Hardika Sharma – 24/025, Rahul Tanwar – 24/008, Sonam Makol – 24/034

INTERNATIONAL BUSINESS

PROJECT REPORT

MEXICO – AN ECONOMY’s STUDY

Table of Content

S.No Topic Page No.

1 Introduction 3

2 Socio-Cultural Environment 4

3 Macro-Economic Environment 9

4 Political-Legal Environment 12

5 Technological Environment 15

6 Ease of Doing Business 18

7 Global Competitiveness Index 24

8 Conclusion 26

9 References 27

MEXICO - INTRODUCTION

They say that Mexico is a country no one ever leaves. Every year, millions of tourists pass through, and Mexicans jovially warn that a part of them will remain behind forever. Most visitors are vacationing North Americans who wind up on the brilliant beaches of Cancun, Acapulco, Mazatlan, and Puerto Vallarta. The beaches, of course, are among the world's best - but those who venture inland are rewarded with the true soul of Mexico, which has always resided firmly in the interior. 

And it is a big soul. The Republic of Mexico is vast, comprising nearly two million square miles of coastline, desert, rain forest, mountains, and fertile plains. From the American borderlands of the wide, agriculturally rich north, the country narrows gently as it sweeps south and east. The two main mountain ranges, the Sierra Madre Occidental and the Sierra Madre Oriental, hug the west and east, finally merging into the volcanically active central highlands and the capital, Mexico City - the most populous city in the world. Further south, the country narrows to only 100 miles, then broadens again before reaching the Guatemalan border. There are two major peninsulas in Mexico that are almost countries themselves. In the west is the poetically barren Baja Peninsula, which seals in the biological riches of the Sea of Cortes; to the east, protruding into the Caribbean like the end of a fish hook, is the Yucatan peninsula, bursting with rain forests, Mayan ruins, and white powder beaches.

The population is about 106 million, and the generosity of the Mexican people is unsurpassed. Knowing a few simple sentences in Spanish will win hearts. 

Mexico has been graced with an unusually temperate climate year-round. The most important thing to remember is that the Mexican summer is also the rainy season, although the rain rarely lasts more than a few hours, and typically arrives in the late afternoon. Extremes are present only in the North and in Baja, both of which have deserts where the temperature leaps above 100F. Mexico City has a year-round temperature in the high 80s, while the coasts usually stay in the mid-90s. Night time temperatures fall somewhat, but rarely break down below a comfortable 60F.

ECONOMY OVERVIEW

Region Latin America & Caribbean

Income Category Upper Middle Income

Population 127,017,224

GNI per capita (US $) 9,710

DB2017 rank 47

DB2016 rank 45*

Change in rank -2

Socio- Cultural Environment

The culture of Mexico has undergone a tremendous transformation over the past few decades and it varies widely throughout the country. Many Mexicans live in cities, but smaller rural communities still play a strong role in defining the country’s collective vibrant community.

Mexico is the 14th largest country in the world, according to the Central Intelligence Agency's World Fact book. According to the CIA, Mexico consists of several ethnic groups. The mestizo (Amerindian-Spanish) group accounts for 60 percent of the population. Amerindian people or predominantly Amerindian people account for 30 percent, while 9 percent of the population is white. These groups create a culture that is unique to Mexico. Here is an overview of Mexican culture.

Languages of Mexico

The overwhelming majority of Mexicans today speak Spanish. According to the CIA, Spanish is spoken by 92.7 percent of the Mexican population. About 6 percent of the population speaks Spanish and indigenous languages, such as Mayan, Nahuatl and other regional languages. Indigenous Mexican words have even become common in other languages, including English. For example, chocolate, coyote, tomato and avocado all originated in Nahuatl.

Religions of Mexico

"Much of Mexican culture revolves around religious values and the church, as well as the concept of family and inclusiveness," said Talia Wagner, a marriage and family herapist in Los Angeles. Around 82 percent of Mexicans identify themselves as Catholic, according to the CIA, although many have incorporated pre-Hispanic Mayan elements as part of their faith. Christian denominations represented include Presbyterians, Jehovah's Witnesses, Seventh-Day Adventists, Mormons, Lutherans, Methodists, Baptists and Anglicans. There are also small communities of Muslims, Jews and Buddhists.

Values of the Mexican People

Mexicans put a high value on hierarchy and structure in business and family matters. Especially outside of cities, families are typically large and Mexicans are very conscious of their responsibilities to immediate family members and extended family such as cousins and even close friends.

