Brand value included in UN’s Global Innovation Index for the first time
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 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, Brand Finance: “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: “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: “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.