Our economy and companies suffer from an equally negative image. Despite 18 years of Thatcherism, Britain is seen as strike-ridden by nearly half of Fortune 500 companies. Under 40 per cent of Japanese companies think Britain encourages free enterprise. The image of our companies lags far behind the rest of Europe, the United States and Japan, scraping barely half the Japanese score on every attribute. The general image of Britain is as a country whose time has come and gone.
But if our image abroad is poor, it simply reflects our own confusion about what being British stands for. The first thing to remember is how we got here. Far from being the product of 1,000 years of unbroken continuity, Britain and Britishness were constructed in the 18th and 19th centuries. A combination of patronage, common threats and consciously invented national institutions and traditions such as parliament, the monarchy and the British Army shaped a powerful and compelling identity.
Today there is a lack of resonance in the idea of Britain as a land of great and stable institutions, the imperial nation, the industrial powerhouse, home of the English language, the Protestant nation, the inventor and dominator of sports. Faith in our own institutions has plummeted. Barely 30 per cent think Britain will have a monarchy in 50 years time. Only 10 per cent have confidence in parliament. The Empire, which barely 50 years ago boasted 800 million people, today includes only 168,000 (excluding the UK population). Only 1 in 20 is proud of our economic achievements. Many companies, such as British Telecom and British Home Stores, are so embarrassed by their Britishness that they have dropped the British from their names. Dixon's own brand MATSUI is meant to sound Japanese. Protestantism is on the wane and we are regularly beaten at the sports we invented.
But coinciding with this trauma has been an explosion of national confidence in the arts, fashion, technology, architecture, design - even our sports are undergoing a revival. A gulf is developing between the reality of Britain in the late 1990s and our image abroad and at home. It is time for Britain to renew its identity.
The key argument is economic. Most of us will pay more for products from some countries than from others. We pay over the odds for consumer electronics from Japan, food products from Italy, engineering from Germany. A survey of 200 of the world's largest companies showed that 72 per cent see national image as important when they make purchasing decisions.
Many people object to the idea of nations having a brand. They claim that national identities are complex and that it would be wrong for anyone to manage them. But nations have been recreating their identities throughout history. Monarchs, emperors, popes and parliaments all used icons, myths and ceremonies to tell the world what they stood for and what made them special.
Recently Ireland has transformed its image from that of a rural, traditional Catholic country to an innovative Celtic tiger. Dublin has been recast as one of Europe's most exciting cities. Spain managed to shed the shadow of Franco and redefine itself as a modern democratic industrial nation using the Espana picture by Miro as a national logo symbolising a bright, optimistic, young country. Today all modern nations manage their identities in similar ways to companies. They use logos, advertising campaigns, festivals, trade fairs and operate networks of offices to promote the national brand.
Last year we spent almost pounds 800m in public money on projecting Britain's identity through the Foreign Office, the Department of Trade and Industry, the British Council, the Invest in Britain Bureau, the British Tourist Authority and the BBC. One can add to this some of the pounds 10bn spent each year by British companies on advertising their products at home and abroad.
But because there is no common, up-to-date story of British identity, these organisations frequently resort to peddling tradition. Government has led the way with ageing diplomatic missions filled with Chippendale furniture, pompous heraldry, titled diplomatic envoys, tourist advertising displays of thatched pubs and classic cars and card-board cut-out Beefeaters at trade fairs.
The key to renewing identity is to define an ethos or story that is unique to the company or country and rooted in reality. Britain needs a story which makes sense of where we have come from, reflects the best of what we are and makes a strong statement about where we are going. Our research found six stories which fit these criteria.
The first is of Britain the global hub: a place where goods, messages and ideas are exchanged, a bridge between Europe and America, North and South, East and West. Britain is the fifth largest trading nation in the world, exporting more per head than the United States and Japan. The turnover of the London currency markets is greater than New York and Tokyo combined. The City of London has a workforce of 800,000, more than the population of Frankfurt. Britain is second only to the US as a destination for international direct investment and as a source of outward investment.