Hosting parties at their homes plays a large part of Mexican life and making visitors feel comfortable is a large part of the values and customs of the country.

"Family units are usually large, with traditional gender roles and extensive family involvement from the external members who assist one another in day to day life," Wagner told Live Science. There is a strong connection between family members. "Parents are treated with a high degree of respect, as is the family in general and there may be constant struggle, especially for the growing children between individual wants and needs and those wants and needs of the family," added Wagner.

Mexican food

Mexican culinary norms vary widely based on income level and social class. The diet of working-class Mexicans includes staples such as corn or wheat tortillas, along with beans, rice, tomatoes, chili peppers and chorizo, a type of pork sausage. Empanadas, which are handheld pasty pockets, can contain savory or sweet fillings. Many Mexicans love spicy foods full of heat.

The diets of middle- and upper-income Mexicans are more closely aligned with diets of Americans and Europeans and include a wide variety of food items prepared in wide range of culinary styles.

Mexico is known for its tequila, which is made from agave cactus that is well suited to the climate of central Mexico. Soda is a very popular drink in Mexico, as the country has a well-developed beverage industry.

A mariachi band plays music in Puebla. Marichi music is a tradition that goes back to the 19th century.

Mexican art and literature

Clay pottery, embroidered cotton garments, wool shawls and outer garments with angular designs, colorful baskets and rugs are some of the common items associated with Mexican folk art.

The country is closely associated with the Mariachi style of folk music. Originated in the southern part of the state of Jalisco sometime in the 19th century, it involves a group of musicians — playing violins, guitars, basses, vihuelas (a five-string guitar) and trumpets — and wearing silver-studded charro suits and elaborate hats. "La Cucaracha" is a well-known Mariachi staple.

Two of Mexico's most famous artists are Frida Kahlo and Diego Rivera. Their paintings include vibrant colors and depictions of life in Mexico.

Mexican clothing

Many may not think of Mexico as a place that fosters high fashion, but many fashion designers hail from Mexico, such as Jorge Duque and Julia y Renata. There is also a Mexico Fashion Week. In the cities, fashion in Mexico is influenced by international trends, so the typical urban Mexican dresses similar to people in Europe and the United States.

In more rural areas, a typical woman’s wardrobe includes skirts, sleeveless tunics called huipils, capes known as quechquémitls and shawls called rebozos.

One distinguishing article of traditional men’s clothing is a large blanket cape called a sarape. Boots are also a wardrobe staple.

Some traditional clothing, now typically worn for celebrations and special occasions, include sombreros and the charro suits worn by Mariachi bands.

Holidays and celebrations

The Feast of Our Lady of Guadalupe, which is celebrated on Dec. 12, is a major Mexican holiday celebrating the appearance of the Virgin Mary to an Indian man in the first years of Spanish rule. She is the patron saint of the country.

The Day of the Dead, celebrated on Nov. 2, is a day set aside to remember and honor those who have died, according to the University of New Mexico. Carnival is also celebrated in many communities throughout Mexico to mark the period before Lent.

Independence Day, marking the country’s separation from Spain in 1810, is celebrated on Sept. 16. Cinco de Mayo, which marks a Mexican military victory over the French in 1862, is more widely celebrated in the United States (as a beer promotion) than it is in Mexico.

Human Development Index (HDI)The HDI is a summary measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living. A long and healthy life is measured by life expectancy. Knowledge level is measured by mean years of education among the adult population, which is the average number of years of education received in a life-time by people aged 25 years and older; and access to learning and knowledge by expected years of schooling for children of school-entry age, which is the total number of years of schooling a child of school-entry age can expect to receive if prevailing patterns of age-specific enrollment rates stay the same throughout the child's life. Standard of living is measured by Gross National Income (GNI) per capita expressed in constant 2011 international dollars converted using purchasing power parity (PPP) rates.

Mexico’s HDI value and rank

Mexico’s HDI value for 2014 is 0.756— which put the country in the high human development category—positioning it at 74 out of 188 countries and territories. Between 1980 and 2014, Mexico’s HDI value increased from 0.601 to 0.756, an increase of 25.8 percent or an average annual increase of about 0.68 percent.Table A reviews Mexico’s progress in each of the HDI indicator. Between 1980 and 2014, Mexico’s life expectancy at birth increased by 10.2 years, mean years of schooling

increased by 4.5years and expected years of schooling increased by 2.9 years. Mexico’s GNI per capita increased by about 29.7percent between 1980 and 2014.

