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Comprehensive Innovation System for Mexico

Comprehensive Innovation System for Mexico. July 2010. Contents. Motivation The Case of Mexico Comprehensive Innovation System Development Specific results Final remarks. Innovation as a growth engine.

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Comprehensive Innovation System for Mexico

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  1. Comprehensive Innovation System for Mexico July 2010

  2. Contents • Motivation • The Case of Mexico • Comprehensive Innovation System Development • Specific results • Final remarks

  3. Innovation as a growth engine At the international level, a positive link has been observed between innovation and economic growth. In more developed countries, innovation accounts for between two thirds and three quarters of the GDP growth rates observed between 1995 and 2006. Contribution of Innovation to GDP Growth (percentage of contributions 1995-2006) Contribution of innovation: Intangible capital + Multi-factorial productivity Physical capital Labor Greece Italy Austria Spain Germany France Finland Czech Republic Denmark United Kingdom U.S. Sweden Source: OECD

  4. Ecosystem for Innovation • Ensuring a suitable environment for innovation is complex, since: • It requires the participation of various actors, which easily leads to problems of coordination. • The presence of externalities often creates under-investment in socially profitable areas. 4

  5. Successful cases In order to solve coordination problems, successful countries have developed comprehensive strategies to encourage innovation. Source: SE calculations using data from OECD, the World Bank and innovation policy websites in various countries * Average real annual GDP growth in PPP (purchasing power parity) 5

  6. Contents • Motivation • The Case of Mexico • Comprehensive Innovation System Development • Specific results • Final remarks

  7. Development of Comprehensive Innovation System • The Comprehensive Innovation System for Mexico is characterized by: • Being a priority for Federal Public Administration • Focusing efforts on areas with greatest impact • Establishing coordination mechanisms between the various agents involved • Establishing accountability mechanisms including clear, quantifiable goals 7

  8. Development of Comprehensive Innovation System The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 8

  9. Regulatory framework The Law of Science and Technology was reformed in 2009, establishing the basis for a normative institutional framework that encourages innovation. Among other elements, this reform establishes: • Innovation as the guiding principle • The creation of an Inter-Sectoral Committee for Innovation • A legal framework for the Creation of Liaison and Knowledge Transfer Units • An incentive for researchers to be able to benefit from intellectual property royalties

  10. Development of Comprehensive Innovation System The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 10

  11. Knowledge creation The private sector's participation in the financing of research and development activities has increased in recent years. This, together with the availability of top-rate universities and research centers, has led to a significant increase in patent requests by Mexicans in Mexico. Source: IMPI Sources: OECD and CONACYT

  12. Comprehensive Innovation System Development The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 12

  13. Human resources The availability of qualified human capital has increased, strengthening our innovative capacity. * For the United States, only graduates who are citizens and permanent residents are considered. Source: UNESCO, Institute for Statistics.

  14. Comprehensive Innovation System Development The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 14

  15. Demand for Ideas and Solutions • A focalization strategy has been developed to increase the demand for ideas and solutions in areas and sectors with the greatest potential impact, taking advantage of: National challenges and needs I. • Environmental • Energy • Health • Fighting poverty • Security II. Strengths with the potential to compete or be a leader • R&D activities • Vaccinations • Biotechnology • Electronic circuits • … • Automotive • Aerospace • Information technologies • … 15

  16. Focalization criteria: sectors with high competitiveness and high potential impact for Mexico Prioritization by competitiveness and potential impact for Mexico Manufacture of electric and electronic equipment Manufacture of transport equipment Mining Tourism Manufacture of machinery and equipment Food industry Business support service Competitiveness in Mexico vs. other countries Health services Sectors with high competitiveness and high potential impact Source: Análisis BCG Potential Impact for Mexico

