National Policies for Innovation and Growth in Mexico

In 2003, Mexico had the 10th-largest economy in the world; in 2004, it fell to 11th place; and in 2005, it dropped to 12th. This trend is troublesome and suggests that Mexico is not taking the steps needed to meet the new level of competition in an intense and changing global market. The export-led development model that worked for Mexico in the past is increasingly less effective. Mexico’s future economic development will increasingly depend on the effective creation and use of knowledge. Mexico must build its own science and technology assets, and it can also benefit from strengthening the scientific and technological interfaces it has with its neighbors in North America and other regions. To do this, national policies for economic growth and development will need to adjust to the new global economy. Government needs to pay greater attention to the ability of the economy to innovate. Appropriate national policies can help Mexico adjust to these global economic changes, accelerate innovation, and as a result, increase wealth and economic growth.

Mexico has begun to take steps to put these kinds of new policies in place, and it is building the foundations for a strong base in science, engineering, and technology. But the analysis presented here shows that Mexico's innovative and technological capabilities need to be expanded and accelerated through both national efforts and international cooperation. Mexico needs to harness its resources more effectively to promote technological innovation. This report discusses the elements of an innovative economy, reviews successful programs in other nations to encourage innovation, and describes existing national initiatives already under way in Mexico. The report concludes with several recommendations and options for Mexican policy, both nationally and within the larger North American context.

James A. Lewis is senior fellow and director of the CSIS Technology and Public Policy Program. A former member of the U.S. Foreign Service and the Senior Executive Service, he worked on foreign policy, national security, and technology-related issues at the Departments of State and Commerce. Since coming to CSIS, he has authored numerous publications, including Waiting for Sputnik (2006), Globalization and National Security (2004), and Spectrum Management for the 21st Century (2003).