.

Advanced Economy • Produces high quality products and services • Has many well-known brands • Important contributor to global culture • Technologically advanced • Well-educated and reliable workforce • Values education Appealing Environment • Beautiful country • Enjoyable country • Offers an appealing lifestyle • The people are friendly and welcoming Effective Government • Offers a favorable environment for doing business • Run by an effective government • Has adopted progressive social and economic policies • Responsible participant in the global community • Is a safe place • Operates efficiently

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Country RepTrak™ Model: Reputation & Value Creation Having a strong reputation improves support. An increasingly globalized world with intensified competition makes country reputations matter more than ever. Attracting FDI, tourists, high skilled workforce and being able to sell the products of the country abroad are facilitated by having a strong country reputation. This model shows the correlation between supportive behaviors and external reputation overall for 2013.

I would recommend visiting the country I would recommend living in the country I would recommend working in the country I would recommend investing in the country I would recommend buying products/services originating from the country I would recommend studying in the country

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3. Research Design

2013 Country RepTrak™ Study Overview

• Stakeholder Group (Target): The respondent pool was made of the general public who had to be “somewhat” or “very” familiar with at least one country in the study, balanced to the country population on age and gender, and was also controlled for region. • Country Selection: – Largest economies – Countries of interest due to recent economic, political or natural events. • Data Collection Method : CAWI (online interviews).

• Data Collection Period: From January to March 2013. • Sample: Over 27,000 consumers from G8 countries provided over 34,000 rating based on their perceptions of the 50 nations included in the study.

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4. Country RepTrak™ 2013 Results

2013 Country RepTrak™ – Top 20

1 2 3 4 5 6 7 8 9 10

Canada

76.6

Sweden

76.5

Switzerland

76.3

Australia

76.1

Norway

74.1

Denmark

73.3

New Zealand

72.5

Finland

71.8

Netherlands

70.6

Austria

70.6

11 12 13 14 15 16 17 18 19 20

Germany

68.3

Ireland

67.6

Belgium

67.1

Japan

66.2

UK

65.1

Italy

63.9

France

63.4

Spain

62.0

Portugal

61.6

Singapore

58.3

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

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2013 Country RepTrak™

76.6 76.5 76.3 76.1

74.1 73.3 72.5 71.8 70.6 70.6

68.3 67.6 67.1 66.2 65.1 63.9 63.4

Global mean (54,6) 62.0 61.6 58.3 57.8 57.4 54.9 54.3 53.2 52.7 51.5 51.0 50.7 50.2 49.3

47.4 47.2 47.2 47.0 46.8 46.1 45.8 45.5

43.9 43.7 43.3 40.1

37.8 37.8 36.7 34.0 28.8 22.6

1

2

3

4

5

6

7

8

9

21.2

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

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Country RepTrak™ in recent years – Top 10 2012

2013

1 2 3 4 5 6 7 8 9 10

2010

2011

2009

Canada

Canada

Canada

Sweden

Switzerland

Sweden

Australia

Sweden

Canada

Canada

Switzerland

Sweden

Australia

Australia

Australia

Australia

Switzerland

Switzerland

Switzerland

Sweden

Norway

Norway

New Zealand

Norway

Norway

Denmark

New Zealand

Norway

Finland

Finland

New Zealand

Finland

Denmark

Denmark

Denmark

Finland

Denmark

Finland

Austria

Netherlands

Netherlands

Austria

Austria

Netherlands

Austria

Austria

Netherlands

Netherlands

Belgium

Spain

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Country RepTrak™ in recent years (1-25)

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

Very poor 17

Country RepTrak™ in recent years (26-50)

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

Very poor

Excellent 18

Evolution of Country RepTrak™ in the last year

Italy 7.7% Portugal 7.3%

Greece 8.5%

Pakistan 7.5%

Saudi Arabia 8.3%

Nigeria 7.3%

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

Evolution 2012-2013 19

Evolution of Country RepTrak™ in the last year

Spain -2.2% UAE -2.7% China -5.0%

India -2.5%

Argentina -2.4%

South Africa -1.7%

Scoring scale: 0-100 All score differences > 1.6 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

