By Russell Campbell, lecturer in marketing, School of Business and Enterprise, University of the West of Scotland

THE passing weeks appear to bring more questions than answers in respect of how Scotland’s future prosperity might be impacted by Brexit. One central concern is the strength of “Scotland the brand”.

Traditionally we have made a big play about the quality of the overall Scottish brand through the sum of its component parts – for instance, the strength of the whisky sector, or expertise within financial services, oil services or life sciences. We have also been blessed with natural beauty and a landscape not only capable of harnessing green energy, but able to enhance our reputation for quality agricultural produce and sustainable tourism.

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Brands are multifaceted constructs that hide complexities which are both tangible and intangible, and country brands – effectively, geographical umbrella brands – are even more complex as they are very sensitive to geopolitical developments.

Nations which benefit from positive country of origin effects often gain associated tangible benefits through brand loyalty – where customers exhibit either strong preferences for products or services from that country or refuse substitutes from other locations. For example, Canada has consistently scored highly in surveys as the country most admired by the Japanese. This has led not only to reputational enhancement for Canadian exports to Japan, but has spurred significant inward tourism and direct investment.

So how might Brexit impact on the Scottish national brand? This would depend on not only the specific metrics used but also the categories of brand strength, some of which are difficult to measure.

In terms of relevant financial indicators, the respected Fraser of Allander Institute has estimated that within 10 years Scotland would face a fall in exports of between 4.4 per cent and 11.3 per cent depending on the post-Brexit model and the degree of optimism or pessimism. Projections for estimated GDP are also negative. Modelling such impacts is notoriously difficult not only as there is no precedent, but because so many factors are present. Some sectors may appear to benefit in the short term, yet lose out in the long term.

Current EU membership permits the wider Scottish brand not only access to the world’s largest free market, but the provision of some key sector-based subsidies. These subsidies – for example, in farming – are currently quantifiable, but we do not know if they will be maintained by domestic government post Brexit.

One farmer I spoke to recently told me he was delighted with the fall in the value of the pound because he was achieving better sales overseas (whilst he produced his own feed domestically, thus hadn’t yet suffered from increased import costs). I pointed out that his customers might only be price sensitive rather than brand loyal, and what would happen if EU farming subsidies were not matched domestically post-Brexit, or if tariffs were imposed? He did not have an answer.

In agriculture, if a post-Brexit trade deal with the United States was one of the only alternative “victories”, might GM crops be incorporated into our domestic markets, resulting in potential reputational brand damage in other markets such as Europe?

Curiously, the UK Government recently failed to provide named protection for key Scottish food brands such as Stornoway black pudding in an EU-wide trade deal with Canada.

The low value of sterling and price sensitivity to currency values will of course play a part in international trade and brand selection choices, but in Scotland we have more wisely concentrated on building a reputation for quality. If political and economic barriers are raised on behalf of the wider UK, we would suffer from associated transactional costs that might impact on the overall perception of Scottish products and services. For example, restrictions on the free movement of Europe’s people to our shores would undoubtedly influence visitor numbers, whatever our currency value.

Goodwill from citizens and businesses in other countries is not only difficult to measure, but it cuts both ways, because trade and tourism – as with politics – has always been about compromise.

Interestingly, Michael O’Leary of Ryanair said recently that flights to and from Europe might be suspended if a hard Brexit occurred. Although such an outcome seems unlikely, this type of uncertainty can hinder business and personal plans, but also, crucially country brand perceptions.

Currently there seems to be substantial goodwill towards Scotland the brand from our European partners. Part of that is based on the knowledge that Scotland itself voted clearly to remain within the EU. A Yes vote in a potential second independence referendum might go some way to protecting Scotland the brand, as it could help foster trade and goodwill with our EU partners whilst maintaining our identity with the wider global community.