TRUST IN
ASIA PACIFIC, MIDDLE EAST & AFRICA
2015
TABLE OF CONTENTS 4
Asia Pacific, Middle East & Africa
6
North Asia
8
China
10
Hong Kong
12
Japan
14
Korea
16
Emerging Markets
18
India
20
South Africa
22
United Arab Emirates
24
Southeast Asia & Australia
26
Australia
30
Indonesia
32
Malaysia
34
Singapore
ASIA PACIFIC, MIDDLE EAST & AFRICA Trust in Asia Pacific, Middle East and Africa There is, as ever, no such country as APACMEA (Asia Pacific, Middle East & Africa). But if there were it might be thought to be a little confused, because whilst the region includes the five most trusting markets we survey (UAE, India, Indonesia, China and Singapore) it also includes three distrusters (Hong Kong, S. Africa, S. Korea) and Japan, the least trusting country of all.
NGOs Of the four institutions we survey, NGOs remain the most trusted in the region (66 percent) followed by business (63 percent), media (58 percent) and government (56 percent) – the same order we found globally. But if we unpack those numbers, a different story emerges.
decisions in those markets. Clearly, the understanding of the role of media is different to the West, with freedom of speech in APACMEA sometimes being viewed as less important than nation building and consensus forming. There is a limit to this however and maybe Western norms are beginning to prevail. Big drops in trust in Singapore (-11 percent) were caused by what is often seen as tame coverage of public service failings. In Hong Kong, the traditional media’s role in covering the democracy protests was viewed as polarized and biased, helping it to become hugely undermined by social media which, in effect, led coverage and debate about what was happening on the streets. In fact, trust in media dropped in seven of the 11 APACMEA nations we survey.
The real value in our survey is not in the regional or global data (except as a comparator) but in the deep dive market studies... Trust in NGOs fell in nine of the 11 markets we survey in the region and some of those falls were precipitous. In China due to repeated transparency scandals on fundraising and spending for a number of NGOs, especially charity funds, trust among informed publics fell 12 percentage points. In Hong Kong due to negative association with the Occupy movement and a failure to address the issues it raised, trust fell by 14 points. So whilst NGOs remain the most trusted institution, and we still recommend that business engage with them on leadership issues, it is especially important to pick a partner with good governance in the region. But if this is a trend not a blip, then NGOs may soon lose their “most trusted” crown to business.
Media Media in Indonesia (80 percent), UAE (79 percent), China (77 percent) and India (76 percent) is the most trusted in the world and Singapore ranks sixth (59 percent). Print media and traditional media is still growing in parts of India where new affluence and literacy continues to expand the reader base. But, the scores for China, UAE and Singapore often surprise as government takes a strong lead in editorial
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Government The five nations where government is trusted most are all in the APACMEA region (UAE, India, China, Indonesia and Singapore). For as many years as we have been surveying trust, both informed and general publics have conferred trust on governments (and to some extent all institutions) they believe have guided their country to more economic prosperity and security. Developing economies inevitably do well by this measure, where-as in contrast, European governments have often been penalized. Trust in government, by and large, correlates with economic success. There is no correlation between trust and democracy (in fact the opposite). It is in trust in government that the region is the most extreme as three of the lowest global scores go to South Africa, South Korea and Japan.
Business And in keeping with that pattern, APACMEA has both the lowest score of trust in business (South Korea) and the three highest (UAE, Indonesia and India). South Korea, which managed to decline from only 39 percent of people trusting business to “do what is right,” to a catastrophic 36 percent, breaks the correlation between economic and trust success. A hugely successful export focused economy dominated to an unparalleled extant by 13 chaebols or conglomerates should, in theory, be lauded with trust and license, but instead comparatively anemic recent growth rates and the sense that the chaebols are too dominant and corrupt puts Korean brands and businesses at a distinct disadvantage in their home market. Ironically, they are trusted by more people abroad (51 percent) than they are at home. The opposite is true of businesses in China or India, which are highly trusted at home (77 percent and 87 percent respectively) but score incredibly badly abroad (India 34 percent; China 36 percent). This is hugely important for businesses looking to expand, acquire, create partnerships and generally trade and sell their products and services, and especially so in the developed economies. A business based in a developing economy might be trusted by 57 percent of people to “do what is right” in another developing economy, but that figure plummets to a mere 22 percent when they venture to a developed economy. And to add to the insult, businesses based in developed economies are significantly more trusted in developing economy markets than they are at home (77 percent).
As always, it is difficult to make generalizations for a region that includes China, Australia, South Africa and UAE to name but four contrasts. The real value in our survey is not in the regional or global data (except as a comparator) but in the deep dive market studies which, as always, provide both stimulating and actionable data for boardrooms, communications professionals and creatives.
Our Trust Barometer data leads us to conclude that businesses from APACMEA and all developing economies need to over index on engagement and communication when they venture abroad, rather than relying purely on scale or financial muscle. Lack of trust abroad costs money, time and effort to overcome in the form of overpriced deals, unwelcoming governments and authorities, suspicious unions and skeptical customers. And finally, and on a more optimistic note for the region, this year we studied for the first time the relationship between innovations and trust. The good news is that a “trusting tide lifts all boats” and so informed publics in our region are among the most receptive to new innovations and services.
David Brain
President & CEO, Edelman APACMEA david.brain@edelman.com
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NORTH ASIA Regaining Public Trust in North Asia: The New Status Quo In 2014, regions all across the world experienced a noticeable decrease in trust, and North Asia was no exception. In addition to crises throughout the year, which at many times lacked adequate and timely responses, North Asia also had to adapt to a general slowdown of its main economies, leading to a prevailing sense of unpredictability and uncertainty regarding the status quo. Such sentiments are evident in the public reaction to much-covered incidents, including Occupy Central in Hong Kong and the sinking of the MV Sewol in South Korea. This environment not only creates new trust building challenges for government, business, and other institutions, but also points to the necessity of trust building as a necessary and long-term endeavor. The three critical elements most lacking in business performance, but with the greatest impact on trust for companies in the region, are Engagement, Integrity and Quality of Products and Services. These must form part of the business agenda moving forward. With regards to trust building for businesses, the 2015 Edelman Trust Barometer examined the impact of certain actions under five overarching categories: Engagement, Integrity, Products and Services, Social Purpose, and Operations. While drivers of business reputation vary across the entire region, there are also some noticeable similarities. Offering high-quality products or services ranks as the most important factor in North Asia, except in South Korea, where treating employees well accounts for the highest percentage, possibly reflecting dissatisfaction with the general working environments at some of South Korea’s large companies. In addition, actions associated with Engagement and Integrity experienced the most significant gap between the importance of the action for trust building and company performance. For example, (%) placing customers ahead of profits and having ethical business practices are Media NGOs extremely important for building trust, but companies in North Asia are perceived to 77% 72% be universally lacking in these areas.
It should come as no surprise that North Asia is diverse, and this is even more evident when comparing the varying levels of trust in the region. For example, China experiences relatively high levels of trust across its institutions, while Japan is tied with Ireland as the least trusting country in the world. Government is also a relatively trusted institution the region, except in South Korea, where government ranks last. Conversely, business is a less trusted institution across the region, except in Japan, where business ranks first. While there is greater trust in family-owned enterprises worldwide, those in North Asia are more likely to trust big business.
Percentage of Trust in Institutions Government
Business
China
82%
70%
Hong Kong
42%
42%
Japan
40%
South Korea
33%
41%
63%
48%
31%
29%
36%
50%
68%
Taken together, these indications point to a significant change in the role of business in society. Once regarded as wealth creators and the drivers of economic growth, businesses are now
The three critical elements most lacking in business performance, but with the greatest impact on trust for companies in the region, are Engagement, Integrity and Quality of Products and Services. 6
Gap in Importance and Performance of Action China
Hong Kong
Japan
South Korea
Treats employees well
21
17
37
35
Listens to customer needs and feedback
21
19
35
34
Places customers ahead of profits
25
20
29
30
Communicates frequently and honestly on the state of its business
22
19
35
25
Has ethical business practices
26
19
28
36
Takes responsible actions to address an issue or a crisis
21
20
40
32
Has transparent and open business practices
24
20
39
36
Offers high quality products or services
23
20
35
30
Is an innovator of new products, services or ideas
13
13
10
11
Engagement
Integrity
Products & Services
expected to contribute to a greater good and purpose, with an increasing focus on shared value across key internal and external constituencies. Moreover, in such an increasingly uncertain world, business innovation, once regarded as a driver of growth, is now being questioned. In North Asia, a majority of the population in all countries believe that the pace of development and change in business and industry is too fast. Today, it is no longer sufficient for business innovation to drive profits: there must also be clear personal and societal benefits.
Public Reaction to Pace of Business Innovation (%)
terms of online engagement, as well as engagement with employees and internal stakeholders. Moving forward, businesses need to revisit their overall engagement model. While Engagement and Integrity have always been a part of successful business strategies, themes of mutuality and partnership are increasingly prevalent. For the public, timely and actionable responses are no longer preferred, but required, especially when responding to crises. Business and business innovation need to become socially accountable, and rather than thinking about business impact after the fact, such considerations need to come first.
