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RIO Country Report Mexico 2015

RIO R&I International Country Reports analyse and assess the research and innovation system, main challenges, framework conditions, regional R&I systems, and international co-operation, including with the European Commission's Joint Research Centre (DG JRC).



1. Overview of the R&I system

Mexico is the 15th largest economy in the world, with GDP growth of 2.24% in 2014. It is the tenth biggest oil producer in the world and it has a strong manufacturing sector with important links to the United States. Ranked by the World Bank as an upper middle income country, the average GDP per capita was approximately €8,000 in the 2012-2014 period. In the same period, the government debt as percentage of GDP increased from 29% to 35%, and the unemployment rate was below 5%.

The 2012-2014 period was marked by the coming to power of a new Government at the end of 2012. The new government introduced an important package of reforms and new policies; all of which have impacted on the economic structure of the country. These new measures include reforms in the financial, fiscal, labour, education, energy and telecommunications activities in the country. A new National Development Plan 2013-2018, and a new Special Programme for Science, Technology and Innovation (PECiTI 2014-2018) were also published. These introduced objectives, strategies and action lines to tackle some serious challenges identified in the Science, Technology and Innovation (STI) system. The challenges included correcting the inadequate levels of national and private R&D expenditure, public-private collaboration, the number of full time researchers, the decentralisation of R&I activities, the number of research publications and patents, and commercialisation of research results, and the number of innovative companies. Important amendments were made in this period to the Law of Science and Technology, to improve the management of Intellectual Property Rights, and to open up new avenues for the exploitation and commercialisation of research results.The Science, Technology and Innovation governance structure did not experience important changes, except for the introduction of the Coordinator of STI in the President Office.

2. Public and private funding of R&I and expenditure

The Government increased its R&I budget in the 2012-2014 period, despite the collapse of oil prices, and the volatility of the global financial markets. The Government remained the main funding agent of the R&I system, with the private sector decreasing its participation as a funding and performing agent. Block funding was slightly reduced, from 68% of total funding in 2011, to 66% in 2012 and 65% in 2013, in favour of competitive funding, which increased from 32% in 2011, to 34% in 2012, and 35% in 2013. The reduction of block funding occurred in all ministries, except in Energy, Health and Social Security, and CONACYT. CONACYT received approximately 45% of the total Federal R&D budget, having increased from 43% in 2011 to 45% in 2013. With no fiscal incentives for R&I since 2009, attempts to increase the participation of the private sector in R&I have been implemented through programmes in which the government subsidises a percentage of the private R&I activities. Results in terms of the quality of the publications and Intellectual Property Rights show that the share of international co-publications and co-inventions are above OECD average levels. Although patent submissions remain dominated by non-resident authors, the patents granted rate of residents authors has increased, while that of non-residents has decreased. Since 2013, the Government has been working on the design of a new Public Procurement for Innovation policy, with the first pilot projects to begin in 2016.

3. Framework conditions for R&I

Mexico ranks 38 (of 189 countries) in the World Bank´s Ease of Doing Business Ranking 2016. Thus, it is in the group of the best countries in terms of business regulations for local firms. The country´s scores in the topics of getting credit, and resolving insolvency are good, ahead of China, India, and Brazil, for example. Mexico´s position in the Global Competitiveness Index (GCI) dropped, from 55 in 2012, to 61 in 2013, and rose again to 57 in 2014, despite having achieved the same score (4.3) in the three years. A comparative analysis of 2014 with respect to 2013 shows that there were improvements in the efficiency of financial markets, business sophistication, and in fostering innovation, however, some challenges remain. These include rigidities in the labour market, and a deterioration of the institutional environment, with weak public and private institutions. Corruption is considered by the World Economic Forum to be the most problematic factor for doing business.

According to the Innovation survey, in the 2008-2013 period, there was a lack of collaboration in product innovation, i.e., 70-77% of all companies involved in product innovation, developed the products on their own. The sparse collaboration of companies occurred mainly in private-private activities, i.e., only about 10% of companies collaborated with other companies in product innovation. Technology transfer and the commercialisation of research results has been tackled with the creation of Knowledge Transfer Offices and by some amendments to the Law of Science. However, the development of policies and instruments to support the creation of high-technology start-ups and the progression towards achieving a critical mass of innovative companies remain a challenge.

