Are Investment Promotion Committees Attracting Value?

The Mexican federal government has reinstated investment agencies for attracting incoming foreign direct investment, only this time dressing them up to match the colors of the "Plan de México" (the central economic protectionist policy with a hint of import substitution) and naming them "Investment Promotion Committees." These are being set up in 32 states around the country as a way of attracting such activity regionally (Mexico Business, 2026).

In the wake of the demise of ProMéxico in the early days of the Lopez Obrador presidency, the Ministry of Economy, together with embassies and each Morenista state government, provided a stop-gap service to facilitate services and incentives for foreign investors. Attempts at starting alternative investment agencies along the lines of ProMéxico have been attempted at the state level by certain opposition local governments as well, with little real success.

This fresh federal initiative is being spearheaded by Minister of the Economy Marcelo Ebrard, with key support from Altagracia Gómez Sierra, coordinator of the Mexican Business Council, and Francisco Cervantes, president of the Business Coordinating Council. This will be personally overseen by President Claudia Sheinbaum herself. According to Altagracia Gómez, the goal is for investment to account for the equivalent of 25% of GDP in 2026.

The good news is that Mexico is already in 13th position worldwide for incoming flows of FDI (World Bank, 2023). By the third quarter of 2025, Mexico had already surpassed total incoming foreign direct investment from 2024 with US$40.9 billion, with new investments of up to US$6.56 billion. Manufacturing (especially automotive) dominates, attracting nearly 50% of foreign direct investment, with the United States, Germany, and Japan as top investors in this sector (Ministry of Economy, 2025). Mexico benefits from its strategic geographic location, being a key member of the USMCA, and from having a stable macroeconomic environment.

Although Mexico is attracting healthy flows of foreign direct investment, it is important to remember that the quality of FDI-generated activity needs to be up to the quantity if the country wants to be a home to cutting-edge economic activity. That is, the investments need to bring sustained higher-order factors, such as research and development, as well as access to advanced technology to foster spillover effects, including training, as well as employing a skilled local workforce. Merely receiving investment for secondary labor-intensive manufacturing or primary industry will not generate much-needed economic development for the nation.

It is worthwhile to put Mexico into context concerning its competitive position as a suitable environment for higher-order investment. Out of 151 economies, Mexico is in 101st position for research and development spending, investing 0.27% of GDP for such activity in 2022 (last of the G20 countries). Some of the top nations for spending on R&D are: Israel (investing 5.56% of GDP in R&D), South Korea (4.93%), the United States (3.46%), and Belgium (3.43%). The principal receivers of foreign direct investment for R&D investment are: the United States, India, China, the European Union, the UK, and Singapore due to their stability, legal structure, and infrastructure (World Bank, 2023).

Mexico is ranked 58th out of 139 countries worldwide on the Global Innovation Index 2025, according to the World Intellectual Property Organization. This takes into account the quality of the country’s institutions, human capital and research, level of infrastructure, market sophistication, business sophistication, knowledge and technology outputs, and creativity outputs (WIPO, 2025).

Mexico can boast certain incoming foreign direct investment projects in research and development. For example, upcoming projects include AstraZeneca, with US$140 million to expand its Global Innovation and Technology Center; Bayer, US$166 million to modernize and expand production and R&D sites; ODATA, US$3 billion to launch a data center campus in Queretaro, delivering up to 300MW of IT capacity for cloud computing, AI workloads, and enterprise services; and Nu, US$2.5 billion over five years to expand banking and fintech services (Mexico Business, 2026). Yet, it remains a fact that much needs to be done to attract more continuous investment in such activity on a par with the world leaders.

To climb up the ladder and become a more welcoming economy for higher-order FDI in innovation and R&D investment, Mexico needs to concentrate its efforts in improving in some key areas. To begin with, preparing a pool of skilled labor is required, by improving a clearly uncompetitive basic education system and training more specialized professionals. More investment in relevant logistics infrastructure for business-related activities with proper maintenance, coupled with more efficient and reliable basic services is needed. The issue of security has been a big setback for business activity in Mexico for decades; companies do not want to risk making investments in ambitious projects that run the risk of extortion, money laundering, supply chain disruption, workplace exploitation, reputational damage, or theft. The legal landscape once again has taken a hit since the Judicial Reform of 2024; after enjoying a period of relative legal dependability, business is now doubting a system which is supposed to sustain labor, intellectual property, contract, and fiscal law.

David Cameron put it very well during his tenure as prime minister of the UK, when he said, “More of the same will just produce more of the same: less competitiveness, less growth, fewer jobs.”  He was referring to the need for economic reforms and changes in policy to enhance the country's economic performance, and he was stressing the importance of climbing up the value-added ladder by creating the right conditions. Although this author is not a fan, it would be good advice for today’s Mexican government, aiming to reach the 25% threshold of investment-to-GDP this year, much of it inclusive, innovative, digital, sustainable, and regional.