Too Slow
Just Right
Too Fast
China
19%
21%
59%
Hong Kong
24%
28%
46%
Japan
29%
29%
36%
South Korea
8%
14%
77%
In a region that is experiencing a significant decrease in levels of trust, Engagement and Integrity are more important than ever to rebuild trust in business and business innovation. Transparency and frequent communication matter in a realm of uncertainty, regardless of industry sector or country of origin. Accordingly, there are now new norms for engaging public stakeholders. For the first time, trust in online search engines exceeded or matched trust in traditional media all across North Asia. In addition, friends and family are the most trusted content creators in all North Asia countries. For businesses, this points to a clear path forward in
While connectivity is a universal theme for all countries in North Asia, to thrive in this complex world, trust is the constant that must be nurtured now and for the long term.
Bob Grove
CEO, Edelman North Asia bob.grove@edelman.com 7
CHINA Building Trust is the New Normal As businesses adjust to working under a “New Normal” in China in 2015 and the economy transitions to a slower-speed, higher-quality mode, the importance of understanding trust is more relevant than ever for business. Thankfully, the tenets of trust building are universal and the internationalization of China’s economy, businesses, media, and society underscores the need for continued insight into how to create the world’s most valuable commodity: Trust.
Trusting China In 2014, China’s informed public was the most trusting in the world. This year they slip to fourth. Overall levels of Trust in China have declined by four percentage points and trust in businesses has dropped by seven percentage points. The reason that the informed public’s trust in businesses has dropped is apparently related to the bigger context where the economy is facing challenges between growth and sustainability. However, in the long run, making the long play is essential to winning trust in China and around the world. Slower-speed, higher-quality sustainable growth will be creating opportunities for companies that build trusted brands and communicate well, but Chinese companies and brands will be facing strong headwinds to gain trust as they move up the value chain and begin to truly compete globally with incumbent MNCs. Low levels of trust in companies from developing countries generally, including China, means that trust building needs to be a long-term business strategy, not just an administrative afterthought. Trust, the currency of our society, is slowly earned but quickly spent. Kaisa Group, a Chinese property giant based in Shenzhen, helped to build one of the greatest transformations of China’s modernization and open policy: Shenzhen City, from fishing village to megacity in 30 years. In the first half of 2014, it was the largest property developer in Shenzhen, with so much cash it bought half a billion dollars’ worth of USD bonds. After accusations of
How much do you trust global companies headquartered in... ? Global 2015 Informed Public
China 2015 Informed Public
China 2015 General Population
Sweden
76%
Germany
90%
Germany
76%
Canada
75%
Switzerland
88%
Switzerland
73%
Germany
75%
Sweden
85%
China
73%
Switzerland
74%
United Kingdom
85%
Sweden
69%
United Kingdom
70%
France
83%
United Kingdom
69%
Netherlands
69%
United States
83%
Canada
69%
Japan
68%
Canada
82%
France
68%
United States
65%
Netherlands
82%
United States
66%
France
62%
Italy
79%
Netherlands
65%
Italy
51%
China
77%
Italy
64%
South Korea
51%
Russia
75%
Russia
63%
Spain
50%
Spain
73%
South Korea
63%
Brazil
38%
South Korea
72%
Spain
58%
China
36%
Brazil
65%
Brazil
52%
Russia
35%
Mexico
61%
Mexico
46%
India
34%
Japan
58%
Japan
43%
Mexico
31%
India
50%
India
36%
corruption in late 2014, Kaisa lost half of its stock price in two months and defaulted on its debt, putting the property market, which accounts for 16% of the country’s economic growth, at risk, while losing the trust of its consumers. Another well-known Chinese developer, Vanke, however, has acted with integrity in its operations and investment, not paying under the table to get the most central locations in the city. Pushed into the outskirts, it transformed itself into a suburban developer and this has actually turned Vanke into one of the nation’s leading property developers.
For businesses operating under the “New Normal,” well communicated innovation and ethical business practice is the key to unlocking long-term business growth. 8
As with Vanke, it is also about how you communicate your trustworthiness that seals in long-term success in the Chinese market. Online search is still the most trusted source of information in China (80%) and has in 2015 become the source most used to validate news stories (33%), overtaking TV (29%), and is likely to become the country’s first most trusted source for breaking news in the next few years. The online and owned media space is coming into its own. In terms of message delivery to the informed public,
This year, the gaps between expected and delivered performance on the key trust clusters are widest for Integrity and Engagement. Making a good product whilst protecting the environment does not cut the mustard on its own. Every aspect of trust building is vital. Integrity in business and Engagement with all stakeholders all the time is not just a good bet, but is table stakes. This remains true for businesses that are at the forefront of innovation and that continue to bring growth and economic success.
Content creators: “Companies I use” are the most trusted source of online content (81%) after friends and family (89%), ahead of academic experts (78%). Spokespeople: Company and Technical Specialists are now the most credible spokespeople for companies (69%), ahead of “A person like myself,” which is in second place (66%). Bloggers are the least credible spokespeople (31%). Clear corporate and digital communications seem to resonate well through the media space then, despite relatively low levels of trust for businesses on the whole, suggesting that there is a lot of scope for businesses to recast themselves as trustworthy if they develop good PR strategies.
At the global level, there is a strong positive correlation between trust in institutions and trust in innovation. China fits this pattern: innovation brings growth, and growth brings trust. But at the same time, 59% of the informed public feels that the pace of development and change in business and industry in China today is too fast. 86% of the informed public thinks that new innovations need to make test results available publicly for review and 80% will trust innovation developed in partnership with an academic institution. Without sufficient communication or engagement, innovation can also undermine trust. As white-hot growth becomes more difficult to come by in China, businesses face an uphill climb to chase retreating consumer trust. But there is a way to tip the playing field: For businesses operating under the “New Normal,” well communicated innovation and ethical business practice is the key to unlocking long-term business growth.
Focus on integrity and engagement So how do we build trust? After 15 years of researching trust, Edelman’s Trust Barometer reveals that trust building has 16 specific attributes, focused around five key performance clusters.
Tony Tao
SVP, DJE China Group tony.tao@edelman.com
Kevin Wang
MD, Edelman China Corporate Practice kevin.wang@edelman.com 9
HONG KONG An Evaporation of Trust in Hong Kong The year of the horse in Hong Kong witnessed a turbulent series of events that shook the public’s confidence in the city’s institutional leadership. Correspondingly, the fourth annual Hong Kong results of the 2015 Edelman Trust Barometer captured the lowest trust ratings since we began surveying the special administrative region. Hong Kong has dropped from being the fifth most “trusting” nation in 2013 (67 percent overall institutional trust), to a “distrusting” level this year (47 percent overall institutional trust), ranking seventeenth out of 27 markets surveyed. For the first time, this evaporation of trust is seen among all four institutions, with particularly grim findings for media and NGOs, which saw the most significant drops in trust year-over-year.
Government sees continued decline trend Last year’s Trust Barometer data had foreshadowed the mounting uncertainty surrounding the city’s future, with the government experiencing an 18-point drop in trust – the largest drop of any country surveyed last year. This year, the government saw another three-point decline following the 2014 fall, demonstrating continuation of a distrusting sentiment.
Local institutions will need to collaborate to rebuild together, by acting with integrity, communicating transparently, and engaging the public openly. To better understand these findings and their implications, one must review the potential drivers for what prompted the declines, using two lenses. The first lens focuses on the more immediate events of 2014. The most notable events in 2014 of course surround the city’s unprecedented civil disobedience movement, Occupy Central. However, Occupy does not tell the story of the climate of trust in Hong Kong in its entirety: there were significant occurrences leading up to Occupy and separate from it. In 2014, we once again witnessed a continued litany of controversies across all four institutions involving senior government officials, business leaders, and members of the media – from the trial of Rafael Hui, former Secretary for Administration for corruption charges; the security scandals involving rampant internet crime through social media; and the investigation of Apple Daily’s Jimmy Lai for allegedly donating millions to political parties to the establishment of the HKTV online streaming platform after rounds of the government rejecting its free-to-air license. However, viewing the results over the four years of data collected in Hong Kong offers a second and perhaps more significant lens, with a wider socio-economic context that reveals broader and more insightful trends. It is through this longer-term lens that the 2015 results are best perceived. 10
Hong Kong media faces a trust crisis Meanwhile, the media, historically trusted as an honest and vocal mouthpiece for the people’s concerns over the past three years, has seen a 22-point decline in trust to just 41 percent. This is the largest drop of any country surveyed this year. This result ranks media as the least trusted institution in Hong Kong, down from the second most trusted position it previously enjoyed. For the first time, search engines are now the most trusted media source, used first and most often, while traditional media saw the biggest decline in trust with a 25-point drop. Interestingly, while we saw an incredible rise in citizen journalism last year, trust in social media as a trustworthy news source remains consistent with previous years, at just 49 percent.
An unexpected decline for NGOs One of the more surprising findings from this year’s data was the significant trust decline in NGOs after three years of continual increases. Despite the 14-point drop, NGOs remain the most trusted institution in Hong Kong. This drop arguably demonstrates the broader evaporation of trust across all institutions, but also perhaps that NGOs were, correctly or not, perceived to be involved with Occupy.