Happiness Index

Mexico has been ranked No. 2 in the world by the index, described by its creator as a measurement of sustainable well-being.

It was well-being, along with life expectancy, where Mexico scored high. Data gathered by the research firm Gallup measured how satisfied citizens felt with life overall, on a

scale of one to 10, and gave Mexico 7.3 for well-being, 11th out of 140 countries.

Life expectancy of 76.4 years put Mexico in 39th place in that category.

Another factor was “inequality of outcomes,” which takes into account inequality within a country in terms of how long people live and how happy they feel based on the distribution of life expectancy and well-being data.

MACRO ECONOMIC ENVIRONMENT

Historic Perspective

Mexico's economic history has been characterized since the colonial era by resource extraction, agriculture, and a relatively underdeveloped industrial sector. Economic elites in the colonial period were predominantly Spanish born, active as transatlantic merchants and silver mine owners and diversifying their investments with the landed estates. The largest sector of the population was indigenous subsistence farmers, who lived mainly in the centre and south.

Independence in Mexico in 1821 was economically difficult for the country, with Spanish merchants returning to Spain and many of the most productive silver mines not only damaged from the insurgency, but also the loss of its supply of mercury from Spain.

A persistent trend of increasing debt-to-GDP for almost a decade now (from 29 percent in 2007 to an estimated 50.5 percent by the end of 2016) in combination with falling oil revenue, a fragile financial situation of the National Oil Company PEMEX as well as disappointing economic growth led rating agencies to put Mexico’s sovereign (investment grade) rating on a negative outlook.

MACRO ECONOMIC PARAMETERS

Mexico is among the world's 20 largest economies and is the second largest economy in Latin America. In 2014, its economy—which is highly dependent on the health of the U.S. economy—grew by 2.4%. Contrary to the more optimistic forecasts, growth maintained a similar pace in 2015 (2.3%). The IMF forecasts a 2.6% growth rate for 2016, with poverty and the country's large informal sector remaining key obstacles to greater economic development. Since 2012, the Mexican Peso has fallen against the U.S. Dollar, Chinese Yuan and the British Pound. The economy has benefited from a booming automobile industry and, in 2014, Mexico became the largest car producer on the subcontinent. Remittances from Mexicans living in the U.S., which represent the country’s second largest source of foreign currency, grew steadily in both 2014 and 2015. While FDI had declined in 2014, it rebounded strongly in 2015. 

In 2015, unemployment dropped to 4.3%; however, the informal sector still employs 59% of the workforce. There are high inequalities both in terms of income and exposure to natural disasters. More than 46% of the population lives in poverty.

Main Indicators 2013 2014 2015 2016 2017 (e)

GDP (billions USD) 1,261.98 1,298.18 1,143.80 1,063.61e 1,124.32

GDP (Constant Prices, Annual % Change)

1.4 2.2 2.5 2.1e 2.3

GDP per Capita (USD)

10,659e 10,844e 9,452e 8,699e 9,102

General Government Balance (in % of GDP)

-4.4 -4.9 -4.7 -4.2e 2.6

Inflation Rate (%) 3.8 4.0 2.7 2.8e 3.3

Main Indicators 2013 2014 2015 2016 2017 (e)

Unemployment Rate (% of the Labour Force)

4.9 4.8 4.4 4.1 3.9

Current Account (in % of GDP)

2.5 -2.0 2.9 -2.7e

ECONOMIC FREEDOM INDEX

Prudent fiscal and monetary policies have enhanced Mexico’s macroeconomic performance.

The pace of change has accelerated in recent years as previously unthinkable structural

reforms have been adopted in parts of the economy that include the energy and

telecommunications sectors. The regulation of commercial operations has become more

streamlined, and business formation is relatively easy.

However, lingering constraints on achieving even more dynamic economic expansion are

numerous, including the lack of competition in the domestic market, labor market rigidity,

institutional shortcomings within the judicial system, and limited progress in curbing high

levels of crime. Corruption is a continuing problem.

POLITICAL AND LEGAL ENVIRONMENT

HISTORICAL DEVELOPMENT.

In reaction to the regime of Porfirio Díaz, the Mexican Constitution of 1917 reserved control of land ownership and the exclusive rights to petroleum and other minerals to the Mexican federal government. Thus, throughout most of the 20th century, Mexico has been functioning under a constitution that severely restricts foreign investment. Restrictions have been loosened in the 1990s, however, in preparation for and as a part of NAFTA.

