Global Residence and Citizenship Handbook. Christian H. Kälin

Roper City Brands Index^SM examines the appeal of 50 cities under the headings of presence, place, prerequisites, people, pulse and potential.

      I first wrote about an idea I called ‘nation brand’ in 1998, and claimed that the reputations of countries, cities and regions are just as critical to their progress and prosperity as the brand images of products are to the companies that own them. A powerful, positive national image makes it relatively cheap and easy to attract wealthy and talented individuals, tourists, investors, positive media coverage, and to export products, services, ideas and culture. A weak or negative image usually means spending more to achieve less.

      For individuals going through the difficult, time-consuming and often bewildering process of selecting a new or additional home base, the image and reputation of the country they finally choose are closely tied up with these questions.

      As the financier J. P. Morgan famously observed, “A man always buys something for two reasons: a good reason, and the real reason”. High net worth individuals and their advisors tend for obvious reasons to focus on the ‘good reasons’ for choosing their domicile, but, as analysts have increasingly come to recognize, the ‘real reasons’ – what are sometimes misleadingly referred to as ‘soft factors’ – are unquestionably major and often determining factors in the equation.

      From the viewpoint of business investors, entrepreneurs and persons of independent means, the image and reputation of the destination country is one of the ‘real reasons’ why one place is preferred over another. Even if prospective residents or investors appear to be thinking mainly of practical issues like infrastructure, political stability, fiscal policy, transport links, government incentives and climate, they cannot fail to be swayed by the considerable impact their choice of residence will have on their personal or corporate “brand image” and on the morale of their family, friends, staff and other stakeholders. Some locations are universally regarded as a badge of success for those that move there or acquire citizenship rights; other places might give out more complex and nuanced messages about the individual’s world view. Certain destinations are perceived as upmarket in some circles and downmarket in others. Some are strongly associated in the public imagination with media celebrity, or great wealth earned in certain sectors; others with inherited wealth or a quieter sort of success. For some people, the well-known and widely recognized aspirational destinations remain the most desirable; for others, a ‘new’ or less well known (and possibly less crowded) destination suggests a more refined taste and presents a more exclusive image.

      And if the country is successful in attracting significant numbers of new residents, especially if they are prominent or particularly wealthy, this will play a part in altering the image of the country itself. This effect is very similar to what in the commercial sector is known as “co-branding”: the combination of the incoming residents’ own image, the image of their country of origin, and the image of their new country of choice, will bring about changes to the image of each. The image of a developing economy, for example, can be enhanced by the presence of well-known investors or individuals from wealthier countries: public opinion places trust in the decisions made by such individuals and organizations (partly, in turn, because of the esteem in which their own country of origin is held), and consequently accepts the decision to relocate there as a reliable token of confidence in the destination. Conversely, when an individual from a poorer country relocates to a richer country, this can add significant equity to their personal or corporate brand.

      So both the incoming resident and the destination are affected by their own and each other’s images during the decision-making process, and in turn, the images of both are affected by the outcome of the decision. For these reasons, the question of image and reputation simply cannot be separated from the business of relocation and citizenship – as well as foreign investments of other kinds – or excluded from any serious consideration of the topic.

      Of course, national image and reputation affect, and are affected by, many other factors. A nation or region or city’s international standing adds a measurable premium, or a measurable discount, to every transaction made with the rest of the world, whether that transaction is political, social, cultural, legal or commercial. The things that people believe about other places may be biased, utterly misconceived, weirdly distorted, unfairly negative, sometimes undeservedly positive, often outdated and always ludicrously simplified, but that doesn’t mean we can ignore them.

      Relocation decisions tend to be as much about human capital as about infrastructure or tax conditions, and they are thus profoundly affected by the ‘brand image’ of the country’s population. An investor or prospective resident can easily find statistical data relating to a population’s educational level and standards of living, but where does one get information about the population’s intelligence, honesty, loyalty or even good humor? All these factors matter – indeed, they can make the difference between the success or failure of the move – yet we only have our own perceptions, anecdotal evidence, and often limited personal experience to rely on. Once again, everything hinges on reputation.

      In the busy and crowded marketplace which forms the modern world, most people and organizations don’t have time to learn about what other places or their populations are really like. We all navigate through the complexity of our world armed with a few simple clichés, and they form the background of our opinions, even if we aren’t fully aware of this and don’t always admit it to ourselves: Paris is about style, Japan about technology, Switzerland about wealth, precision, integrity and efficiency, Rio de Janeiro about carnival and football, Tuscany about the good life, and most African nations about poverty, corruption, war, famine and disease. Most of us are much too busy worrying about ourselves and our own countries to spend too long trying to form complete, balanced, and informed views about six billion other people and nearly two hundred other countries. When you haven’t got time to read a book, you judge it by its cover.

      These clichés and stereotypes – whether they are positive or negative, true or untrue – fundamentally affect our behavior towards other places and their people and products. It may seem unfair, but there’s nothing anybody can do to change this. It’s very hard for a country to persuade people in other parts of the world to go beyond these simple images and start to understand the rich complexity that lies behind them.

      Some quite progressive countries don’t get nearly as much attention, visitors, business or investment as they need because their reputation is weak or negative, while others are still trading on a good image that they acquired decades or even centuries ago, and today do relatively little to deserve.

      The same is true of cities and regions: all the places with good, powerful and positive reputations find that almost everything they undertake on the international stage is easier; and the places with poor reputations find that almost everything is difficult, and some things seem virtually impossible.

      Perhaps it’s not so surprising that such a big part is played by ‘mere image’ or ‘mere reputation’ in even the hardest of decisions, those relating to personal residence, family life, and personal financial security: as the economist Maurice Allais showed in 1953, the more important and consequential a decision becomes, the more likely people are to rely on their feelings and intuition rather than logic to make the decision.

      For these and for many other reasons, all responsible governments, on behalf of their people, their institutions and their companies, need to measure and monitor the world’s perception of their nation, and to develop a strategy for managing it. Whether or not attracting high net worth individuals is a part of their growth strategy, it is a key part of their job to try to earn a reputation that is fair, true, powerful, attractive, genuinely useful to their economic, political and social aims, and honestly reflects the spirit, the genius and the will of the people. This huge task has become one of the primary skills of administrations in the twenty-first century, and it is one of the critical underpinning factors in attracting foreign capital and talent.

      Equally, prospective residents need to be familiar with the dynamics of country, city and region image – their own and those of their shortlisted destinations – and to understand how these factors impact their decisions as well as the consequences of those decisions.