An opportunity for business to lead in rebuilding trust It is a worrying fact that domestic trust in business has continued to decline by a 7-point margin, equating to a cumulative 18-point drop since 2013 data. Hong Kong is still well respected as a global business center, but the stagnant and even declining trust in business and industry may indicate uncertainty about how Hong Kong ensures its pivotal role as a leading Asian and global business hub. Undoubtedly, these trends help demonstrate an opportunity for business to take a broader, more collaborative leadership role in deepening trust and ensuring Hong Kong’s future as a thriving international business center. While operating in an environment of deteriorated trust, Hong Kong institutions have the opportunity to rebuild, with a particularly opportune role for business. Despite the grim findings, the Trust Barometer offers actionable data for boardrooms and communicators to incite discussion and inform strategies to deepen trust in Hong Kong. The survey reveals five categories of attributes that drive trust: Engagement, Integrity, Products & Services, Purpose, and Operations. The data insightfully reveals gaps between the importance that the public places on a given driver and the perceived performance by companies. The largest gaps offer the greatest opportunities for companies to improve trust. For example, respondents in Hong Kong have said it is important for companies to place customers ahead of profits, yet there is a gap of 20 percent against their perceived performance. Likewise, people are more trusting of Hong Kong companies that have transparent business practices, offer high-quality products or services, and work to protect and improve the environment. However, each of these attributes has performance gaps upwards of 20 percent.
The year of the goat will be very telling year for Hong Kong’s leadership and growth on the international stage. Local institutions will need to collaborate to rebuild together, by acting with integrity, communicating transparently, and engaging the public openly. These will be vital ingredients to forge the way forward to a prosperous and thriving Hong Kong in 2016 and beyond.
Andrew Kirk
Managing Director, Edelman Hong Kong & Taiwan andrew.kirk@edelman.com
Adrian Warr
Senior Director, Edelman Hong Kong andrew.warr@edelman.com 11
JAPAN The unimaginable, and the paradigm of contradiction: Why trust continues to fall in Japan 2012 was a watershed. Trust in the four institutions – government, business, media and NGOs – plummeted as a result of the Great North Eastern Earthquake. Over the course of the year surveyed, Japan moved from being a largely trusting nation and joined the ranks of the distrusters. Less than 50 percent trusted each of the four institutions, with government recording a bottom-scraping 25 percent. In 2013, we heralded a new normal for trust in Japan – the public remained deeply skeptical after the collapse of trust in 2012, with trust in the four institutions among the general population each below 50 percent. High expectations of then new Prime Minister Abe and his “Abenomics” in 2014 contributed to a rebound in trust, although all institutions were still below 50 percent, with the exception of business. However, this rebound was accompanied by the burning question as to whether this revival was sustainable or nothing but a “dead cat bounce.” So now the jury has handed down its verdict.
Our hypothesis is that Japanese society is at the cusp of change. A transitional change that is creating a paradigm of contradictions that is prompting Japanese to continue to lose trust in their institutions. There can be no doubt as to the popularity and high expectations of Prime Minister Abe and his policies. This was clearly demonstrated in the results of the recent snap general election where Abe and his government was returned with an increased majority. For the first time in decades, Japan has a straight talking and committed leader who raises the hopes of Japan returning to a prominent place on the world stage. This expectation is what prompted trust in government to jump from an all-time low of 25 percent in 2012 to 45 percent in last year’s survey.
However, while Japanese seem to want to see a more assertive, stronger and prominent Japan, they are also concerned over legislative change in the Designated Secrets Act and the interpretation of collective defense, not
Japanese society is at the cusp of change. A transitional change that is creating a paradigm of contradictions that is prompting Japanese to continue to lose trust in their institutions. In the overall trust index ranking of 27 countries, in 2015 Japan ranked as the most distrusting country of all with overall trust falling from 44 percent (21st) to a pitiful 37 percent. Trust in all four institutions fell, erasing the gains of the previous year. Japan is not alone though. In a year characterized by unimaginable incidents like the disappearance of the Malaysian Airlines Flight 370, the annexation of the Crimea and unrest in Ukraine, and the aggressive re-emergence of Ebola, the percentage of distrusting nations rose from 33 percent in 2014 to 48 percent. Yet, many of these unimaginable incidents did not directly impact Japan. What is driving the lack of trust in institutions in Japan?
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to mention proposed changes to Japan’s famous pacifist constitution. Japanese also welcomed a weaker yen, one of the core elements of PM Abe’s “Abenomics.” However, the reality of higher import prices and tightening of the household budget is also making them wary of the short term impact of this economic policy. Japanese are squeezed between the contradiction of the desire for a more politically and economically robust Japan and the fear and concern over the pain that is needed to achieve that desire.
One of the interesting things about global trust in media is that it is often countries where government control over the media is strongest that have the highest trust. China, UAE and Singapore feature regularly in the most trusting nations along with India and Indonesia. We believe this is because of the important role that the media plays in nation building. Until the late 1980s the role of Japan’s media could also be described as one of nation building. The media lost this role following the bursting of the asset bubble and Japan’s slow drip retreat from global prominence. This was mostly due to the fact that there really was not much to boast about in terms of nation building over those two decades. Having lost its primary role, but not yet equipped well enough to play the role of a more investigative Fourth Estate, Japan’s media continued to try to influence public opinion, sometimes by loosely interpreting facts or positioning them in an artificial manner. This came to a head last year when the CEO of the Asahi Newspaper was forced to publicly apologize for major misreporting over the comfort women issue and the actions of workers at the Fukushima Nuclear Power Plant. This shocked normal Japanese. For the first time it was publicly revealed that not everything published by the media is the truth. This has resulted in trust in media in Japan falling to the lowest level of any country but Turkey. Japan’s media also is stuck in contradiction. The contradiction of wanting to continue to play a nation building role but without the credentials to fulfil that role, or having a new role to replace it. The tsunami of globalism is impacting business in Japan. While becoming more global is a prerequisite for a return to the world stage, the pressures of the global standard is forcing Japanese companies to seek higher returns on equity and demand more from their employees, whether it be English language skills or the ability to work in a more culturally diverse environment. This has led to a breakdown of the traditional “life employment” social contract between business and employees. In one sense, this social contract and the stability it provided was at the core of the social fabric of Japan.
It is now being challenged as Japanese businesses are faced with two contradictory roles: one as a Japanese company and one as a global company headquartered in Japan. Following the earthquake and tsunami of 2011, Japan saw a huge surge in interest in volunteerism and the work of NGOs. This greater focus actually led to a fall in trust in NGOs in Japan as it revealed a lack of transparency and accountability. While there is greater interest in NGOs and their work, the global NGOs are often seen in Japan as being finger pointers on issues such as whaling or nuclear power safety. This has been a ball and chain around the leg of trust in NGOs in Japan, which has bumped along at the bottom ever since the earthquake. While the Trust Barometer survey looks at trust in these four institutions, a contradiction can be seen in the world of communications marketing and branding. Japan’s baby boomers are quickly losing their influence as consumers as they move into retirement. Having grown up in the post war period when Japan was hardly affluent, these consumers have always been aspirational. They wanted to be like the celebrities who feature heavily in Japanese advertisements. They fell for jingles and cute characters. Now their children are about to take over the reins. A group of 20 million people in their thirties that are about to enter the life stage where their incomes will increase the most. The children were born in an affluent Japan. Will they be as aspirational and go gaga over celebrities? Or will they respond to a more western marketing? Given that the Trust Barometer shows only 19 percent of people trust information created by a celebrity on social media, we might draw the conclusion that the popular celebrity marketing model is a broken and outdated one. While change is always unsettling, it always provides new opportunities. The cusp of change in Japan is opening the way for new approaches to marketing and managing trust. It is most likely going to be the early adopters that reap the most benefits and success.
Ross Rowbury
President, Edelman Japan ross.rowbury@edelman.com 13
KOREA With Korea having dropped back into the “distrusted” category, 2014 was certainly an unpredictable year to say the least. With the exception of government, NGOs, media and business maintained trust from the previous year. The government’s significant 12-point plunge to 33 percent is also one of the biggest among surveyed countries, and is in contrast to the global, and rising average trend. The biggest event to hit the headlines last year in Korea was with no doubt the tragic sinking of the MV Sewol. In its aftermath, a frenzy of confusion and finger pointing ensued, the government and media bearing the brunt of most of the criticism. But despite an initial fallout with the media after severe misconduct in the reporting of unfolding events, the institution also redeemed itself without losing credibility. Media outlets – especially traditional media – assumed accountability for their mishandlings, setting a trend of offering on-air and full editorial apologies. The media was thus salvaged through strong self-reflection, and thus re-instating people’s faith in the media’s remit to deliver information with integrity.
