Korea’s potential G5 inclusion could up national brand value

[Photo by Kim Ho-young]

A recent analysis by the Maeil Business Newspaper and the Federation of Korean Industries (FKI) based on U.K. market research firm Ipsos’ Nation Brands Index (NBI) showed that South Korea’s inclusion in the G5 group would significantly boost the nation’s brand value by a staggering $79 billion. This estimation is drawn from an NBI-based evaluation, indicating that the country’s current brand value of $2.08 trillion could rise to $2.16 trillion upon entry into the G5 club.

The concept of the “G5 premium,” representing a 3.8 percent increase in a nation’s brand value upon achieving the status among the world’s leading nations, is driving this surge.

The G5 premium denotes a superiority over other nations when economic size, cultural level, and national characteristics are on par with the G5 countries.

The analysis employed NBI as the dependent variable and controlled variables such as G5 nation status, brand value assessment criteria including exports, governance, cultural heritage, national character, tourism, immigration, and investment as proxy variables to derive the G5 premium.

This derived G5 premium was integrated into the brand value assessments of Brand Finance, a U.K.-based national brand valuation institution, for 2023. Brand Finance evaluates four areas—investment, tourism, products/services, and human resources—as value models. According to this criterion, the brand values of G5 nations are estimated as follows: the United States at $30.3 trillion, Germany at $5.08 trillion, the United Kingdom at $4.79 trillion, Japan at $4.45 trillion, and France at $3.67 trillion.

Korea’s potential inclusion in the G5 is estimated to drive an export enhancement effect of $17.14 billion, reflecting the country’s potential economic benefits from this affiliation.

Inclusion in the G5 also holds the promise of positively impacting Korea’s international reputation. If this trend translates into an actual increase in the nation’s credit rating, it could potentially reduce the government’s burden of national debt costs.