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Trading identities: Why countries and companies are becoming more alike

[Cover of Trading identities: Why countries and companies are becoming more alike]

Wally Olins

October 1999

Companies and Countries are changing fast - and they are becoming more like each other.

As countries develop their 'national brands' to compete for investment, trade and tourism, mega-merged global companies are using nation-building techniques to achieve internal cohesion across cultures and are becoming ever more involved in providing public services like education and health.

As companies and countries each adopt techniques which have been second nature to the other, Wally Olins asks what these cross-cutting trends mean for the new balance of global power. He explains why global companies are de-emphasising nationality, but seeking popular legitimacy by 'talking soft' about their social impact and community involvement, while governments are increasingly talk about performance indicators and hard statistics.


CONTENTS

1.Introduction: Trading Identities

Part One. Countries: From nation-state to national brand?

2.The long history of branding

3.New pressures on the nation-state

4.Branding a modern nation: successes and failures

5.Putting the unknown nation on the map

6.How to brand a country: a seven-step plan

Part Two. Companies:The global rise of the corporate state?

7.From national champions to corporate patriotism

8.The ethics of business: why global companies are public property

9.Is the corporation becoming a state?

10.Conclusion:The world in 2050 - will we be able to tell countries and companies apart?


More about this pamphlet

Wally Olins on the themes of trading identities:

Countries and companies are becoming more alike – sometimes even swapping roles. Countries are branding themselves; companies are building "corporate patriotism". Countries use businesspeak – growth targets, education targets, health targets; while companies emphasise soft issues, their value to society, and their benevolent influence. Countries are down-sizing and privatising; Companies are starting to deliver welfare services. What's going on?

In the past, countries dominated companies. Many companies like Sony in Japan and Coca-Cola in the US have derived their personality and strength from their national origins. But the traditional relationship between countries and companies is breaking down because more and more global companies become economically stronger than many nations. Today 46 out of the top 100 economies are companies (the global sales total of the Ford Motor Company in 1998 was greater than the GDP of Greece, Ireland and Luxembourg combined) and Bill Gates' personal wealth is said to be worth more than 135 countries.

Furthermore, as companies become bigger and more powerful, they are far more footloose than ever before - no longer constrained by national borders. In fact, as they grow, so large companies are able to barter for resources and negotiate as equals with the countries and regions which compete for their investment.

But as companies grow and spread their operations acros many countries, they are struggling to maintain an identity and attract loyalty from their staff. So they are beginning to behave like countries, using 'nation-building' techniques to promote internal cohesion, and even taking on some of the benevolent roles of the state, such as providing for their employees health care, pensions, education, holidays and security.

But this does not mean that companies now rule the world. Nations remain the defining political unit of our age. In fact, there are now more nations in the world than ever before.

Countries are changing, though. They are developing strategies to cope with these growing pressures, partly by combining regional integration with devolution, a bit like the decentralised management of mega-merged corporations – but also by developing national brands. The way that countries have sought to do this have been much mocked and misunderstood. They are not building their national brands so that middle-aged politicians can look cool, but rather to help them compete not only for power and influence, but in the new battles for exports, inward investment and tourism. Each nation now seeks to promote its individual personality, culture, history and values, projecting what might be an idealised but immediately recognisable idea of itself. These pressures drive nations to adopt the marketing and branding techniques used successfully by so many global companies for a long time.

But national branding is not straightforward. The US is unique because its reputation is ubiquitous and overwhelming, but smaller countries fighting for their share of investment and resources find it difficult because they are relatively unknown, and beyond a very limited sphere, nobody knows or cares anything about them. Somewhere in the middle are countries like China, India, Russia, Britain and France. Everyone has heard of them, but even these perceptions are dominated by caricature – spiritual India, efficient Germany, traditional Britain, passionate Spain and so on. This can hold them back. In fact, it is these well known but often misunderstood countries which have led the way with national branding projects, even though it is the lesser known countries that might need them most.

Nations won't disappear, companies won't take over the world, but their jostling for influence and position, the intensity with which they compete with each other and learn from each other, and the various ways in which they vie for the admiration, respect and loyalty of the individual is going to make life very interesting. Not just for countries and companies, but for us too – as employees, shareholders, partners, customers and citizens.

"a fascinating pamphlet" Peter Preston, The Guardian