– effectively giving up its voice to the media. It is clear from the results that the government will have to be more active and open in its communications with the public. It must make efforts to not be muted by the might of the media. Trust in the business sector in Korea has maintained from the previous year. However, Korean conglomerates, or chaebol, are often perceived as being family-owned, since many family members hold executive positions within the same company. In the past several years, many chaebol executives and their companies have faced legal issues due to corruption and misconduct, only adding to the public’s growing frustration. It is no wonder then that Korean companies’ CEOs are among the most distrusted sources of information, their credibility dropping this year to 29 percent (equal with government officials). In contrast, company technical experts are still the most favored when forming an idea about that company, rising to 65 percent. Yet the public still has confidence in the very same companies’ products and services, especially in terms of
In 2015, Korean businesses will need to push for more active public engagement, showing integrity in their activities and messages. With more and more Koreans – currently 51 percent – turning online to validate news information, the importance of quick and accurate information cannot be understated. Though the media has become rapid in responding to major events, it must not lose sight in the face of credibility or sensationalism if it is to remain a trusted institution in the long run. But it is no coincidence the media emerged intact through such a crisis at the expense of the government. The recent addition of four comprehensive programming channels – owned by the “big four” national dailies – added new, if not louder voices to the already busy Korean media landscape. The current government has yet to be more direct and engaging in its dialogue with the people as exemplified by the few press conferences it has held in the past two years
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innovation. Within different business sectors, Koreans trust for their country’s technological innovation is very strong, at 72 percent. They also believe business innovation is dynamic, if not at too fast a speed, with 77 percent of Koreans believing so. Most companies in Korea suffer from low credibility. However, there is still an opportunity for trusted innovation to emerge because Korean publics value technological innovation from the very companies they distrust. Riddled with corruption and scandals, they must make attempts to recover trust and reputation through transparent communication, active engagement, and above all, integrity. After all, the more a person trusts a company, the more likely they are to buy that company’s products and services.
77 percent agree that companies should do more to make a difference in the communities they serve. And so, there needs to be more social benefit, accessibility, and understanding about how companies operate. In 2015, Korean businesses will need to push for more active public engagement, showing integrity in their activities and messages.
SB Jang
Managing Director, Edelman Korea sb.jang@edelman.com
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EMERGING MARKETS All that changes, remains the same Death, taxes, and a lack of trust in the Indian government: In a constantly changing world, these things have remained constant. However, Narendra Modi has changed everything. His dramatic election victory has caused even the most diedin-the-wool Indo-pessimists to dust off their rose-colored glasses. Hope is oozing out of every crevice of Indian society and, along with it, resurgent trust. Our 15th annual trust barometer shows Indian trust in government jumping nearly 30 points to a new high of 82 percent. This comes after 3 years of relative immobility (with trust remaining between 53 and 57 percent). Indeed, the ability of the government trust score to remain utterly motionless no matter what was happening in the country, good or bad, led us to conclude a year ago that hope had deserted Indian shores and, along with it, any expectations the broader public had for the government. How quickly things can change.
A whole lot of trust going on If India’s scores are impressive, the United Arab Emirates seems to be the most trusting place on earth, at least among the 27 countries we survey. In addition to its world-leading government trust score, the UAE tops our global list for trust in two of the remaining three categories: business (85 percent) and NGOs (81 percent). Its trust in media (79 percent) is only good enough for second place; it trails Indonesia by a single point. Taken together, these scores place the UAE on top of our overall trust index at 84 percent, five points higher than India and five points ahead of its score from last year. Indeed, our five most trusting markets surveyed – as measured by the overall trust index – are the UAE, India, Indonesia, China, and Singapore. A year ago, these same five countries were in a different order within the top five (China, the UAE, Singapore, Indonesia, and India). On the
The inverse correlation between trust and the level of development suggests that trust relates specifically to the ability of institutions (both government and business) to deliver basic economic improvements... On closer examination, however, one must concede that India’s lack of trust in government in past years has been an anomaly both within India and among its peers in the developing world. Indian trust in the other institutions we measure has traditionally been quite high, and this year, it increased again regarding three of the four institutions we track (government, business and media). Only trust in NGOs remained static as compared to last year. Freed from the necessity of mistrusting its own government, India has catapulted to second place on our overall trust index this year (with a score of 79), up from an already impressive fifth place a year ago. Moreover, resurgent trust in government places India back within its peer group of emerging markets. Only the UAE has a higher government trust score (90 percent); China (tied with India at 82), Indonesia (72), and Singapore (70) round out the top five in our survey.
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face of it, both the high ranking of certain markets and the strong year-by-year consistency are surprising. Each year, for example, the consistently high levels of trust in China are questioned based on the hope that there is a correlation between trust and democracy and/or between trust and an independent press.
Trust vs development? The diversity of high-trust markets leads one to wonder what these markets have in common. What societal characteristics underpin the levels of trust exhibited by various markets, and what causes these trust levels to change over time?
Our top-five list includes a constitutional monarchy, the world’s largest democracy, and a single-party communist state. Our five least trusting markets according to the trust index are all democracies (Japan, Ireland, Turkey, Sweden and Spain). Clearly, the style of government is not the decisive factor. While political scientists will be disappointed, economists may be somewhat happier. There seems to be a much greater correlation between trust and economic development, and the relationship seems to be an inverse one. Eight of the top 13 countries on the trust index are emerging markets; nine of the bottom 13 are developed markets. Canada, Australia, France, the United States, Germany, Italy, and the UK have overall trust scores between 53 at the high end (Canada) and 46 at the low end (the UK).
In the final analysis, it seems that the most volatile and therefore the most influential ranking in our survey is that of the government trust score. The inverse correlation between trust and the level of development suggests that trust relates specifically to the ability of institutions (both government and business) to deliver basic economic improvements – jobs, growth, availability of consumer products, etc. Interestingly, one could argue that governments in developed markets have delivered high levels of economic success over extended periods of time and therefore deserve high levels of trust. The fact that this is not the case suggests that greater success breeds increased demands and that economic development engenders greater – not lesser – expectations. Watch out, Mr. Modi.
The exceptions that prove the rule? There are clearly exceptions: the Netherlands is a developed market on the top end (sixth place, with a score of 64), and South Africa is a prominent emerging market that is a net “distruster” (16th of 27, with a score of 48). Digging deeper, however, it becomes clear that much like pre-Modi India, these rankings are skewed by government trust scores that are out of line with those of their relative peer groups. The Netherlands exhibits abnormally high trust in government (65 percent). Among other developed markets, only Sweden scores above 50 (59 percent). South Africa, on the other hand, shows the lowest score of any country surveyed in terms of trust in government at 16 percent, one point lower than a year ago. Indeed, this is the lowest score for any country for any institution in the entire survey. Its other scores are higher – business at 64 percent, NGOs at 61 percent, and media at 52 percent.
Robert Holdheim
CEO, Edelman South Asia, Middle East and Africa robert.holdheim@edelman.com 17
INDIA Political change boosts trust and brings optimism Perceptions about institutions are often determined by the personalities at their helm. There is perhaps no better proof of this than the massive increase in public trust in government since Mr. Narendra Modi became the Prime Minister of India in May last year. From 53 percent according to last year’s Trust Barometer, to a whopping 82 percent now, this rising trust in government appears to be the direct outcome of the change in political leadership that the country witnessed in the last year. From an election campaign where he spoke the language of economic development, rising above established fissures of caste and community, to running a government that – at least in public perception – is focused on delivery over debate, the new Prime Minister has been able to sell hope. He has been able to convince people that he can lead them out of a period of stunted economic growth, and his government can help the country realize its fullest potential in growth and development.
Traditional media – print and television – have seen their base erode a bit, with online sources rising in public perception as trusted platforms to access news and opinion. This trend has been very apparent in recent elections in India. Almost mirroring the Prime Minister’s faith in the free market and in industry as the vehicle to spur economic growth, public trust in businesses has also risen over the past year. People have renewed their trust in big business – large conglomerates with an increasingly international footprint that are seen by the people to be engines of growth, employers of choice, and ambassadors of India to the world. NGOs, generally a trusted entity in India, have seen a slight dip in trust. A range of protests by NGOs over the past year against nuclear power saw the government strike back, accusing them of pushing foreign or anti-development agendas. Media reports about government scrutiny into the
Rising trust in government appears to be the direct outcome of the change in political leadership that the country witnessed in the last year. The general optimism that the Modi government has brought in is reflected in the higher trust people are reposing in business – a feeling that the country will do better, that people will prosper, that economic development will improve the life of the common man. However, this expectancy could be a double-edged sword. The public expectations fueled by this trust will have to be met very substantially, with results beginning to come in quickly. Public patience can begin to run out fast, and disenchantment can grow in no time. The results of the 2015 Edelman Trust Barometer for India indicate a very impressive 29 percent per cent point increase in trust in government over the last year. Trust in business and media has risen by a modest five percentage points to 84 percent and 76 percent respectively in the same period, while NGOs have seen public trust in them go down by one percent. While the general levels of trust in the media remain high, there is more to this story than just that generalization. 18
funding sources of NGOs and the recurrent government narrative that NGOs are acting against economic development may have caused an erosion in trust in NGOs and their representatives. Another important trend is the reaffirmation of peers as one of the most trusted entities. In the online space, this is reflected in the increased trust in bloggers over traditional editorializing media. Friends, family, and peers are now the most trusted creators of content and opinion. As more and more Indians embark on the digital highway, they will, as in the rest of the world, break traditional influence structures and rely more on people in their own circle to shape their worldview. Reaching out to individuals in this “flat world” will be a challenge for companies and government alike. As a country, India seems to be more open to embracing new technology and trusts industry to implement new ideas and technologies. Whether it is cloud computing or electronic payment systems, trust in technological innovations remains high, far outstripping average global trust levels.
Most importantly, public trust in business and industry is a mix of two seemingly dissimilar traits. Trust increases when industry acts to help the individual lead a fulfilling life, but falls when industry is seen to fail to contribute to the greater good. Thus, businesses have to ensure that in the quest for profits, they not only benefit the individual, but also the community. The benefits of increasing trust are numerous – people not only prefer the products of companies they trust, but are more than willing to even defend them if need be. Public trust in business can thus be the greatest force multiplier – a hedge against risk, and the best form of endorsement.