In 1973 the Law to Promote Mexican Investment and Regulate Foreign Investment (also known as the Foreign Investment Law) was passed. It mandated that Mexican enterprises could have a maximum of 49 percent foreign ownership. Thus, the rule became known as the "51-49 percent rule." In 1984 the law was changed to allow majority foreign ownership of Mexican corporations in certain industrial and tourism-related industries. Such investment, however, was slow and cumbersome and was permitted only with the approval, on a case-by-case basis, of the Mexican Foreign Investment Commission (FIC).

Moving into the 21st century, the FIC continues to oversee and regulate foreign investment in Mexico, but restrictions on investment have been eased considerably. Under new regulations established in 1989, with the exception of specified industries, foreign investment in Mexico in amounts less than US$100 million could proceed without prior approval from the FIC, and those limits are being raised gradually.

THE MEXICAN POLITICAL AND LEGAL SYSTEMS

Mexico has a federal system of government with a national government and 31 states. Mexico's national government, however, is far more powerful than those of the United States and Canada.

Mexico's president plays an extremely important role in its legal system. Nearly all federal laws in Mexico are initiated by the president, and his powers (there has been no woman president in Mexico) are such that most laws he proposes are passed with little or no alteration. Further, the president, as the leader of the powerful PRI (the political party of every Mexican president elected since 1928), plays a strong role with respect to policy and enactment of law in the various Mexican states. (PRI stands for the Partied Revolutionaries Institutional, or Revolutionary, Institutional Party.)

The structure of Mexico's court system is similar to that in the United States. In each state there are trial and appellate courts. The federal level includes trial courts, circuit courts of appeal, and a Supreme Court. The Supreme Court is divided into four "chambers" with five justices each. Each chamber handles one of four areas of law: criminal, administrative, civil, or labor. It is important to note, however, that the role of the courts in a civil law system such as Mexico's differs from the role of courts in a common law system. In a civil law system, attorneys and judges look to sets of codes in which statutes are set down as their primary source of law. In contrast, in a common law system, attorneys and judge rely on statutes and rules of law and their interpretation as they are set down in prior-written court opinions.

Legal Framework of Business in Mexico

Equity of Judgments

The Political Constitution of Mexico is the basis of the Mexican legal system. The judicial system is a combination of constitutional theories and American civil rights, as well as judicial revisions of different legislative statutes. Mexico accepts compulsory jurisdiction from the International Court of Justice, but with limitations.

The Jurisdictions

Supreme Court of Justice

It is the maximum constitutional court and head of the Federal Judicial Power. It protects the order established by the Mexican Constitution, keeps the balance between other powers and government domains

through its court rulings.

Electoral Court It is the maximum authority jurisdictional specialized in controlling and solving disagreements on the federal elections, as well as actions and

resolutions that can violate political and electoral rights of the citizens.

Circuit Collegiate Courts

It is in charge of providing direct protection against conclusive judgments or against resolutions. It is the appeal court for judgments already pronounced either by the district judges or the responsible of

the superior court, as well as extradition orders dictated by the President of the Republic as a response to a petition from a foreign

government.

Circuit Unitary Courts

It performs judgments of protection promoted against deeds from other circuit unitary courts. It is the appeal court for issues heard on first instance and district courts; it is the resource for a denied appeal. It

qualifies impediments, excuses and rejections from district judges; etc.

District Courts They are in charge of crimes of federal order, procedures of extradition, authorizations to interfere in private communications, and

controversies between the application of federal law in administration, civil or labor subjects. Also indirectly involved in resolving crime,

administrative, civil and labor issues.

Federal Judiciary Council

Manages, supervises and disciplines the judicial course of the Judicial Power of the Federation with the exception of the Supreme Court and

the Electoral Court.  It determines the division and competence of territories and specialization - by subject - of the Circuit Collegiate,

Circuit Unitary Courts and District Courts.

Technological Environment

During the last decade Mexico has moved progressively to develop and naturalize its scientific and technological capabilities, a decision requiring long-term government investment in education and research. The areas in which Mexico's National Council of Science and Technology selected to focus a national development program include the following: scholarships for middle- as well as high-level researchers and technicians; indicative programs to support research and basic or new industries in fields such as energy, electronics, metalworking, and agronomy; a government-industry shared risk program; research centers, many located in the provinces; and international scientific agreements. The translation of scientific classics and contemporary publications into Spanish and their widespread dissemination in Mexico have received special attention as has the dissemination of Mexico's work worldwide.