Evolution 2012-2013 20

2013 Country RepTrak™ - Internal Reputation (Self-Image)

Global mean (70,2)

91.0 84.8 75.9

74.6

71.0

70.9

69.9

69.3

69.0

67.6

67.2

64.6

61.9

60.5 54.8

Australia

Canada

India

Germany

Japan

the United Russia Kingdom

China

United States of America

Mexico

Brazil

France

South Korea

Italy

Spain

Scoring scale: 0-100 All score differences > 2.3 are significant at 95% confidence interval Copyright © Reputation Institute. All rights reserved.

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Gap between Internal and External Reputation Countries with a major gap between internal (self-image) and external perceptions

33.2

31.4 25.3

20.6 14.9

14.7 11.6 9.4

8.2 6.3

5.8

4.8 1.2

-3.5 -7.3 Russia

China

India

Mexico

Countries least critical of themselves

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Australia

South Korea

United States of America

Brazil

Canada Germany the United Kingdom

Japan

France

Italy

Spain

Countries most critical of themselves

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Key Factors in Reputation: Dimension & Attribute Weights

27.3%

35.5%

35.3%

27.9%

36.8% Adj R2 = 0.656 N = 42360

37.1% Weights 2012 Copyright © Reputation Institute. All rights reserved.

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Reputation Profile of Countries (Dimensions)

#1

Switzerland

Effective Government 80

Sweden Canada Egypt

60

Haiti Greece

40

Countries with a good reputation present a balanced reputation profile

20

0

Appealing Environment

#1

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Countries with a bad reputation have a more uneven profile

Advanced Economy

#1

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Key Factors in Reputation: Dimension & Attribute Weights

Effective Government 36.8%

Appealing Environment 35.3%

Advanced Economy 27.9%

Safety International Participation Institutional Environment Social & Economic Policies Efficient Use of Public Resources Business Environment

7.8 7.1 6.8 6.5 6.4 5.8

Friendly & Welcoming People Appealing Lifestyle Enjoyable Country Beautiful Country

8.1 7.1 6.7 6.4

High Quality Products & Services Culture Well-Educated & Reliable Workforce Well-Known Brands Values Education Technology

5.9 5.6 5.2 5.1 5.0 4.5

-0.4

+0.5

Adj R2 = 0.681 N = 42360

Evolution 2012-2013 Copyright © Reputation Institute. All rights reserved.

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Country RepTrak™ Attributes – Top 10 6.4%

Beautiful Country Switzerland

Italy

84.1

Australia

Sweden

81.4

Spain

Norway

81.4

Sweden

80.6

Denmark

Austria

80.6

New Zealand Japan

79.0

7.1%

Appealing Lifestyle Switzerland Australia Sweden

77.3

Canada

77.1

Norway

76.0

Denmark New Zealand

75.6 74.4

77.7 77.4 76.6

Austria

80.8

Ireland Finland

78.3

Canada

81.7

New Zealand

79.1

Switzerland

82.3

Italy

80.2

Australia

83.8

Canada

6.7%

Enjoyable Country

76.2 76.0 74.2 73.9

8.1%

Friendly & Welcoming People

79.0

Australia

78.9

Canada

77.0 76.3

Sweden

76.0

Italy

75.9

Denmark

74.8

New Zealand

74.5

Norway

74.0

Italy

74.0

Switzerland

73.9

the Netherlands

73.9

the Netherlands

73.9

Austria

73.8

Spain

73.4

Weights Copyright © Reputation Institute. All rights reserved.