Rakesh Thukral
Managing Director, Edelman India rakesh.thukral@edelman.com 19
SOUTH AFRICA When considering the most pressing issues facing South Africa, trust, or rather a lack of trust, is often central. From party politics to power generation and from e-tolling to transformation, the question of trust is ubiquitous. For the past 15 years, Edelman, a global communications marketing company, has surveyed international markets regarding what builds trust and what diminishes it. From this research, we can discern the views of two groups regarding trust: 1) “informed publics,” individuals who are universityeducated, in the top 25 percent regarding national income, and regular consumers of media, and 2) the broader “general public,” which represents the demographics of the country in terms of age, gender, and religion. Ten years ago, we saw “someone like me” emerge as the most trusted source of information. This changed when people discovered that their neighbors might not be the best source of information on subjects like medical procedures or child-rearing techniques. In 2009, following the economic downturn, the public placed its trust in government, only to shift that trust toward business in subsequent years. This year, we have seen three trends emerge in South Africa: the impact of innovation on trust in businesses, a deficit in trust in CEOs and company leadership, and the continuing shift in trust in online content.
Despite comparatively high levels of trust in businesses, CEOs and boards of directors experienced a dramatic slide in trust in 2014. When asked about the most credible sources of information to use when forming an opinion about companies, the general public’s level of trust in CEOs and boards of directors in South Africa fell by 11 percent, to 58 percent and 54 percent, respectively. While the Trust Barometer does not identify the specific reasons for this decrease, there is a marked contrast between CEOs and technical and academic experts, who are viewed as the most credible in terms of building trust at 78 percent and 80 percent, respectively, within the same test group. Eskom’s interim spokesperson, Andrew Etzinger (client), is an example of someone who has leveraged technical knowledge to build credibility. Mr. Etzinger simultaneously serves as the face of Eskom and general manager of integrated demand management. While Eskom has faced its share of challenges in the media, he is widely viewed as a trustworthy source of information on the parastatal. Overall, South Africa’s parastatals are lagging in terms of trust, with only 16 percent believing they will do the right thing; the global average for trust in state-owned enterprises is 50 percent. It appears that state-owned companies are being impacted by a general lack of trust in governments.
This year, we have seen three trends emerge in South Africa: the impact of innovation on trust in businesses, a deficit in trust in CEOs and company leadership, and the continuing shift in trust in online content. As South African companies strive to innovate in an increasingly competitive marketplace, two camps have emerged within informed publics: 47 percent believe innovation is occurring too quickly, while 39 percent believe it is occurring too slowly. This result mirrors the international data suggesting that people are beginning to question the speed of innovation and the impact it is having on their lives.
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Globally, trust has reached a new low, with 42 percent of the public trusting in government. In South Africa, the lack of trust is more acute, with only 16 percent of the general population expressing confidence that the government will do what is right.
In light of this bleak look at the levels of trust in public institutions, the business sector has a unique opportunity. Results indicate that “companies I use� are highly trusted (69 percent) to inform their customers. In fact, according to the Trust Barometer, content generated by trusted companies is seen as more credible than that generated by journalists, family, and friends. This provides an enormous opportunity for companies that are prepared to develop their own content and engage customers. The traditional role of media as the interpreter and arbiter of a company’s brands is diminishing. In fact, as Internet access expands in South Africa, this trend will continue. Progressive organizations are already planning to communicate directly to consumers, and customers are bypassing traditional media and advertising.
Tod Donhauser
Managing Director, Edelman South Africa tod.donhauser@edelman.com
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UNITED ARAB EMIRATES The United Arab Emirates bucked international trends as trust rose among informed publics in Edelman’s 2015 Trust Barometer. The UAE became the most trusting nation in the 27-country global trust index, with 85 percentage points. Despite ongoing instability across the Middle East region, with crises prevalent across Syria, Iraq, and Lebanon, the UAE has actively positioned itself as the economic hub of the region, attracting investors, bilateral partnerships, and a steady flow of expatriates to support the expanding economy.
The significant focus and commentary on international aid provided by the UAE over the past 12 months, particularly across the Middle East region, may have resulted in increases in the levels of trust in both the government and NGOs. Organizations such as UNHCR and the Red Crescent have been increasing support for and awareness of relief efforts throughout the UAE. Increased transparency in media, coupled with the credible use of online media, is arguably a contributor to the significant (+9 percent) increase in trust in media.
The pace of development and changes in business and industry in the UAE today are too fast for a majority of respondents (84 percent), which reflects the national focus on innovation. The fieldwork conducted in the last quarter of 2014 did not coincide with major events that would unduly influence the results. This indicates public trust in the UAE Government to act in the best interests of the country from an economic and political perspective.
Trust rising significantly across all institutions Trust in the four major institutions to do what is right increased over the past year according to informed publics, with government remaining the most trusted (90 percent), followed by business (85 percent), NGOs (81 percent), and media (79 percent). By comparison, global data indicated an alarming evaporation of trust across the four institutions, with trust reaching levels comparable to those seen in the recession of 2009. Globally, informed public respondents register trust levels below 50 percent in half of the countries surveyed. The increased trust in government may be attributed to the UAE’s consistent efforts to return the economy to a state similar to that seen before the collapse of the property market, along with an increased focus on international partnerships to support the development of knowledgebased industries in the UAE.
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Media as a source of information Online search engines continued to be the most trusted source of general news and information in the UAE (86 percent), followed closely by traditional media (79 percent), these values being significantly higher than the global averages (64 percent and 62 percent, respectively). Informed publics also indicated that their sources of information varied based on the types of information being searched for. Newspapers remain the preferred first source of general information about business, whereas television was the preferred source for breaking news and the preferred means of validating news found. Globally, online search engines were the preferred or equally preferred source of information across all three information types. Trusted spokespeople in media received the highest levels of trust, with company technical experts (74 percent), government official or regulator (72 percent), academics (71 percent), and CEOs (70 percent) being the most trusted representatives of a company.
Rates of trust in innovation unparalleled The pace of development and changes in business and industry in the UAE today are too fast for a majority of respondents (84 percent), which reflects the national focus on innovation. The realization of a number of major developmental milestones over the past year, including a focus on industrial development (aviation and aluminum) and an increase in tourism and bilateral relationships, has dominated the business news agenda and may have led to perceptions of rapid development. Despite this wariness regarding the speed of development, trust was significantly higher than the global average, particularly as follows: •
Electronic and mobile payments (UAE: 90 percent; Global: 69 percent)
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Electronic and personal health trackers (UAE: 81 percent; Global: 59 percent)
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Cloud computing (UAE: 76 percent; Global: 55 percent)
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Hydraulic fracturing (UAE: 84 percent; Global: 47 percent)
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Genetically modified foods (UAE: 68 percent; Global: 32 percent)
For those that cited a decrease in trust in business, the primary reasons were that some businesses failed to contribute to the public good, failed to provide public services, and did not support the respondent and his or her family to live a fulfilling life. Trust was consistently high across state-owned (89 percent), family-owned (84 percent), and big business (86 percent) in the UAE, far surpassing global levels. The focus on social investment and the support of the local community is expected to continue to be a focus for UAE businesses as corporate citizenship initiatives grow. The levels of trust on the part of the general and informed publics remained consistent across the UAE throughout the past year. With ongoing efforts on the part of government and business to support economic growth, along with an increased focus on responsibility, transparency, and social returns, trust across all institutions remains stable at levels that are significantly higher than those of other nations around the world.
However, a majority of informed publics is eager for more testing of new developments (78 percent) and for additional public information about testing to be made available (88 percent).
Building trust in business Across the UAE, 90 percent of respondents agreed that a company can take specific actions that both increase profits and improve the economic and social conditions in the community in which it operates, which reflects the UAE’s focus on delivering social and economic returns to the nation. The primary reasons for increased trust in the UAE were that businesses have encouraged the public to adopt healthy lifestyles and helped the public access a range of public services.
Nicola McAlpine
General Manager, Edelman United Arab Emirates nicola.mcalpine@edelman.com
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SOUTHEAST ASIA & AUSTRALIA TrustFeed Southeast Asia 2015: for elections, innovation, and celebrities, TrustFeed has you covered Welcome to the first edition of TrustFeed, a hybrid-media, list-obsessed outlet powered by a very amateur citizen journalist. As we look across Southeast Asia (results for Indonesia, Singapore, and Malaysia) and Australia, we will attempt to uncover some hidden trust gems that will help make your day a whole lot more trusting and, of course, fabulous. Here are three lists that should help you understand trust in SEAA further.
In elections we trust -- Which SEAA countries need to call a snap election? Our evidence clearly shows that elections boost trust in government. Elections boost trust in government, but it doesn’t last long. Our data have shown that on average, trust in government starts to drop within 12 months of an election. Using our TrustFeed data, we offer our recommendations regarding which countries’ governments might want to consider a snap election. Australia: PM Abbott had a tough 2014, and trust in government has dropped seven points since last year, putting Australia alongside a group of governmentdistrusting nations that includes South Africa, Hong Kong, and South Korea. TrustFeed election recommendation: Go to the polls. NOW! Singapore: The topic of the next election and when it will be called by Prime Minister Lee Hsien Loong is a hot one among the chattering classes. A five point drop in government trust in Singapore would indicate the need for a snap election. However, Singapore’s government has one of the highest trust ratings across our surveyed countries.
