State of Mexico to Cut Science, Innovation Budget by 32% in 2026

The government of the State of Mexico will reduce the budget for science, technology, and innovation by 32.3% for the 2026 fiscal year. This MX$376 million (US$20.9 million) contraction terminates two consecutive years of growth and places funding below 2023 levels.

The shift in public spending represents a transition from expansion to technical austerity. According to the Expenditure Law approved by the state government, the capital assigned will decrease from MX$1.16 billion (US$64.5 million) in 2025 to MX$787.99 million (US$43.8 million) in 2026. Regarding this fiscal adjustment, the research performed by the local legislature indicates that the adjustment “not only reverses the increase observed in 2024 and 2025, but it also places the budget for science and innovation below the level exercised in 2023." This scenario creates a significant challenge for the continuity of long-term research projects that require financial certainty.

Between 2023 and 2025, sector spending showed an upward trend, reaching its peak in 2025. However, the planned reduction for 2026 represents a cumulative decrease of 21% compared to the start of the current administration. This budgetary decision affects strategic areas prioritized to strengthen regional competitiveness. The relevance of this data lies in the decapitalization of scientific infrastructure at a time when the relocation of companies — known as nearshoring — demands higher local technological capabilities. 

The technical breakdown of the reduction reveals that scientific research will face a 23.3% cut, descending to MX$584.6 million (US$32.5 million). Nevertheless, the most drastic adjustment will hit the scientific and technological services department, which includes technological change for the agricultural sector. This segment, which was allocated MX$175.4 million (US$9.7 million) in 2025, has been eliminated from the 2026 state budget.

Scientific innovation will also experience a contraction of 17.7%, adjusting to MX$112.9 million (US$6.2 million). As the only exception to this downward trend, applied technological development projects a marginal growth from MX$80.9 million (US$4.5 million) in 2023 to MX$90.4 million (US$5.03 million) in 2026. Despite this focused increase, the general balance indicates a setback in the capacity of the state for knowledge transfer.

This reduction in capital is expected to directly impact the link between academia and industry. Furthermore, it may limit the modernization of the agricultural vocation of the state by restricting the adoption of new technological tools in the short and medium term.

“To achieve sustainable growth and economic competitiveness, Mexico must prioritize budgetary programs that facilitate technological development, education, and the transfer of knowledge across industries. Such initiatives can promote long-term confidence in economic growth and enable the country to compete in an increasingly innovation-driven global economy,” says Dani Rodrik, Ford Foundation Professor of International Political Economy, in the Rebirth of Industrial Policy and an Agenda for the Twenty-First Century report.