Bloom Consulting is proud to introduce the first-ever study on the impact of Nation Brands and City Brands on local and global economies.
This research was carried out in collaboration with City Nation Place and guided by an Advisory Board for Scientific Supervision, which includes experts from Universitat Pompeu Fabra, Universitat Autònoma de Barcelona, and Universidad de Salamanca. Over 100 countries and cities participated in this groundbreaking study:
Perceptions (Nation or Place Brand) account for approximately a quarter of the total transaction value for tourism, FDI inflows, and talent attraction. In other words, for every $1,000 a country or city attracts via tourism or foreign direct investment, approximately $250 is directly linked to perception.
If we extrapolate this calculation to the global economy, this means a total of $934 billion, which is approximately 1% of global GDP. To put this figure into context, it is comparable to the total size of the renewable energy market or the entire creative economy sector.
The Bloom Consulting study also demonstrated (Chapters 3.2 and 4.1) that on a global average if a Country or City improves its perception by 0.1 on a scale from 0 (extremely negative) to 5 (extremely positive), it would hypothetically represent an increase in tourism receipts by 12%, a rise of USD 1.24 billion. Similarly, a 0.1 increase in a city’s perception would hypothetically boost tourism receipts by 17%, equivalent to USD 0.97 billion.
The same logic applies to foreign direct investment (FDI), with similar ratios found. Talent attraction, however, is the most impacted “Dimension”, where a 0.1 increase in perception would hypothetically yield an 18% increase in migration for Countries, an additional 0.36 million expatriates. Similarly, a 0.1 improvement in perception would hypothetically lead to a 24% increase in migration for Cities, resulting in an additional 0.10 million expatriates.
Here is the summary of the findings
- Perception (The Nation or Place Brand) accounts for 24% and 23% of tourism receipts for a Country and a City, respectively.
- Similarly, perception impacts 24% of foreign direct investment inflows in a Country and 37% in a City.
- Regarding Talent, perception explains approximately 26% and 22% of the net migration population for a Country and a City, respectively.
Conclusion
This calculation can be of extreme value for Countries and Cities to use as a Key Metric to assess how much their Nation Brand or City Brand (Perception) is impacting or contributing to their economy. Comprehending the intricate interplay between perceptions and economic impact holds paramount importance for governmental bodies, tourism authorities, IPA’s, talent attraction entities and the private sector. This understanding facilitates strategic actions, activities, and policies in alignment with prevailing perceptions, precise economic gain projectors, and competitive positioning.
The report is free to use for everyone by downloading it here:
Full study: The Impact of Nation and Place Brands on the Local and Global Economy
Addendum: The Impact of Nation and Place Brands on the Local and Global Economy
Published on 22.10.2024.