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TrustFeed election recommendation: Keep them guessing for a while longer. Malaysia: 2014 was an extremely tough year for the Malaysian Government for a host of well-documented reasons. With the last election being held in 2013, the ongoing slide in trust in government will continue to be a concern. The one bright spot on the horizon is the hope that trust in government in Malaysia could go up as it takes on the presidency of ASEAN. TrustFeed election recommendation: The head says to call a vote; the heart says wait it out. Indonesia: As Stephen Lock of Edelman Indonesia has pointed out, the Jokowi effect is clearly helping to drive trust in government. A 19-point swing in trust in government is a huge boost. However, in a trusting nation like Indonesia, government remains the least trusted institution. TrustFeed election recommendation: Ride the wave, Mr. President, but the fundamentals still need to be fixed.
Here is our list of the BEST and WORST places to be a celebrity and produce and share content The good and intelligent people at Edelman (the owners of TrustFeed) have long discussed the credibility of spokespeople in terms of delivering trusted information. This year, with the continued democratization of content creation and sharing, the Trust Barometer has considered who we really trust when it comes to the authoring and sharing of content across social media, content-sharing sites, and hybrid news outlets. At TrustFeed, we think this is a fantastic new addition, mainly because we can look at how celebrities fare across SEAA as trusted authors and sharers of content.
The worst place to be a celebrity content creator: Australia No one trusts you, Rusty Twenty-three percent of respondents in Australia trust celebrities as authors of content or as content sharers, putting celebrities’ way Image source: Getty Images down the list. Australians are living up to the ethos of mateship in that they trust their friends and family. The best place: Indonesia Despite being the lowest ranked source, celebrities are trusted by 53 percent of respondents in Indonesia. Academics and experts have a 36-point head start on celebrities, so the tried and tested endorsement of products still has legs in Indonesia.
Australians hate the cloud: 70 percent of Australians don’t trust cloud computing. Wrap this up with the ongoing issues around broadband roll out and Australians’ famous appetite for file sharing, and you can see the need for the cloud computing industry to change its narrative in Australia. Genetically modified foods have a huge job to do: The rightfully cuisine-obsessed nations of Malaysia, Indonesia, and Singapore have a significant distrust of genetically modified foods. Given this issue and the nascent food source labelling regulations in the region, competitors that clearly demarcate themselves as being GMO-free could obtain a significant trust boost. Business needs to articulate a narrative about its role in helping the greater good: In every nation across SEAA, overwhelmingly, respondents indicate that they trust business less if it does not contribute towards the greater good. On the flipside, if business can produce economic growth in Malaysia, Indonesia, and Australia, this will pay dividends. The path forward in terms of business narrative is to start with a clear story about how businesses help the greater good and then quickly move into the benefits for individuals and their family units.
Luna Maya, a popular Indonesian actress, who enjoys a broad brand ambassador portfolio. Image source: Creative Commons
Four trust facts that might change your perception of innovation in Southeast Asia and Australia
The pace of development and change in business and industry is deemed to be too fast across the majority of the globe. Slow down Singapore: 73 percent of Singaporeans feel that the pace of development and change in business and industry is too fast. This points to some challenges for Singapore as a business hub, even though the government’s ongoing policies are geared toward demonstrating Singapore’s desirability as an innovation hub.
Iain Twine
CEO, Edelman Australia iain.twine@edelman.com 25
AUSTRALIA “No one’s buying what you’re selling”: Trust in Australia declines as broken election promises, economic challenges, and rapid innovation and change within business drive uncertainty In Australia and perhaps most of the world, 2014 and the beginning of 2015 feel different. Locally and globally, we have witnessed unprecedented signals of uncertainty. In Australia, the 2015 Trust Barometer shows a decline in trust in all four institutions of government, business, media, and NGOs. What should organizations of all types do and say in an environment in which it is harder than ever to earn trust?
What happens when no one is buying what the government is selling? 2014 was the year the new Prime Minister, Tony Abbott, needed to deliver on key election promises to abolish carbon and mining taxes and “stop the boats.” Significant trade pacts were signed, a new budget was delivered — if not implemented to great effect — and the divisive Palmer United Party, with its balance of power, has begun to splinter. However, just 15 months after his confident election night pledge to give Australia a competent and trustworthy government, Prime Minister Tony Abbott and his
Part of the problem is that Tony Abbott and the Coalition campaigned hard on the issue of trust, calling for the end to Julia Gillard’s “lies” and promising a government that could be trusted to deliver what it promised. The new government brought fresh hope regarding leadership after a long period of division, constant bickering, and political infighting. However, this was not the case, and several political blunders and broken promises throughout the year meant that the breach of trust between government and the governed felt even more severe. This was most acutely felt when the Coalition delivered its budget in May of 2014, one that not only broke election promises but also introduced new “reforms” never mentioned before the election: big changes to everydaylife policies on health, education, and welfare. Well-loved institutions such as the Australian Broadcasting Corporation (ABC) and the Commonwealth Scientific and Industrial Research Organization (CSIRO) were hit with significant budget cuts. This took the electorate by surprise and shook their faith in the government. The usually affable breakfast
What should organizations of all types do and say in an environment in which it is harder than ever to earn trust? government are languishing in terms of public esteem. This steady decline in public opinion has been mirrored in this year’s Trust Barometer. In the wake of the Liberal Coalition government victory, the 2014 Trust Barometer showed a 13-point increase in trust in government since 2013. However, this year’s data show a decline in overall trust in government by Australians – a seven-point drop from 56 percent to 49 percent in the eyes of informed publics, a decline exceeded globally only in Malaysia and South Korea. In part, this is due to post-election disappointment – a correction of the “grass is always greener”/”hope” spike new leaders represent, a trend we see in the data from India and Indonesia for this year as well. More significant was the fact that the new government failed to establish trusted leadership in the hearts and minds of Australians. 26
TV host Karl Stefanovic berated the Prime Minister, shouting “No one is buying what you’re selling!” in an interview with Tony Abbott about his government’s budget. Abbott insisted that the problem was one of communication, not substance. “Maybe, our communications could have been more effective; maybe, at times when we were preparing the budget, we should have been also communicating the strategy as well,” he said. The Trust Barometer supports this idea. In today’s atmosphere of skepticism and distrust, communicating frequently and honestly (47 percent) and transparently and openly (51 percent) are actions that build trust among Australians.
Stefanovic and even radio shock jock Alan Jones have been indicators of the frustration Australians feel when the core principles of trust – the motivation and capacity to act in their interests – are called into question. Also, in an environment of increasing uncertainty, leaders of all sorts are under more pressure to provide clarity regarding the future direction. As Tony Abbott recognized, “communicating the strategy” – where we’re going and why – helps create the sense of confidence that is a key condition for trust, as does explaining the context for the decision-making process around specific issues.
The key point is that while Australians seek leadership and confidence regarding what comes next and new technology creates excitement and hope for the future, the Trust Barometer shows that this new technology is also a source of uncertainty. Currently, 53 percent of the informed public believes the pace of development and change in business and industry in Australia today is too fast.
What now for Australia? Innovation and business leadership
1. Be clear and specific about the benefits to users and the community at large. The main reason stated for decreased trust in business in Australia was that it failed to contribute to the greater good (67 percent, informed public) or provide public services (44 percent, informed public). Business innovation that is seen as making things better for people and our nation will create trust. While communication is critical, the perception of the role of the company as a whole and its overall approach to innovation are central to innovating with integrity.
Within the current context, we should expect
continued attention to “what’s next” for business and industry, which is a driver of prosperity for the community at large. However, for the first time since the Global Financial Crisis of 2009, trust in business has dipped below our trust in government. The 2015 Edelman Trust Barometer revealed an 11-point decrease in trust in business among the Australian informed public, with the trust level falling to 48 percent. For the first time this year, we have used the Trust Barometer to examine fast-changing technology and innovation and its effects on trust. This is a central issue for Australia as we contemplate a future in which traditional manufacturing operations are struggling for survival – Toyota, Alcoa and SPC Ardmona being high-profile examples in 2014. With the mining boom over, both in terms of employment driven by major capital projects and commodity prices, that free ride is coming to an end. It’s not clear where tomorrow’s economic and employment opportunities lie. It’s important to understand Australia’s aspirations for a globally competitive future as well. The “smarter not harder” message (especially relative to our lower-cost regional competitors) will resonate. Careers in advanced manufacturing and industry seem to carry more prestige than service roles in sectors such as retail, tourism and hospitality. For many Australians, the idea of a career making coffee is less satisfying than one making Holdens or bionic ears. Manufacturing desirable products and being the country of origin for game-changing technology strokes our individual and collective egos and feeds our need to compete with other countries.
The findings are clear regarding what business needs to do to create competitive advantage by accelerating trust in new technology and innovation:
2. Be transparent about performance. Involving external stakeholders in the innovation journey is challenging but extremely helpful in driving trust in outcomes. If fact, 77 percent of the Australian informed public stated that making test results available publically for review would increase trust in industry’s ability to implement technological changes. How organizations manage and communicate about the innovation process builds trust. Third parties – especially in academia – are an important source of reassurance. Sixty-nine percent suggested partnering with an academic institution, and 59 percent said partnering with an NGO would increase trust in industry’s ability to implement technological changes. 3. Overall reputation matters, especially when people don’t trust governments to effectively align regulations to technology. Currently, 41 percent of the Australian informed public believes government is not sufficiently regulating change. Ultimately, trusted companies will be given license to try new things in their markets.
