Innovations are emerging from a country that is experiencing important social and political problems.
by Lourdes Casanova, Senior Lecturer of Management and Academic Director of the Emerging Markets Institute and Samantha Rullán, EMI Assistant Director
Governments and business leaders are increasingly aware of the role that innovation plays in economic growth, development and competitiveness. There are imperative challenges for Latin American countries, among them, poverty, social inclusion, sustainable development, climate change, natural disasters, productivity, improve the quality of education and health. Innovations are essential to drive economic growth and prosperity in the region.
Mexico, an upper middle-income country with a population of over 123 million and a GDP (US$ billions) of more than $1,282 has one of the largest economies in the world ranked 15th and is an emerging power. In the last decades, Mexico’s economy has shifted from commodity and agricultural to service and manufacturing. Mexico is one of the most open economies and is currently undergoing major reforms in the telecommunication, energy, fiscal, education and other sectors to drive growth. According to the 2013 Global Entrepreneurship Monitor (GEM) and the Global Competitiveness Index 2014-2015, Mexico is in a transition phase between Efficiency-Driven and Innovation Driven Economy. In the 2015 Global Innovation Index (GII) Mexico ranks in 57th. Most of the research on innovation performance is generally focused on technological innovation. The main variables used, such as patents and number of scientific publications, do not always reflect the other types of innovations (i.e. business model, organizational, etc.) that are developing in emerging markets.
The aim of this paper was to analyze the Mexican innovation system using a broad concept with a focus on other types of innovation including cultural aspects to identify the main characteristics that distinguish and determine how innovation in Mexico is formed. Although the Mexican government has improved its institutional structure for innovation and its support policies, they need to evaluate programs and adjust incentive schemes based on performance to improve their innovation policy.
There are important deficits in the Innovation System of Mexico illustrated by the data presented in the paper. Regarding the public sector, since 2012, there have been policy and governance changes mainly introduced to improve Mexico’s innovation performance. There was a shift in government focus from the maquila model towards policies focused on inclusive innovation. The Mexican government is implementing different support mechanisms; we believe this is a step on right direction but it is still early to evaluate its effectiveness. The private sector is not a relevant actor and its interaction with the universities is weak.
Innovations are emerging from a country that is experiencing important social and political problems. The resilience of Mexican entrepreneurs is evident. In adverse conditions and against all odds they are still innovating. Mexico has been slow in embracing innovation as a tool to improve productivity and competitiveness but has been trying to improve its institutional structure for innovation and its support policies. In 2012, the Mexican government launched an ambitious 25-year Special Program for Science, Technology and Innovation (STI) to achieve economic and social sustainable growth in the country with scientific, technological and innovation development as the main pillars.
More incentives should be introduced to reverse this situation and increase the role of the private sector in the innovation system of Mexico as well as the linkages with the research centers and educational institutions. Higher private investment is needed to enhance innovation in Mexico.
Note: This a summary of the article written by the authors and published in the International Journal of Business and Economic Sciences Applied Research, 8(3), pp.59-68.