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Brand Value Included in UN’s Global Innovation Index for the First Time

02 September 2020
  • Just published, the 2020 iteration of the Global Innovation Index includes a brand value metric for the first time in the history of the study
  • Brand Finance’s ISO-certified database of the world’s top 5,000 brand values has been used to create the new measure
  • Collaboration between UN’s WIPO and Brand Finance demonstrates international recognition of the importance of brands for value creation
  • Hong Kong SAR has emerged as the leading economy globally in the new brand value metric - as well as the leading region across the nation – with the highest global brand value scaled by GDP (at PPP$)

View the GII 2020 report here

For the first time in its 13-year history, the renowned Global Innovation Index includes brand value as one of its core indicators. The study uses findings from the ISO-certified database of the world’s top 5,000 brands compiled annually by Brand Finance, the world’s leading independent brand valuation consultancy.

Published by the World Intellectual Property Organization (WIPO), a specialised agency of the United Nations (UN), the GII provides detailed metrics about the innovation performance of 131 countries and economies around the world. Its 80 indicators explore a broad vision of innovation, including the political environment, knowledge and technology, infrastructure, business sophistication, and now also brand value.

The results of Brand Finance’s public study on the world’s 5,000 most valuable and strongest brands have been used to create a novel GII indicator in 2020. The values of all the top brands of each economy are summed and scaled by gross domestic product (GDP). The indicator captures the contribution of brands as intangible assets to innovation in an economy. It takes place among the metrics capturing an economy’s creative outputs, and adds a new dimension to the assessment of the world’s most innovative economies as captured by the GII.

Hong Kong SAR has emerged as the leading economy globally in the new brand value metric - as well as the leading region across the nation – with the highest global brand value scaled by GDP (at PPP$). Relative to the size of its economy, Hong Kong SAR is the most successful region at developing valuable brands, and this is a clear indicator of what is likely to happen across Mainland China, which currently ranks 17th on the same metric.

Experts predict that China’s GDP will overtake the US’s by 2030. In contrast, Brand Finance's analysis of the performance of the world's most valuable brands over the last decade suggests that should China continue on this trajectory the nation will overtake the US in total brand value by 2025.

David Haigh, CEO of Brand Finance, commented:

“A nation’s brands are crucial drivers of both economic growth and economic development. Taking China as an example, we are witnessing the nation make significant strides in the development of home-grown brands, including TikTok and Huawei, and without a doubt the number of leading brands is going to continue to grow. If this accelerates, we at Brand Finance have predicted that China is likely to overtake the US as the leading economy globally by brand value by 2025.”

A leading reference for measuring an economy’s innovation performance, the GII ranking has grown to become the global benchmark for government and business leaders, facilitating public-private dialogue and helping practitioners and experts to credibly evaluate innovation progress worldwide on an annual basis. The inclusion of brand value among the GII indicators demonstrates international recognition of the importance of brands for value creation, especially in supporting economic recovery, and the growing consensus around the need for reliable and independent intangible asset valuation.

David Haigh, CEO of Brand Finance, commented:

“After 25 years of pioneering the discipline of brand valuation, Brand Finance is proud to partner with WIPO to create this exciting and important new measure of innovation. Brands create value and will help lead the world economy out of the recession caused by COVID-19. There has never been a more important time to recognise the role of brands.”

Sacha Wunsch-Vincent, GII Co-Editor and Head, Section, Department for Economics and Data Analytics, commented:

“Innovation and branding go hand in hand; brands are indeed a key way for firms to secure returns on their R&D investments. We are happy that the GII 2020 now captures this important branding and intangible asset dimension. “

Following the launch of the GII, David Haigh will be presenting at the International Advertising Association’s upcoming Creativity4Better Global Virtual Conference to discuss Brand Finance’s new “Why Brands Matter” report launching the IAA’s campaign demonstrating the role of brands as the engine of post-COVID recovery.

View the GII 2020 report here

ENDS

Note to Editors

Analysis on the new brand value metric

Hong Kong SAR has emerged as the leading economy globally in the new brand value metric - as well as the leading region across the nation – with the highest global brand value scaled by GDP (at PPP$). Relative to the size of its economy, Hong Kong SAR is the most successful at developing valuable brands, and this is a clear indicator of what is likely to happen across Mainland China, which currently ranks 17th on the same metric.

With world-renowned confectionary, watchmakers, and financial services, Swiss brands have emerged as global leaders in quality and excellence. Swiss giant Nestlé, for example, has produced several brands that are now household names. Switzerland has one of the world’s best regimes globally for the protection of intellectual property - a key factor in promoting innovation and building successful brands. Additionally, strong controls over the use of the ‘Swiss made’ mark has also allowed qualifying Swiss brands to differentiate themselves and leverage their nation’s reputation effectively.

Several small and successful economies like Sweden, the Netherlands, and Malaysia emerge amongst the top ranks for economies that produce the most valuable brands.

Brand Finance’s analysis in Fig1. illustrates how economies stack up in terms of their rank based purely on brand value, compared to brand value relative to GDP.

Economies that fall above the trendline are those that are most successful in developing brands in proportion to their size. Economies that fall below the trend line are those where the brand value to GDP ratio is lower than what is expected for the size of the economy. For instance, large and fast-growing BRIC nations fall below the line, suggesting that their rank on global brand value relative to the size of their economies leaves significant potential for the growth of home-grown brands. China and India especially, have been encouraging the development of brands on home soil, over the previous few years, a trend further advanced by COVID-19. As demand for these brands increases, nations will need to ensure they are equipped to facilitate effective and efficient innovation to ultimately support the development of successful global brands.

About Brand Finance

Brand Finance is the world’s leading independent brand valuation consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands.

Every year, Brand Finance values the world’s top 5,000 brands. The findings of this annual study are made available to the public on Brandirectory.com through nearly 100 rankings and reports on the most valuable and strongest brands across all sectors and countries.

Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671. Brand valuations performed by Brand Finance have since been certified by independent auditors as compliant with both ISO standards.

Brand Finance’s brand valuation methodology has also been certified by the United States’ Marketing Accountability Standards Board (MASB) through the Marketing Metric Audit Protocol (MMAP), the formal process for validating the relationship between marketing measurement and financial performance.

Brand Finance is a chartered accountancy firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).

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