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4. Current customers come with a level of trust that is built-in – they have already chosen you and will be relatively positive towards the things you have to say. One-third of the Australian informed public (34 percent) do trust information posted on social networking, content-sharing, and online information sites that have been created by companies they patronize. They form the nucleus of adopters of new products and services and can provide the best, most trusted communications channel to new customers. To return to the first principles of trust – the belief that another has the motivation and capacity to act in one’s own interests – we encourage businesses to recognize the current challenging conditions as an opportunity to demonstrate leadership and participate effectively with stakeholders. We believe that when people are cautious in conferring trust, the opportunity to gain competitive advantage by building quality relationships is a significant one.
Group dynamics when trust is tightly held While our data collection occurred in October and November of 2014, after the emergence of issues such as the Ebola crisis, ongoing Islamist activity, the Financial Services Inquiry, and the Malaysian airline disasters, it predates the Martin Place siege, Cairns stabbings, Charlie Hebdo attacks, Sony hack, and Air Asia disaster. In this continuing atmosphere of fear and uncertainty, we should expect to see behaviors and discourses that represent skepticism and a flight to the security of social groupings that provide people with a sense of order and care. The Trust Barometer shows us this kind of behavior in the trust attributed to people like myself, as a highly credible spokesperson (55 percent), and friends and family, as the most trusted source for information authored on social media and online content-sharing sites (70 percent trust). At times like this, understanding these group dynamics as driving instinctive behaviors becomes increasingly important. As marketing academic and evolutionary psychologist Gad Saad puts it, “human sociality is in part driven by the evolutionary imperative to form bonds of reciprocity.” These bonds enable effective relationships with groups outside of family units for mutual benefit.
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Group membership – the feeling of shared identity and values between people – creates an environment in which trust flourishes, progress towards shared goals is accelerated, and threats from outside the group can be mitigated. We have seen strong group identity signaling responses to recent crises, including “Je suis Charlie” and #illridewithyou – standout examples of the human significance of statements of affiliation and the power of social media to amplify them. For businesses, it’s crucial to focus on key stakeholder groups and create meaningful connections based on shared values and a sense of identity. This, in itself, is a competitive exercise. Research including the “Dunbar number” suggests that there is a cap on the number of such relationships, and we should expect each of those trusted relationships to be under scrutiny, that is, tested for relevance and integrity. Internally, this process should start with a renewed emphasis on employees and extend to embrace key external groups (particularly academia and NGOs) that demonstrate shared values and the ability to nurture trusted relationships. For brands, communications and marketing teams may well make it their mission to defend, enrich, and expand their stakeholder groups.
Tim Riches
CEO, Edelman Australia tim.riches@edelman.com
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INDONESIA The “Jokowi effect” In 2014, Indonesia went through an apparently transformative and historic presidential election, with President Joko Widodo and his new government assuming office in October of last year. The election of the new president appeared to usher in a new chapter for Indonesia, one of optimism about the future, what the country can achieve, and what its new political leaders mean for the country’s future. The 2015 Edelman Trust Barometer is the firm’s 15th annual global trust and credibility survey, and this is the seventh year it has been conducted in Indonesia. The survey looks at trust across business, government, media, and NGOs. The research surveyed 1,000 people from the general public in Indonesia, plus an additional 200 members of the ‘informed public’ (top-quartile income, college educated, and self-identified active media consumers), as part of the 33,000 total people surveyed in 27 countries.
opportunity for business leaders to drive and comment upon the national change agenda. For instance, CEOs are more trusted in Indonesia than the global average, with a 15 percent lead (56 percent in Indonesia are trusted vs. 41 percent globally), and as idea starters, CEO content creators have a 75 percent trust ranking in Indonesia, compared to 46 percent globally. The big changes in the results for Indonesia this year though appear in Indonesia’s change in attitude towards government and government leaders. Our most striking result shows that trust among Indonesians in “government in general” has rocketed up 16 percent from our 2014 results to 65 percent among the general population (the highest for years) and even higher among the informed public, which experienced a 19 percent increase, up to 72 percent. This clearly demonstrates Indonesia’s renewed optimism in its leadership, as well as its hope that this new government may well be able to move Indonesia forward in areas where the last government – blighted by numerous corruption scandals and slow-moving decision making – failed to do so.
Our results show that Indonesia continues to be one the most trusting countries in the world, ranking third globally, with a 67 percent trust index among the general public. The trust index is an average of a country’s trust in the institutions of government, business, media, and NGOs. Trust in business continues to be at an all-time high, having even increased two percent from last year to reach 84 percent. This is tied for the second highest in the world, showing that for Indonesia, business continues to maintain its license to lead the debate regarding change and play a central and trusted role in Indonesian society. This gives a tremendous
This result is also remarkable given that when our trust survey was conducted in Indonesia, the new government was just pushing through a cut in the country’s hugely expensive fuel subsidy, which previously accounted for 15 percent of the state budget. This was a bold and controversial move that sparked violent protests in the past. The fact that the new government managed to push this reform through without major protests demonstrates its confidence and willingness to make tough decisions. President Widodo was also effective in communicating how the around $18
In fact – and contrary to what western media says – Indonesia remains quite politically fragile, and 2015 could bring dramatic, unforeseen changes. 30
billion in estimated savings will now be better targeted towards the poor and ploughed back into social security programs, health, education, and infrastructure.
traditional media cannot take its generally high trust ranking for granted, especially with the increasing use of and considerably higher trust in online search and news sources.
Further demonstrating this renewed optimism in government leadership, when we looked at the trust and credibility levels regarding various groups of spokespeople, “a government official or regulator” saw an 11 percent increase among the general public, up to 39 percent. While the rating is still low compared to other groups, the “Jokowi effect” and his new government certainly seem to have helped this number rise. Still, perhaps this is not strong enough to compensate for the dozens of other Indonesian leaders – especially at the local level – who fill the courts with corruption. Even the popular new president is not immune from scandal, which could pull his rating and the high level of trust in government generally, back down. The recent negative popular outcry Jokowi has endured over his mishandling of the proposed chief of police is just one example of how high expectations can once again give way to cynicism and distrust (the appointment of the new Attorney General was another such instance, giving the sense that Jokowi is “weak” on human rights and justice policy according to the “left”). President Widodo, with his reputation for clean governance, has now been embroiled in his first major scandal, with pointed questions being asked about whether he is bowing to party pressures and Indonesia’s old political patronage to maintain continued party support. There may even be the possibility that our trust survey captured “peak Jokowi.” He presently faces brickbats from the social liberal left – his core supporter base – and he is still yet to achieve an effective modus operandi with the DPR (parliament) in which his coalition currently only controls a minority.
Trust cannot be taken for granted. If Indonesians fail to see tangible change or a government once again entangled in the same kind of repeated scandals that embroiled the previous administration, you can bet that this trust advantage will fade away quickly. Worse still, a failure to deliver on the part of Jokowi may well lead to something more dangerous: disenchantment with the democratic process itself. Ironically, this is what the opposition leadership wants: a return to “managed democracy.” In fact – and contrary to what western media says – Indonesia remains quite politically fragile, and 2015 could bring dramatic, unforeseen changes.
Another interesting finding this year, which again seems to be driven by the recent parliamentary and presidential elections, is the decline we see in trust in “traditional media” (defined in our survey as mainstream media sources, such as newspapers, magazines, TV, and radio news), which was down five percentage points this year. The recent presidential election was the closest and most polarizing Indonesia has seen so far, with rival media groups often backing favored presidential candidates with highly partisan and favorable coverage dictated by their oligarchic owners (many of them candidates themselves or backers of specific candidates). The use of carefully selected sources and a number of “black campaigns” that came to the surface during the presidential election may account for this decline. The debate it started regarding journalistic ethics and neutral reporting is a relatively new one in Indonesia – unlike longstanding arguments over media bias in the western press – and 2015 presents a challenge for the mainstream Indonesian media in that they must regain their credibility. While this result may be purely driven by the recent election coverage, it is an interesting warning that
Stephen Lock
CEO, Edelman Indonesia Head of Public Affairs for Southeast Asia stephen.lock@edelman.com 31
MALAYSIA Global uncertainties and challenging local events contribute to less trust in all Malaysian institutions Malaysia’s fourth edition of the Edelman Trust Barometer 2015 revealed a drop in trust across all four key institutions, broadly mirroring the overall global results. Most notably, trust in media fell 13 points to 46 percent, and trust in government dropped nine points to 45 percent. This extended the erosion of support for these two institutions seen in the previous annual survey. Numerous events and issues in 2014 – including three tragic aviation incidents – put Malaysia on the global radar and highlighted higher public expectations regarding engagement and integrity from both government and media. 2014 was a challenging year for Malaysians, with world events conspiring with domestic issues to produce a perfect storm. Globally, the Ebola pandemic, cybersecurity concerns, ongoing conflicts in the Middle East and North Asia, and a drop in oil prices have coupled with the domestic rationalization of subsidies and slide of the ringgit to diminish trust. The uncertainties emanating from such events have seen trust in business register a five-point drop, partially reversing a nine-point jump seen in the previous survey. Still, trust in business suffered the smallest fall among the four institutions due in part to Malaysia’s steady economic growth and the positive outlook for 2015.