Innovations in science and technology act as engines for long-term development, and they are essential ingredients for the progress of any nation.

• The LANGEBIO Center has developed technology that helps increase food production. With this technology, the seed of different products will improve to make them more resistant to drought, frost, pests and diseases.

• The Large Millimeter Telescope is the world’s largest and most sensitive single-aperture telescope in its frequency range and has contributed to the development of the nearby population.

• The partnership between the Missouri Plant Science Center and Reliv is a rare opportunity for some of the nation’s leading biotech researchers to develop innovative plant-based ingredients. This is a sure way for Mexico to up its economy.

Mexico searches for opportunities to encourage the youth of the nation to observe scientific research as a fertile field of opportunity which can benefit Mexican society. Certain forecasts estimate that Mexico’s IT spending is forecast to grow at a compounded annual growth rate of 11 per cent over 2011-2015.

Historic Perspective

Science and technology have a long history in Mexico. Ancient Mexican civilizations developed mathematics, astronomy, and calendrics, and solved technological problems of water management for agriculture and flood control in Central Mexico. Following the Spanish conquest in 1521, New Spain (colonial Mexico) was brought into the European sphere of science and technology. The Royal and Pontifical University of Mexico, established in 1551, was a hub of intellectual and religious development in colonial Mexico for over a century. During the Spanish American Enlightenment in Mexico, the colony made considerable progress in science, but following the war of independence and political instability in the early nineteenth century, progress stalled. During late 19th century under the regime of Porfirio Díaz, the process of industrialization began in Mexico. Following the Mexican Revolution, a ten-year civil war, Mexico made significant progress in science and technology. During the 20th century, new universities, such as the National Polytecnical Institute Monterrey Institute of Technology and research institutes, such as those at the National Autonomous University of Mexico were established in Mexico.

According to the World Bank, Mexico is Latin America's largest exporter of high-technology goods (High-technology exports are manufactured goods that involve high

R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery) with $40.7 billion worth of high-technology goods exports in 2012. Mexican high-technology exports accounted for 17% of all manufactured goods in the country in 2012 according to the World Bank.

Innovation Index

The Global Innovation Index (GII) is an annual ranking of countries by their capacity for, and success in, innovation. It is published by Cornell University, INSEAD, and the World Intellectual Property Organization in partnership with other organizations and institutions, and is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic ForumMexico is positioned in the 57th place in the Global Innovation Index 2015, made by the University of Cornell, which means ranking nine places above compared to last year when the country ranked the 66th position. The Global Innovation Index is developed by the University of Cornell; the INSEAD business school and the World Intellectual Property Organization (WIPO). The study examines the effective innovation policies for the development that expose new methods that can be applied to encourage innovation and promote growth.

This very complicated index is based on six pillars (Institutions, human and capital research, infrastructure, market sophistication, business sophistication, knowledge and technological outputs and creative outputs.), each with sub-pillars, and a total of 84 indicators. Of the 134 countries analyzed in 2012, Mexico ranked 79th, way behind Chile (39th) also lagging behind Brazil (59th) and Argentina (70th), but way ahead of Venezuela (118th). This complex index’s rankings are different from but generally align with the two other indices: Finland (4th), Singapore (3rd), USA (10th), Switzerland (1st), Canada (12th), Russia (51st), Israel (17th), China (34th) and Indonesia (100th).

DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING

Doing Business presents results for two aggregate measures: the distance to frontier score and the ease of doing business ranking, which is based on the distance to frontier score. The ease of doing business ranking compares economies with one another; the distance to frontier score benchmarks economies with respect to regulatory best practice, showing the absolute distance to the best performance on each Doing Business indicator. When compared across years, the distance to frontier score shows how much the regulatory environment for local entrepreneurs in an economy has changed over time in absolute terms, while the ease of doing business ranking can show only how much the regulatory environment has changed relative to that in other economies.

Ease of Doing Business ranking

The ease of doing business ranking ranges from 1 to 190. The ranking of economies is determined by sorting the aggregate distance to frontier scores, rounded to 2 decimals.