4. Smart specialisation approaches

In addition to the FOMIX (Mixed Funds) and the FORDECYT (Institutional Fund for Regional Development through the Promotion of Science, Technology and Innovation), which remain the main instruments used to promote the decentralisation of the R&I activities, between 2013 and 2015, European style Smart Specialisation Strategies were also developed in all 32 states and three regions - north, centre-north and south-southeast. These form a part of the country´s effort to accelerate the transition to an advanced knowledge economy based on regional development. Called Agendas de Innovación, the main objective of these strategies is to open a new path towards innovation, drawing on the particular capabilities and productive strengths of each State and region.

The Agendas de Innovación were developed in a coordinated manner in all the 32 States, following the same approach. This was modelled on the European RIS3 methodology, with a common structure and format. All in all, 35 Innovation Agendas were developed and a total of 495 projects identified, covering 18 sectors and 10 action lines, with an estimated investment of €856m, and an important concentration in five sectors: Food Industry, Energy, IT and Electronics, Tourism, and Automotive. Mexico faces important challenges in terms of specialisation, exacerbated by the diversity, complexity, and asymmetries that exist across the country. The Agendas de Innovación have the potential to become public policy instruments to coordinate the interaction of the states with the different levels of support available for innovation, specifically, the programmes of CONACYT, promoting joint investment in sectors and niches of high impact on the economy.

5. Internationalisation of R&I

In the global economy, Mexico is well recognised for its strong manufacturing industry and the production of oil and gas. Although its trade economy is strongly linked to the USA, the Government has started an economic diversification strategy towards the Asian Pacific region. The STI internationalisation strategy follows a similar pattern, consolidating relations with the longstanding partners, i.e., the USA and Europe, and opening new opportunities in the Asian Pacific region. Mexico is one of the four countries in Latin America which has an agreement with the EU for Scientific and Technological Cooperation, the other countries being Argentina, Brazil and Chile. Since 2014, EU-MEX INNOVA cooperation has evolved into a more reciprocal relationship, with co-funding mechanisms designed to work in selected areas of mutual interest. Examples of this are the joint call on Geothermal Energy, which has a total allocation of €20m, with equal contribution from both sides for the work programme 2016-2017; and cooperation through multilateral initiatives on international manufacturing systems, on infectious disease preparedness, and in chronic diseases. Mexico was the first Latin American country to create a new mechanism to support the participation of Mexican researchers’ in H2020. After Mexico was listed as a third country without the right to funding from the EU in 2014, CONACYT designed a new call: the CONACYT Horizon2020 call, to supplement the funding required by Mexican institutions to participate in consortia in Horizon 2020.

6. Conclusions

In 2014, Mexico´s R&D expenditure was at its highest level for the last decade, reaching 0.54% of GDP. Although still low compared to the EU-28 average, it has been growing in the 2012-2014 period. This growth is driven by the Government, which is the main funding and performing agent of the R&I system. The number of postgraduate grants and of researchers in the National System of Researchers has increased, although the number of researchers as a factor of total employment is low. Unlike OECD trends, the proportion of basic research is relatively high and increasing, while the proportion of technological development is low and dropping. At the same time, the commercialisation of research results, the development of technology-based start-ups, and building a critical mass of innovative companies remain serious challenges. The PECiTI 2014-2018 includes measures to address some of Mexico´s main challenges e.g. increasing R&D expenditure, encouraging private participation, promoting regionalisation, strengthening human and infrastructure capacity, and the commercialisation of research results. Given that the PECiTI was only approved in 2014, it is too early to evaluate the success of these measures. However, in the course of this study, some opportunities have been identified: increasing R&I funding from the States could accelerate the decentralisation of R&I; attempting to increase private R&I investment might benefit from a policy mix where competitive programmes, such as the PEI, are complemented with a new model of fiscal incentives for R&I spending; as a top ten attractor of Foreign Direct Investment (FDI) in the world, mostly in manufacturing, Mexico is in a good position to develop R&I related FDI policies; and finally, new opportunities for collaboration with DG JRC include issues related to the development of Science for Policy, regionalisation of R&I activities, as well as more thematically oriented collaboration in areas such as Energy, ICT, Food, and Health.

Geo coverage
Report year
Official publication date
Tuesday, 16 August, 2016
Country Report file
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