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Country RepTrak™ Attributes – Top 10 5.8%

Business Environment Switzerland Sweden Canada Australia Denmark Germany Norway Austria the Netherlands Japan

78.1

Switzerland Sweden Denmark Canada Australia Norway Germany Finland the Netherlands New Zealand

74.5 74.4 73.4 73.3 72.0 71.6 71.2 70.9 70.7

6.5%

Social & Economic Policies Sweden Switzerland Denmark Norway Canada the Netherlands Finland Australia Germany Austria

77.3

72.3 72.0 71.2 70.9 69.7

7.8%

Safety Switzerland Canada Sweden Denmark Norway Austria Finland Australia the Netherlands New Zealand

80.1 77.2 77.0 76.4 75.8 74.6 74.6 74.5 73.3 73.1

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77.1

75.2 73.4 73.0 72.9 72.4 71.3 70.5 70.5 69.1

7.1%

International Participation Sweden Canada Switzerland Denmark Australia Norway Germany Finland the Netherlands New Zealand

75.6 75.0 73.9 73.7

6.8%

Institutional Environment

74.8 73.5 72.5 72.5 71.6 70.5 70.2 69.1 68.7 68.6

6.4%

Efficient Use of Public Resources Switzerland Sweden Norway Denmark Australia Canada Finland Germany Austria the Netherlands

74.8 73.4 71.1 71.0 70.5 70.3 70.2 69.1 68.7 68.2

Weights 27

Country RepTrak™ Attributes – Top 10 5.9%

High Quality Products & Services Switzerland Japan Germany Sweden Canada Denmark Norway Australia the Netherlands Austria

72.8 72.5 71.4 69.9 69.5 69.4

5.6%

Culture Italy Germany Sweden France the United Kingdom United States of America Switzerland Austria Denmark Australia

5.2% 78.2

77.2 76.8 75.1 74.8 73.8 73.7 72.9 72.7 72.6

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79.5 76.2 75.0 74.4 72.5 71.3 69.4 68.5 66.6 66.4

4.5%

Technology Japan Germany United States of America Switzerland Sweden Canada Denmark Finland Norway Australia

74.6 72.5 72.4 72.1 71.4 71.1 70.4 70.1 69.6 69.2

Well-Educated & Reliable Workforce Switzerland Sweden Japan Canada Denmark Norway Germany Australia Finland Austria

Japan United States of America Switzerland Germany Italy Sweden France the United Kingdom Denmark Canada

77.6 76.9 76.2 75.2

5.1%

Well-Known Brands

81.0 73.5 73.3 72.0 71.7 70.7 68.5 68.3 68.2 66.7

5.0%

Values Education Switzerland Sweden Denmark Japan Canada Norway Germany Australia Finland Austria

78.0 77.4 75.4 75.4 75.3 75.2 74.5 73.1 72.9 72.6

Weights 28

Value Creation: Reputation & Declared Willingness Visit 0.71 Invest 0.74 Live 0.77

Work 0.76 Buy 0.76

Study 0.75 Copyright © Reputation Institute. All rights reserved.

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Supportive Behaviors towards Countries – Top 10

Visit

Invest

Switzerland

80.8

Switzerland

Italy

80.8

Canada

Canada

Denmark

New Zealand

77.3

Japan

77.1

Austria

76.5

Key Drivers Beautiful Country Enjoyable Country Friendly & Welcoming People

64.6 63.5 63.4 63.1

Key Drivers Business Environment Efficient Use of Resources Technology

Live Canada

73.1

Australia

72.7

Switzerland

72.4

Sweden

70.8

New Zealand

68.7

Norway

68.7

Denmark

68.6

Austria

66.8

the Netherlands Germany

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64.8

Denmark

77.4

Spain

66.6

Norway

77.9

Austria

67.5

Germany

78.7

Norway

67.9

Sweden

80.1

Sweden

New Zealand

Australia

80.3

Australia

71.7 68.3

66.4 64.9

Key Drivers Appealing Lifestyle Safety International Participation

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Supportive Behaviors towards Countries – Top 10

Work

Buy

Switzerland

Switzerland

74.5

Canada Australia

71.2

Sweden

Sweden

71.2

Canada

Norway

68.3

Denmark

68.1

Austria New Zealand the Netherlands

73.3 71.5 70.9

Denmark

69.7

Australia

69.6

67.3 66.8

Italy

69.1

Norway

69.1

Finland

65.7

Key Drivers Safety Appealing Lifestyle Business Environment

74.2

Japan

69.2

Germany

75.0

Germany

73.6

67.8

Key Drivers High Quality Products & Services Well-Known Brands Friendly & Welcoming People

