Mexico and the Global Innovation Index (Part 2)

In my previous article, I presented the global rankings of the 14th Edition of the Global Innovation Index (GII). Switzerland, Sweden, the US, and the United Kingdom lead the world rankings, while Chile, Mexico, Costa Rica, and Brazil lead the Latin American rankings. The article briefly showed the individual results of the seven pillars the GII assesses, highlighting that Mexico ranked highest in Creative outputs, Knowledge and technology outputs, and Market sophistication; whereas, it ranked lowest in Institutions and infrastructure. This piece provides a brief analysis and commentary on the subpillars that compose the Global Innovation Index.

The subpillars break down the core pillars into specific subcategories related to the major topic of interest. These subpillars are rated and ranked in the same way as the core pillars; however, data are displayed in currency amounts ($), populations, per capita data, or percentages. Moreover, raters from WIPO determine which of these subpillars are “strengths” and “weaknesses” for each country.

Table 1 summarizes Mexico’s strengths in selected subpillars, while Table 2 shows Mexico’s weaknesses in selected subpillars. The first table starts with the greatest performance in the ranking and registers the number of positive incidents per year marked in the annual reports.

It is relevant to highlight that, in terms of strengths, Mexico ranks first globally in exports of creative goods as a percentage of total trade, a position the country has held for the last three years; however, in previous years it also ranked in the top places.

Another major strength is in High-tech (exports and imports) as a percentage of total trade. Mexico ranks eighth in the first component and ninth in the second, showing consistency in the last annual reports. Mexico also ranks in the Top 10 in Ease of getting credit. The remaining strength components focus mainly on market sophistication, including trade, competition and market scales.

During 2021, E-participation and Government’s online service ceased to be strengths for the country; however, the reason was not a decrease in performance (score) but, rather, an increase in the scores of several other countries.

It is worth highlighting that two new strengths emerged during this year: (i) Production and export complexity and (ii) QS university ranking. These categories are not among the top places in the global ranking, but they have managed to advance positions in the ranking.

Table 02 is organized starting on the lowest performance and reports the number of incidents per year marked in the annual reports.

Major weaknesses are found in those components that do not even show a score (and rank) including Cultural & creative services exports; ICT services exports; Intellectual property payments; Printing & other media; and Venture capital deals.

Other sectors (pillars) in which the country needs to heavily improve are ICT services; Investment; Political and operational stability; and Labor productivity growth. A relevant example is the foreign-funded GERD in which Mexico has underperformed for several years. This situation is similar in the Investment subpillar. Having a low level in both subpillars shows a lack of confidence within and outside the country for investment in technological projects and in projects in general.

In 2021, new weaknesses emerged for the country. The first is Labor productivity growth. This sector is very important for the country as many industries, which are labor-intensive, are fundamental foundations for the national economy. That this subpillar shows negative growth is a red light. Venture capital investors is also a key weakness as this activity should be an essential component to strengthen the overall economy and foster innovation.

It is important to analyze Mexico’s global ranking within the Global Innovation Index, as well as within its pillars and subpillars, in order to determine the actions that public and private organizations must take to increase innovation and competitiveness within the country and abroad. Tackling these drawbacks requires national consensus. It is very likely to find public policies regarding science and technology pushed by CONACYT that do not integrate all the actors present in the ecosystem and, as a result, do not rest on a national innovation strategy. It is also common to identify a significant number of isolated or poorly articulated actions among other key actors. A broad effort of communication, coordination, and collaboration is required to develop high-impact actions through innovation in which government, academia, industry, and society can work together to take advantage of the existing capacities and experience found in Mexico.