The second story is of Britain the creative island, combining a history of eccentricity with an ethos which values individuality, non-conformity and new ideas. Britain has won 90 Nobel Prizes for science second only to the United States. According to the Japanese Government, Britain is responsible for 70 per cent of the significant inventions and one-fifth of all post-war inventions in the world. A large proportion of the world's computer games are made within a 30 mile radius of Liverpool. British design, fashion and music our strongest export sector with a pounds 1.1bn turnover in 1996, are global pacesetters. Britain is a small island with big ideas.
The third story is of Britain the hybrid nation, mixing diverse elements together into something new. It is not a melting pot moulding disparate identities into a conformist whole but a country which thrives on diversity and uses it constantly to renew and re-energise itself. Britain has over 3 million people who describe themselves as non-white and houses most of the world's religions. Indian restaurants now have a higher turn-over than coal, steel, and shipbuilding combined.
The fourth story is of a nation of buccaneering entrepreneurs. Napoleon's "nation of shop-keepers"comment is more true today than ever before. Britain has more shop workers than either France or Germany. Eight out of the ten of the most profitable European retailers are British. Companies such as the Body Shop lead the world in ethical trading.
The fifth story is of Britain as the silent revolutionary, constantly inventing new forms of organisation and new ways of running society. Britain has led the world in non-violent change, quietly creating new ways of life then re-inventing them.
Britain was first in - and first out - of the industrial revolution. It was the first country to carry out democratic nationalisation and privatisation. British-style constitutions and parliamentary democracy, army, welfare states, universities and a host of modern sports have been invented here and copied throughout the world.
The final story is of a nation of fairplay and support for the underdog. The Welfare State and modern charity are central to the way Britain sees itself and conducts its business. Live Aid, Band Aid and Children in Need have pioneered new forms of fundraising. Half of all adults take part in some form of voluntary activity each year.
Together these stories provide a toolkit for renewing Britain's identity. Just as the identity forged 200 years ago was born out of public debate, today we need the widest possible discussion of what Britishness is. But as well as a common story, we need strong mechanisms to project and manage our identity effectively.
The Prime Minister should chair a Vision Group to agree and oversee the British Brand. A working party should be established with representatives from all the agencies involved in promoting Britain abroad to ensure that consistent messages are used. A Promoting Britain Unit should be set up in the Cabinet Office to track the performance of the British Brand. It should disseminate best practice, commission activities, encourage partnerships and provide support for cities and regions. Agencies projecting Britain to the world should adopt new approaches to recruitment and organisation to become more entrepreneurial, more creative, more representative of Britain's contemporary diversity.
The millennium provides an ideal opportunity to project a new image of Britain to the world. There are many powerful ways to project these new stories - our trade marks for the next century. For example we could make points of entry and exit into Britain express our renewed identity by housing art exhibitions, museums and libraries in airports and stations, so providing visitors with a stunning welcome to the country.
In the future the main ports of entry will be via on-line computers. We should create a Digital Britain web site which includes art and discussion groups alongside detailed listings and tourist information. Our government buildings around the world should be redesigned to act as a showcase for Britain as a creative island, reflecting the best of British design and architecture. We could also review stamps, letterheads and official documents to achieve a better mix between old and new. The Government should issue a challenge to highlight the best educational practices and institutions, the most innovative social entrepreneurs and the best city improvements using the Design Council's Millennium Products campaign as a model.
In Greenwich itself we should build a living museum of the future or Millennium City to act as a showcase for the future of health, learning, retailing and democracy. We could also establish a fairplay web site accessible in all places associated with the millennium to give people immediate access to opportunities for volunteering and mentoring - both at home and abroad.
Renewing Britain's identity is not about shedding the past but finding a better fit between our heritage and our future. Two hundred years ago our ancestors constructed a new identity that proved enormously successful. They pioneered new institutions, new images and new ways of thinking, free from sentimental attachment to the traditions they inherited. Today we need to do the same again.
"Britain: Renewing our identity", by Mark Leonard (pounds 5.95), is published tomorrow by Demos, 9 Bridewell Place, London EC4V 6AP, tel 0171-353 4479. The project was funded by the Design Council.Reuse content