Among businesses, big companies remain the most trusted in Malaysia because of their ability to unite profits with social consciousness. This sentiment is generally shared across the developing world, but this pattern is not reflected globally, where family-owned businesses remain the most trusted type of enterprise. Non-governmental organizations (NGOs) retained their status as the most trusted institution in Malaysia, but the level of trust in NGOs still fell eight points. Part of the drop can be attributed to extremist voices in Malaysia using NGOs as proxies for their campaigns, focusing on noise rather than the ability to shape and influence policy. It also reflects the global trust scores. Out of 27 countries surveyed, trust in NGOs fell or stayed the same in 19 of them. The decline in trust in Malaysian media may reflect a need for balance and transparency in reporting over the past year. This was highlighted by Malaysia’s plunge to a historically low ranking of 147 among 180 countries in the 2014 World Press Freedom Index. Amid concerns about press freedoms and media independence in Malaysia, it is no surprise that online search engines surpassed traditional media as the most trusted source for general news and information by 22 points.
Numerous events and issues in 2014 – including three tragic aviation incidents – put Malaysia on the global radar and highlighted higher public expectations regarding engagement and integrity from both government and media. While trust in business fell, trust in business leaders rose by six points. In Malaysia, chief executive officers (CEOs) are seen as being among the most credible spokespeople. This is highlighted in the 17-point gap between Malaysia and global trust scores because globally, the credibility of CEOs as spokespeople has dropped to 43 percent. Despite the decrease in trust across all institutions, there was a surprising overall increase in the credibility of spokespeople in Malaysia, and technical experts and academics remain at the top of the list.
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Structural economic policy shifts, a perceived lack of transparency during the aviation tragedies, and various issues related to freedom and human rights were major contributors to the erosion of confidence in the government for the second consecutive year. A rise in racism and religious extremism, controversy surrounding the sedition law, an increase in human trafficking, and an unpopular decision to abolish fuel subsidies tested the public’s trust levels. These points must be seen, however, in the context of the government arriving at the mid-point of the Economic Transformation
Programme and making good progress in improving public transportation, public delivery services, and education. This year’s Trust Barometer also took an unprecedented look at trust and its connection to innovation and the acceptance of technological advancements. Consistent with the global results, more than half of respondents in Malaysia believe the pace of development and change in business and industry is too fast. The majority of respondents (58 percent) also feel that new developments in technology are not being tested enough, with a definitive 87 percent of respondents wanting to see test results made public for review. The Edelman Trust Barometer 2015 shows that Malaysians are generally a trusting lot regarding business innovation. Compared with the global results, overall trust in innovation is comparatively high across all industries. Innovation in the technology industry – including electronic and mobile payments – is the most trusted by Malaysians. The overwhelming majority of Malaysians (86 percent) believe that companies can take specific actions that both increase profits and improve the economic and social conditions in the communities in which they operate. The weight of public expectation showcases the importance of businesses embracing their social responsibilities for the benefit of all parties. Malaysians believe that social purpose does not mean compromising on core business goals but should be part of a company’s overall strategy.
Raymond Siva
Managing Director, Edelman Kuala Lumpur raymond.siva@edelman.com 33
SINGAPORE Singapore is still very trusting but skepticism is growing Singapore remains one of the world’s most trusting nations in this year’s Edelman Trust Barometer. However, trust in the country is slipping as it gears up for the SG50 anniversary celebrations and upcoming general elections. Specifically, Singapore suffered an eight-point drop in trust levels among citizens and slipped to the fifth spot among 27 countries, down from third in 2014. With double-digit drops for the first time in the media and business categories, Singapore’s Trust Index is now lower than those of regional neighbors India, Indonesia, and China. All four institutions measured – media, government, business and non-government organizations (NGOs) – suffered a loss of confidence in Singapore, continuing a trend seen since 2013. The erosion in Singapore’s trust in business was one of the largest among the 27 countries, with a ten-point fall to 61 percent. After one year of maintaining its 70 percent average, Singapore’s trust in media fell the most of the four institutions, decreasing by 11 points to 59 percent. Regarding government, trust dipped by five points to 70 percent, although it still enjoys one of the highest percentages in the world. Singapore’s trust in NGOs fell five points to 71 percent in this year’s edition despite the slight increase seen in the 2014 survey. Amid debate about social and economic issues shaping the country’s future, Singaporeans are clearly concerned about the pace of development and change in business and industry. In Singapore, 73 percent felt the pace is too fast – a big difference from the global average of 51 percent. This is an important marker for policymakers and companies in a small country that is championing innovation, a knowledge economy, and productivity as ways to stay competitive. As we analyze each institution against the backdrop of external factors and realities that may create skepticism, there are some clear considerations for 2015:
1. Trust in media: Search and social media engagement must be front and center for a brand’s channel strategy With a two-point rise to 70 percent, online search engines are now the most trusted source for general information, breaking news, and the confirmation and validation of news in Singapore. That contrasts with sharp declines in trust in traditional media (down 13 points to 66 percent) and hybrid media (down 14 points to 54 percent). Traditional media was dethroned after three years as the most trusted media type. Considering the featured sex scandals, alleged plagiarism, and misreporting of Ebola stories at major newspapers The Straits Times and The New Paper, this dip may not be surprising. These factors may also explain the slight uptick in trust in social media because many such voices were first heard online via Facebook and Twitter. For example, outrage over insensitive and inaccurate articles by hybrid media outlet STOMP took the form of a petition signed by more than 23,000 people in less than three weeks. This also shows the increasing criticism of the role of the media by Singaporeans. For the first time this year, the Trust Barometer looked at trust in a variety of people who create content on online sites, such as social media and blogs. At 72 percent, friends and family are the most trusted, and journalists are a more middling 54 percent. Here in Singapore, for example, anonymous citizens set up a Facebook page called SMRT Ltd (Feedback) to highlight recurring breakdowns and other issues in public transport operations. SMRT Ltd (Feedback) has built a strong network of more than 200,000 fans and continues to grow. Well-known online personalities and celebrities were both ranked as distrusted. Again, this is not surprising, because of the high-profile trial of senior officials at City Harvest
Amid debate about social and economic issues shaping the country’s future, Singaporeans are clearly concerned about the pace of development and change in business and industry.
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Church, who were accused of misappropriating millions of dollars in church funds to support the singing career of celebrity Sun Ho.
2. Trust in business: Businesses cannot focus only on the bottom line and must also think about social purpose and contribution For the first time, this year, we asked what drove the increase or decrease in trust in business. In Singapore, 59 percent selected the “failure to contribute to the greater good” as the key reason trust in business fell. A resounding 80 percent agreed that a company can take specific actions that both increase profits and improve the economic and social conditions in the community in which it operates. All enterprise types – state-owned, big business, and family-owned enterprises – suffered an erosion in trust. Family-owned enterprises dropped by a huge 20 points to 48 percent, significantly lower than the global average of 68 percent. This mirrors how family-owned enterprises view their own outlook. A 2014 PwC study on family businesses in Singapore found that only 79 percent of respondents were confident in growth, as compared with 90 percent in 2012. Trust in state-owned companies dropped 14 points to 60 percent, but it is still higher than the global average of 50 percent. In the Governance and Transparency Index 2014, top-ranked firms included many state-owned enterprises: SingTel (#2), SMRT (#10), Neptune Orient (#12), SIA Engineering (#14), and Singapore Airlines (#17). Many government-linked entities in Singapore outperform the market due to a clear business mandate, the internationalization of their businesses, leadership continuity, and the adoption of corporate governance best practices.
packages for older citizens, and SG50 launch celebrations. However, there were also controversies, including protesters seeking more transparency and accountability regarding the Central Provident Fund (CPF) scheme and the National Library Board pulping books deemed inappropriate for their portrayal of alternative family structures. Singapore’s trust in government is still among the highest in the world, but in terms of viewing government officials as credible spokespeople, it is now in the middle of the road at 49 percent – down three points from 2014. As content creators, government officials are trusted by just 49 percent of Singaporeans. As the upcoming election nears, the government must also pay heed to running and often heated debates about the cost of living, immigration levels and foreign workers, career opportunities for Singaporeans, and health concerns over haze from the annual land clearing in Indonesia.
4. Trust in NGOS: Continue to drive more public and private sector collaboration Despite a slight dip, trust in NGOs remained the highest of the four institutions in Singapore for the second year running. This might be attributed to well-received initiatives such as Youth Corps Singapore, a platform that encourages like-minded young people to engage with community services organizations, NGOs, and private and public sector leaders for skills training and mentorship. Also, six major NGOs collaborated to organize StopTraffickingSG in order to raise the issue of victims’ rights in a new Prevention of Human Trafficking Bill. However, more could be done to enhance public perceptions; we saw the credibility of NGO representatives fall four points to 51 percent.
3. Trust in government: Reconsider who your conversation drivers are and their online and offline tone and manner Singapore’s government had a busy year in terms of counteracting the negative with the positive. There were positive reactions to its 2014 budget, pioneer-generation
Amanda Goh
Managing Director, Edelman Singapore amanda.goh@edelman.com
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TRUST IN
ASIA PACIFIC, MIDDLE EAST & AFRICA
2015