As the UK Government’s Integrated Review nears its conclusion, Insight explores how soft power can play a deciding role in the UK’s international smart power strategy.

A state’s international credibility and capacity to effect change depends as much on diplomacy and the social and human capital of international networks as it does on its gross domestic product (GDP), or military might.

The ‘smart power’ resulting from the interaction between these elements should be greater than the sum of the parts. 

Whether it’s persuading other countries to take multilateral action in a humanitarian crisis, agreeing to collective targets for reducing carbon emissions, signing a trade deal or deterring rivals from hostile acts, soft power is strategically integral to success.

The UK’s international capability depends on being perceived as a force for good in the world – a credible, reliable and generous partner focused on the common good rather than narrow self-interest. 

To its credit the UK Government’s Integrated Review of Security, Defence, Development and Foreign Policy (Integrated Review) takes a holistic approach.

It looks at all of the UK’s international capabilities with a view to developing a full spectrum strategy to deliver the Prime Minister’s vision for Global Britain. The British Council’s formal response to the Integrated Review can be read here.

But grand visions and strategies can only be realised when backed by investment. This is why the outcome of the UK Government’s Spending Review, which is being delivered alongside the Integrated Review, will be critical.

Together these two reviews represent a once-in-a-generation opportunity to make a renewed commitment to the UK’s international capabilities. Yet herein lies the challenge – the economic impact of COVID-19 means that they are taking place at an extremely difficult time for Her Majesty’s Treasury.

What then for Global Britain? How can the UK realise its vision of a leading power both worthy and capable of holding on to its seat at the top table, when facing  a contraction of the national economy and unprecedented levels of peacetime debt? 

Currently the UK spends about 2.75 per cent of GDP on ‘international engagement’ – including the entire defence, intelligence, diplomacy and the 0.7 per cent for aid budgets. 

Raising this to 3 per cent, as previously argued by the British Foreign Policy Group, would significantly increase resourcing for international engagement, especially if there was a significant uplift in funding for the diplomatic network, the BBC World Service and British Council – which collectively account for less than 0.1 per cent of GDP. 

History tells us that a tight spending round is more likely to produce cuts than increases in international engagement budgets. But investment in the UK’s soft power assets and infrastructure can offer a path out of the economic doldrums of COVID-19.

Diplomacy and soft power are vital to the UK’s economic success. Negotiating an international trade deal or agreeing collective action in fora like the G7 or World Trade Organisation depends on deft diplomacy and the appeal of the UK’s offer. 

Trust and attractiveness increase interest in engaging with the UK through business and trade, drive up foreign direct investment (FDI) and increase inward flows of international students. 

The economic value of trust is evidence based. A one-standard-deviation increase in an importer’s trust toward an exporter raises exports by 10 per cent and the level of FDI by 27 per cent . 

Soft power has multiple positive impacts on the UK’s prosperity. International students for example not only make a vital contribution to local economies across the country but are also core to the success of the UK’s research sector, especially in areas key to UK productivity like the life sciences, engineering and artificial intelligence. 

Global Britain isn’t optional. Investment can’t be postponed to sunnier times. International engagement is vital to increasing FDI, improving productivity and supercharging Research and Development. 

The UK’s reputational resilience and leading position in soft power are vital to the UK’s international influence as it charts a new course in its foreign policy against a backdrop of rapid and major change in the international order. 

Joseph S. Nye recently highlighted the increasing importance of social and human capital in international relations:

In this new world, networks and connectedness become an important source of power and security. In a world of growing complexity, the most connected states are the most powerful.  

In an increasingly complex, contested, multi-polar world, the UK will be reliant on alliances and networks to advance its prosperity and security and address global challenges.

Given its reputation as an open and tolerant society that acts as a global force for good, the UK currently enjoys strong levels of trust and attractiveness internationally.

This creates an opportunity for the UK to build on its international relationships and more actively champion the values it is seen as representing, whether through encouraging rules-based international systems in multilateral institutions or through supporting collective action on issues such as climate change, COVID-19, women’s rights and education, and technology governance.

However, the gap between soft power leaders is narrowing. France, Germany, Russia, Japan, the Republic of Korea and China have been investing more in soft power as a proportion of GDP than the UK and place soft power prominently in their international strategies. 

In 2018/19 the German state invested £550 million in its principal soft power agencies, three times that of the UK (£184 million). France is also now spending well over double what the UK government invests, in the same year state funding for comparable soft power bodies reached £478 million.   

Without an increase in investment the UK’s comparative advantage in soft power will be eroded and could lose ground in attractiveness and trust. 

Complacency in the face of increasing global competition and innovation in the soft power space will cost the UK international influence.

The UK rightly ringfences significant funds for Official Development Assistance (ODA). However, the Royal United Services Institute has estimated that following the merger of the Foreign Office and the Department for International Development around 96 per cent of the FCDO budget is now ODA. 

This is likely to have significant ramifications for UK diplomacy and soft power. For example, perceptions of the UK in Europe have declined sharply in the last two years, but the scope to reverse this downward trend through public diplomacy and cultural relations is limited by restrictions on where and how the FCDO budget can be deployed.

If the UK is to maintain its leading position it will need to ensure that sufficient funds can be directed to activities whose primary purpose is building connections, trust and understanding in all the places of strategic importance regardless of their ODA status.

The Integrated Review provides a once-in-a-generation opportunity to recalibrate the UK’s international capabilities and develop a smart power strategic approach that will be fit for the twenty-first century.

The Spending Review needs to align funding with that strategy and deliver a significant investment in the infrastructure of international engagement, in defence, intelligence, diplomacy and soft power.

Investment is necessary in each and every area that makes up the UK’s international capability. The potential future returns on that investment in terms of the UK’s place in the world, prosperity and international influence are what make the outcome of the Integrated Review and Spending Review so crucial. 

Global Britain isn’t optional  –  in reality it’s the only option.