5 July 2016

2016 Edelman Trust Barometer

Written by: Steve Spurr, Chief Executive Officer at Edelman

Insights, Reputation, Trust

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Navigating the Great Dividing Gap

Diverging trust levels within Australian society is at an all-time high, with low levels of optimism and concerns over income inequality make for a complicated election year. A slowing economy, contracting commodities sector, unaffordable homes and a new prime minister every year – trust in Australia must be at an all-time low, right? Wrong – it is actually at a five-year high.

The Edelman Trust Index is the average trust across the institutions of government, business, media and non-governmental organisations.

Within this index Australia has risen from 52 to 63 percent – shifting Australia from a neutral trusting nation to a trusting nation in the 28 country study amongst the informed public.

So what is driving this increase in trust? The big changes are trust in the institutions of business – up a staggering 17 percentage points – and government – up 11 points. The jump for business is one of the biggest changes in the global study, suggesting that the new Turnbull government and a perceived better business environment have given a significant bump to trust.

This improvement in trust is also mirrored in the general population, with an increase from 42 to 49 percent, however, the rise is smaller and shows a different picture from the Australian population, remaining in the distrusting category. Although trust is increasing amongst the general population, it is much higher and rising faster amongst the informed public. If you further analyse the gap by removing the informed public from the full data set, the Edelman Trust Index of this remaining group – that we have named the mass population – is 47 percent. In Australia, a 16 point difference in trust exists between the informed public and the mass population, while globally the gap is 12 points.

This trust gap has a tangible impact on expectations of our economic prospects over the coming five years. The informed public is 10 percentage points more optimistic than the mass population (41 versus 31 percent) although neither score is a ringing endorsement from the country – Australia is the fourth least optimistic nation in the survey after Japan, France and Germany. If expectations set reality, we are in for a tough time.

This is a significant and troubling gap and it is important that we try to understand what is driving this disparity.

First, this isn’t a brand new trend. In 2012, the Australian gap between the informed public and mass population was 14 percentage points. It is interesting then that Australia, tied with the Netherlands, had the second largest gap globally, after Sweden. Other nations are catching up to an issue that the Australian public was already concerned with back in 2012. Unlike the Netherlands and Sweden, who have managed to reduce their trust gap over the last five years, Australia is still growing at 16 percent and is only smaller than the U.S. and U.K.

Second, Australia bucks global trends on trust differentials driven by income differences. When looking at the richest quartile versus the poorest quartile, the gap in trust is only 7 points, one of the smaller gaps in the study.

Finally, if income does not account for the differential, we need to look at the other demographic differences between the informed public and mass population.  These are 1) active engagement with news media and 2) an interest in current affairs. This would suggest that being an active participant in the information economy and engaged in current affairs drives trust within Australia. Conversely, lack of engagement and interest in the institutions that shape our lives leads to distrust and pessimism.

I have no doubt that part of the trust jump among the informed public is due to the survey taking place a few months after the departure of gaffe-prone Tony Abbott, gifting Malcolm Turnbull a bounce that will soon wear off if action does not quickly follow. The data suggests that the answer lies in bringing more people into the information and ideas economy. Turnbull’s recently unveiled innovation policy could deliver just that, but it has to engage and reach the general population to make a meaningful change in Australian society. Given Australia is in the top-five nations most trusted as a global corporate headquarters, helping business capitalise on brand Australia needs to be both a business and government objective.

With an election looming, Turnbull has to be careful that he has a message for every Australian. The recent large and increasing gaps in the U.K, U.S and France between the informed public and mass population have led to the emergence of populist politics that the informed public often does not understand. Turnbull has to ensure that his campaigning and plan for the economy resonates with everyone if he intends to stay in power.

The five key lessons for business in the Trust Barometer when it comes to the general population are:

  • Leaders need to be authentic and human– sharing values and personal challenges are the two largest drivers in building trust in leaders, rather than relying purely on their credentials for the role.
  • Use the right people to convey the message – a person like yourself is as trusted as an academic, expert or spokesperson on a topic (all at 59 percent or 60 percent) despite having no quantifiable credentials to guide opinion other than that they are relatable to your audience. The next most valuable spokesperson is an employee (55 percent).
  • Focus on your response as a business to address income inequality. Australia is the only country surveyed where addressing income inequality is the most important for business to address beyond their day-to-day business and 77 percent believe it is your duty to improve social and economic conditions in Australia as well as deliver on your business results
  • Communicate how you are helping Australians keep up with the times – Australians believe you have more licence to act in this regard (63 percent) than government (44 percent).
  • Choose a broad media mix and invest in your own media channels – search tops the most trusted media source (55 percent) for the third year running. Social media slips from third to fifth as both online and owned media are now trusted more.

It is imperative that NGOs, government, business and the media unite to ensure we overcome the great dividing trust gap that exists in Australia. If this does not happen, we are likely to derail the country’s transition from a resources-led to an innovation-focused economy.

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