Study Switzerland

73.3

Canada

73.3

Australia

71.6

Sweden

70.9

the United Kingdom

70.2

Germany

69.8

Austria

68.9

Norway

68.5

Denmark

United States of America

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68.3 66.4

Key Drivers Safety Values Education Culture

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4. The Economic Impact of Country Reputation

Reputation & Reality: a Balance between Management & Communication

Communication is required to capitalize on good reality and overcome poor perceptions

Opportunity

REALITY

Good

Change is required to alter ’reality’ and minimize reputational risk

Bad

Risk Bad

Good

PERCEPTION

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Reputation & Reality: Country Reputation & Competitiveness When comparing actual data obtained from real-world measurements, such as the competitiveness of countries, with data on their reputations, the result is this matrix.

2013 Competitiveness Index

Communication Opportunity

It shows that certain countries have a strong communication opportunity, while others find themselves in a position of reputation risk. Reputational Risk

2013 Country RepTrak™ *Based on IMD World Competitiveness Yearbook (WCY) 2013 Copyright © Reputation Institute. All rights reserved.

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Reputation & Reality: Country Reputation & Tourism According to the analysis carried out by Reputation Institute, it is clear that there is a demonstrated correlation between the reputation of a country, and the income received from tourism.

Country Reputation

Intention to Visit

0.7

Tourism ($)

0.6

*Based on World Bank data. *Pearson correlation..

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Reputation & Reality: Country Reputation & Risk Premium Countries with a good reputation have maintained a stable risk premium since the beginning of the financial crisis, while countries with poor reputations have seen the risk premiums they pay rise by up to 1000%. 1100

Country Risk Premium

900

700

500

300

100

-100 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13

Time (date)

*Based on World Bank data.

Set of countries with weaker reputations (China, India, USA, Poland & Greece) Set of counties with stronger reputations (Canada, Sweden , Norway, Switzerland & Australia) Copyright © Reputation Institute. All rights reserved.

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Reputation & Reality: Country Reputation & Risk Premium Countries with a good reputation have maintained a stable risk premium since the beginning of the financial crisis, while countries with poor reputations have seen the risk premiums they pay rise by up to 300%. 1100

Country Risk Premium

900

700

500

300

100

-100 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13

Time (date)

*Based on World Bank data.

Set of countries with weaker reputations (China, India, USA & Poland) Set of counties with stronger reputations (Canada, Sweden , Norway, Switzerland & Australia) Copyright © Reputation Institute. All rights reserved.

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5. About Reputation Institute

About Reputation Institute Reputation Institute is the world’s leading reputation-based advisory firm, founded by Dr. Charles Fombrun and Dr. Cees van Riel in 1997. We enable many of the world’s leading companies to make more confident business decisions that build and protect reputation capital and drive competitive advantage. Our most prominent management tool is the RepTrak® model for analyzing the reputations of companies and institutions – best known via the Forbes-published Global RepTrak® 100, the world’s largest study of corporate reputations. Businesses and executives regularly discover best practices in reputation management by affiliating with our Knowledge Center and participating in its learning programs and networking events. Reputation Institute has offices and associates in 30 countries around the world. For more information, visit: www.reputationinstitute.com • For country specific results: [email protected] • For more information, visit: www.reputationinstitute.com/contact-us • To find your local office please visit our website: www.reputationinstitute.com/contact-us

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Australia · Argentina · Belgium · Brazil · Canada · Chile · China · Colombia · Croatia · Denmark · Ecuador · Finland · France Germany · Greece · India · Ireland · Italy · Japan · Malaysia · Mexico · Netherlands · Norway · Panama · Peru · Portugal Puerto Rico · Russia · South Africa · Spain · Sweden · Switzerland · Turkey · UAE · United Kingdom · United States · Ukraine Copyright © Reputation Institute. All rights reserved.

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