Economy City Weight

Doing Business 2016 uses a simple method to calculate which economies improved the ease of doing business the most. First, it selects the economies that in 2014/15 implemented regulatory reforms making it easier to do business in 3 or more of the 10 topics included in this year’s aggregate distance to frontier score. Changes making it more difficult to do business are subtracted from the total number of those making it easier to do business. Twenty-four economies meet this criterion: Armenia; Azerbaijan; Benin; Costa Rica; Côte d’Ivoire; Cyprus; Hong Kong SAR, China; Indonesia; Jamaica; Kazakhstan; Kenya; Lithuania; Madagascar; Mauritania; Morocco; Romania; the Russian Federation; Rwanda; Senegal; Togo; Uganda; the United Arab Emirates; Uzbekistan; and Vietnam. Second, Doing Business sorts these economies on the increase in their distance to frontier score from the previous year using comparable data.

Selecting the economies that implemented regulatory reforms in at least three topics and had the biggest improvements in their distance to frontier scores is intended to highlight economies with ongoing, broad-based reform programs. The improvement in the distance to frontier score is used to identify the top improvers because this allows a focus on the absolute improvement—in contrast with the relative improvement shown by a change in rankings—that economies have made in their regulatory environment for business.

Global Competitiveness Index

Situation and competitiveness challenges for the Mexican economy

The Mexican economy has a long way to go if it is to improve its competitiveness worldwide.

The Mexican economy’s competiveness, measured by the World Economic Forum’s GCI came 55th out of 148 countries in the world in 2013.

In the region, Mexico is better positioned in the competitiveness indexes than other countries in Latin America; in fact it beats the nations in the BRICS group: (Brazil, Russia, India, China and South Africa).

Mexico faces major challenges if it is to improve its competitiveness internationally and, as a consequence of that, increase its development and economic growth. The recently passed structural reforms smooth the way to reaching this goal.

The BCG Global Manufacturing Cost-Competitiveness Index measures changes in direct manufacturing costs from 2004 to 2014 among the world’s top 25 exporting economies. The index develops competitiveness scores based on manufacturing wages, productivity, energy costs, and currency exchange rates compared with the U.S. dollar.The U.S. serves as the benchmark for both 2004 and 2014, with a score of 100. If a country has a score of 110, for example, that means its direct manufacturing costs are 10 percent higher than those of the U.S. This interactive allows you to see how the manufacturing cost structure of each economy in the index has changed relative to those of the other 24 over the last ten years.

Begin by clicking the tab for either 2004 or 2014. Then select the economy you wish to study on the drop-down list. If you select Germany 2004, for example, you will see

Germany’s costs compared with the others in the index that year. You will also see some of the main components of those costs—wages adjusted for productivity, natural gas, and electricity. Switch to 2014, and you will see how Germany’s cost position has changed.

Some economies long considered low cost—including Brazil, China, Poland, and Russia—have seen their competitiveness erode significantly over the past decade.

Some countries that already had high costs, such as Australia, Belgium, and France, have seen costs rise even more.

India , Indonesia, the Netherlands, and the UK have held their cost competitiveness relatively steady since 2004 compared with the U.S. and have emerged as low-cost manufacturing economies in their regions.

Mexico  and the U.S. have improved their competitiveness against all other economies in the index. We call these two nations the “rising global stars” of manufacturing.

Conclusion

HDI, Innovation Index, and Happiness Index - These three indices appear to tell us that Mexico is relatively weak when it comes to innovativeness. Mexico, along with Brazil and India, appears to lag behind other major emerging economies such as China, Russia, South Africa and Thailand. This is a bit surprising considering that Mexico is a world leader in the export of smart phones, flat panel TVs, automobiles and appliances. Apparently these exports are manufactured in Mexico but the innovations that go into their designs mostly come from elsewhere.

Though Mexico is graduating thousands of engineers and science majors, these are either not yet innovating or are finding employment in other countries. If Mexico is to compete in future world trade, it would do well to take steps now to improve its innovativeness.

With this outlook it is essential to strengthen and improve various areas of opportunity in the Mexican economy. It is important to increase competitiveness, raise productivity, reduce informality, cut insecurity, improve the labor market, implement good quality education, encourage innovation, research and scientific and technological development and protect the environment. Only then will Mexico become more competitive and achieve a greater level of development as well as sustained, and sustainable, growth.

References:

http://www.geographia.com/mexico/

http://reports.weforum.org/global-competitiveness-report-2015-2016/economies/

http://www.doingbusiness.org/rankings

http://www.tradingeconomics.com/mexico/competitiveness-index