Soft power adds to a nation’s brand

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Soft power adds to a nation’s brand

Here in Thailand’s capital as elsewhere in Southeast Asia, the “soft power” presence of “Brand Korea,” from the sounds of Samsung smartphones to Thai students’ emulating Psy’s “Gangnam Style,” is easy to find. Yet a recent trip north to China’s capital city underscores both the limits and opportunities in a nation’s ability to leverage the soft power of its leading companies.

In China’s fourth largest city, Tianjin, just a short high-speed bullet train ride from Beijing, occasional signs of ongoing Chinese protests against Japan and Japanese businesses could still be found last week.

In one striking example, a driver had covered the Toyota logo on his car’s trunk with a small Chinese flag. Another Chinese flag adorned the car’s antenna, perhaps with the owner hoping that would-be vandals would be less likely to take out their anger on the proudly Chinese flag-waving vehicle should public reactions to the ongoing territorial disputes between China and Japan get out of hand.

These and other images bring back memories of Korean consumers’ own complicated relationships with Japanese products - from past boycotts to no-longer-banned imports of Japanese language anime and music - given imperial Japan’s brutal 1910-45 colonization of Korea last century and the inability of some of Japan’s leaders to face up to the past. The ongoing territorial disputes between Korea and Japan also raise the potential for Japanese products being targeted in Korea.

Contrast this with the welcome in Hong Kong and elsewhere in Asia - but not yet Korea, the home turf of Samsung - of the latest smartphone from the iconic American company Apple. In a now familiar ritual, Apple fans queued for hours recently [Sept. 21] in Australia, Hong Kong, Japan and Singapore to purchase the latest iPhone. The response to the new iPhone 5 in parts of Asia compared to that Toyota in Tianjin could not be more different. What links them both, however, are an expanded notion of “soft power” and the risks and rewards of being identified as one of a given nation’s leading companies. The recent situation in China underscores how that close association can also hurt businesses when nationalist sentiments go against them, and serves as a warning to and opportunity for companies from Korea to the United States.

Even as big businesses - fairly or unfairly - become the short-term targets of populist politicians running for election or nationalist crowds driven by sensational media reports, policy makers from Seoul to Washington should not lose sight of the long-term reality that companies and their products, behavior and employees are very much a part of a nation’s brand and “soft power.” With anger towards Wall Street fading, the United States, in particular, has an opportunity to further “rebalance” its world view and extend its ongoing shift in focus to Asia by better supporting and leveraging some of its corporate brand strengths. Essential to this will be recognizing the U.S. business community as an independent but critical partner in the United States’ much-discussed “pivot” eastward to Asia.

Brands such as Microsoft, Coca Cola and McDonalds regularly appear in global rankings of corporate brand value. Essentially, these and other “brand leaders” have been adept at winning over the “hearts and minds” - and wallets and pocketbooks - of the region’s growing middle class.

This “brand gap” between these top U.S. companies and their competitors reflects positively on the United States and its culture of innovation and openness, and an ability, echoing one Apple campaign of years past, to “think different.” Just as some Wall Street firms became a symbol of financial excess, Silicon Valley’s leading companies have become symbols of the United States’ continued strengths in innovation, technology and marketing.

The likes of LG and Samsung are likewise contributing to the rise of “Brand Korea.” The actions of their management, as well as their products and services, also contribute to the nation’s image abroad.

U.S. politicians would be wise to do more to recognize and value the “soft power” contributions of American companies to “Brand USA.” This would include putting an end to rhetoric criticizing business leaders for making the tough decisions that come with deciding where to manufacture and how best to sell and distribute a product profitably, even if it means assembling or manufacturing products in Korea or elsewhere in Asia.

One country that is aggressively trying to close this brand gap with the United States - and even with Korea and its own global brands - is China. In August, Chinese Vice Minister of Industry and Information Technology Yang Xueshan stated that China plans on having 100 “globally influential” brands and 1000 domestically renowned brands by 2015. With “Brand China” too often associated with counterfeit goods, shoddy products or aggressive business practices in Africa or elsewhere in the developing world, the rationale for this focus is understandable.

Developing global brands also will allow Chinese businesses to move up the value chain, and help China further transform its economy from one based on cheap labor and managed exchange rates into a more knowledge-based one. This move also should help Chinese businesses reap a larger share of profits. Chinese companies may well have a near-term challenge in duplicating the success of Korean, Japanese and U.S. global brands given existing perceptions of Chinese business practices and products. The world and China are, however, changing rapidly.

While there is no guarantee that nationalist sentiments in China won’t be directed against America’s best companies or even Korea’s at some point, as they seemingly were recently against Japanese firms, the contributions in soft power to a nation’s reputation by its leading businesses should not be ignored, but nurtured. That, though, will also require businesses to behave responsibly.

* The author, former U.S. ambassador to the Asian Development Bank, is a senior fellow and executive-in-residence at the Asian Institute of Technology, and a managing director with RiverPeak Group. This column was co-authored by Jose B. Collazo, a frequent commentator on Southeast Asia.

by Curtis S. Chin
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