The survey found that Britain projects more positive influence around the world than any other nation.
For the first time, Britain has beaten the US to the top spot in an annual survey of global soft power.
Coined by a Harvard academic in 1990, the term describes how countries use attraction and persuasion, rather than coercion or payment, to change behaviour.
Monocle magazine's annual "Global Soft Power" survey, ranks nations according to their standard of government; diplomatic infrastructure; cultural output; capacity for education; and appeal to business.
The top five spots went to Britain, the US, Germany, France and Sweden. The list is calculated using a matrix of 50 factors that indicate the use of soft power, the 'Independent' reported.
Some are empirical - such as the number of cultural missions, Olympic medals and foreign students a country can claim; others are more subjective - with countries ranked for the quality of their cuisine, architecture and business brands, the report said.
"We're in a time, right now, where, more than ever, it's not particularly fashionable to go out and write massive cheques to get your way in the world," Tyler Brule, Monocle's editor-in-chief, said.
"With the Olympics taking place here, which got far more fanfare internationally than domestically, and with America very focused on elections, I think the result is probably right. The UK has had a very international presence this year and it has been the best of the British.
"I think America vastly undervalues the importance of soft power. It has a tendency to focus on the tangible and the concrete," Xenia Dormandy, a senior fellow and US expert at Chatham House, was quoted by the paper as saying.
According to the report, the Olympics brought global attention to the UK, with Team GB winning 65 medals. Bradley Wiggins conquered the Tour de France and Andy Murray took his first Grand Slam title in New York.
James Bond was everywhere, appearing with the Queen in the Olympics opening ceremony, then in cinemas, with the global franchise's biggest ever release, Skyfall.
Around 29 million visit the UK a year, while just 62 million visit the US, the report said.