If emerging markets (EMs) are to dominate the 21st century, as many reasonably expect, then they will need to capture the world’s imagination, not just that of businesses and investors. To this end, ‘soft power’ will become increasingly important. ‘Soft power’ is an essential element of global branding, and in this case, I am talking about the branding of entire nations.

Although definitions of soft power vary, the term generally refers to ways through which countries can gain influence through the attractiveness of their culture, values and institutions (as opposed to hard power, which refers to military force, diplomatic pressure, and economic sanctions). For the purposes of this post, I will say that soft power is most clearly manifested through films and television programmes, mass media, popular music, fashion and design, food, computer software, tourism, education, literature, language, and religion. In other words, all things that contribute to ‘lifestyle appeal’.

These are mostly non-tangible assets and therefore impossible to quantify, but they undoubtedly have an economic impact, through sales and syndication and by attracting tourism and migrants. Furthermore, as developed states and the more sophisticated emerging markets move away from old industries to ‘knowledge-based’ sectors, soft power will gain importance.

Tangible Benefits Of Soft Power

Tourism: This is a substantial revenue and foreign exchange earner for many countries. Thus, countries seeking to attract tourists need to have things going for them, whether these are physical geographical features (mountains, beaches, etc), famous landmarks, or even settings of contemporary film and TV dramas (South Korea is building a theme park to capitalise on the popularity of its TV dramas in Asia).

Sports: Sport is a big business, and countries can derive significant benefits from hosting the World Cup, Olympic Games, or even lower-profile tournaments. That’s why competition to hold them is so intense. True, in the case of Korea-Japan 2002 there were concerns that the World Cup would leave behind expensive, state-of-the-art stadiums which would seldom be used again, but in other countries the pressure to upgrade infrastructure ahead of the games provides a major stimulus for growth. Of course, there are downsides too, such as land evictions and cost overruns, but the prestige element certainly matters.

Education: This is a major service industry, and it also helps build ties between developed states and emerging market elites. On the revenue side, for example, many UK boarding schools are now increasingly targeting students from countries such as Russia and China to keep them going, and this probably applies to universities too. As for global elite building, education establishments are undoubtedly useful hives, although it is clearly evident that EM leaders educated in the West do not necessarily adopt a Western outlook when governing their countries (in some cases, the reverse!). Nonetheless, a respected education system allows countries to draw in talent from around the world, sometimes on a permanent basis, which in turn enhances the quality of the host nation’s labour force.

Demography: Related to the above point, given that most developed states and even some emerging markets are experiencing ageing populations, soft power will allow them to attract talented (and unskilled but still necessary) workers to their shores, thus offsetting demographic decline. If the ageing process accelerates in the 21st century, the competition to attract workers from underdeveloped countries could intensify, meaning that soft power will become even more important.

Non-Quantifiable Benefits Of Soft Power

Geopolitics: One of the reasons why the United States was admired in Eastern Europe during the Cold War was because of its lifestyle appeal. After the Cold War, the US remained the dominant soft power in the world. This explains why despite widespread anti-Americanism due to events such as the Iraq war, US popular culture is still… popular. Indeed, I’d suggest that a significant source of anti-Americanism reflects the fact that America is not staying true to its own values or denying others their values, rather than a rejection of US values per se.

Religion is another soft power geopolitical dynamic. Saudi Arabia commands considerable prestige by being the home of Mecca and Medina, and religion has always been mobilised by governments worldwide for domestic political and geopolitical purposes. Stalin famously ridiculed the Vatican, saying ‘How many divisions has the Pope?’ In the end, the Pontiff did not need tanks, for he was able to mobilise Poland’s Catholic population in a final push against Communism.

Language: There is little doubt that a common language is important to geopolitics and geoeconomics. The Anglophone countries all maintain close defence and intelligence cooperation, France maintains close commercial ties with Francophone African countries, and Russian is still lingua franca in many parts of the former Soviet Union. Also, Turkey has for some years been building closer ties with Turkic-speaking countries such as the Central Asian states and Azerbaijan. Overall, though, I suspect that English will retain the global edge, and this has already led to countries such as India and the Philippines emerging as outsourcing destinations.

Media: The global media has long been dominated by Western newspapers, press agencies and television channels, but this is changing. Al Jazeera was one of the first major non-Western alternatives, but several others (e.g. China’s CCTV, Russia Today, and Iran’s Press TV) are emerging, and are increasingly targeting Western audiences. This is important because it is leading to the creation of new narratives. A Western journalist once said that ‘the Vietnam War was the first in which the mainstream history was written by the losers’. In future, this may not be the case.

Candidates For New Soft Powers

For the next few years, the world’s soft powers will remain the US, UK, France, Italy, and Japan. However, China, South Korea, India, Brazil, Nigeria, and several others are making their pitch. Meanwhile, the Hispanisation of the US through immigration from Latin America (especially Mexico) could boost the region’s soft power by proxy. In addition, the US infotainment complex is increasingly tapping ideas from Japanese, Korean and Chinese pop culture, allowing these nations too to gain influence.