  17. Focalization criteria: key sectors for development of professionals and entrepreneurs Sector with high competitiveness rating and clear regional approach Agriculture (vegetables, fruit and flowers) Manuf. metal prod. Manuf. cement prod. Manuf. furniture Physical media and software Chem. resins and rubber Manuf. clay products Basic chemicals {Autotransport R&D services Chem. pharmaceuticals Livestock raising Electr. inf. proc. Engineering and design services Manuf. glass products Messenger serv. Competitiveness in Mexico vs. other countries Passenger transp. Music, cinema, radio and TV (digital contents) Bev. and tobacco ind. Basic metal ind. Creation of economies of scope² Development Objectives¹ 1. Evaluation of each sector on the basis of meeting the four goals of developing professionals and entrepreneurs, with equal weight for each objective. 2. Economies of scope. Services with a higher added value which are also complementary to industries with high potential and competitiveness (machinery, automotive, electric equipment, etc.). Source: Análisis BCG

  18. Focalization criteria: The following sectors have been identified as strategic for the country:

  19. Manufacture of transport equipment-automotive industry • The Mexican auto industry has advanced in the value chain, particularly in innovation and its focus on areas of greater added value such as design. • Some of the plants located in Mexico are world references: • Ford in Hermosillo, which produces hybrid automobiles • Chrysler in Saltillo, which produces the world-renowned HEMI engine • Nissan in Aguascalientes, which, for the past year, has implemented the Nissan Green Program, designed to recycle 100% of the waste materials produced during the manufacturing process. This is the first plant outside Japan to comply with the program.

  20. Manufacture of transport equipment-auto industry • Finished goods manufacturers in the auto industry that confirm the trend of this sector towards activities with greater added value include: • The Chrysler Advanced Engineering and Design Center which carries out research projects and engineering tests, studies on environmentally friendly raw materials and emission reductions. • The Nissan Center for Modeling Automobile Design Prototypes in Mexicali, which began operating in January 2010 and performs world design operations using computer assisted stations. • The General Motors Regional Engineering Center, which forms part of the General Motors Global Engineering and Manufacturing Platform, which conducts research and development of engineering with an environmental impact.

  21. Specific Progress – Information Technology and Related Services Sector The IT and related services sector has grown significantly in recent years, due mainly to the development of clusters that have permanent liaison programs with academic and research institutes and the public sector. Jalisco NuevoLeon Federal District 18 35 21 Associated Associated Associated Source: Estudio de Competitividad de Clusters, 2008

  22. Physical media and software – Information Technology and Related Services Sector Liaisons and mergers have enabled small Mexican firms to produce large projects. TDCOM was taken over by Intel in 2000 Intellectual property development in integrated circuit test engineering HP Global gaveAsciexclusive rights to offer its product worldwide 4 International Patents SOLUCIONES TECNOLÓGICAS has an Electronic Vehicle Technology Center Use of Mexican technology in VW, Audi, GM and Ford vehicles

  23. INNOVAMÉDICA INNOVAMEDICA is a Mexican firm that was established in 2009 and that researches, designs and develops new medical products. It has an interdisciplinary group of engineers, designers, scientists and doctors that provide a full range of services including market studies, patentability analyses, industrial and electrical design, and quick prototype construction. Its developments include: Impedance Spectroscopy System. A monitoring probe for intensive therapy patients Artificial heart. A project that began in 2002 with the participation of 10 institutions (4 in the U.S. and 6 in Mexico). To date, over 24 million pesos have been invested in the development stage. INNOVAMEDICA has obtained 7 patents and has submitted 18 applications for regular patents for various projects for medical equipment development. Manufacture of machinery and equipment-medical equipment

  24. Development of Comprehensive Innovation System The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 24

  25. Financing programs for firms and projects Supported agents Programs under development Operating Programs Capital funds Mature firm (>2 years) Young firm (<2 years) New entrepreneurs Research Centers Researchers Students Applied research Commercial expansion Skills Development Commercial-ization Technological Development Production Development for Commercialization Basic research 25 Supported Activities

  26. Development of Comprehensive Innovation System The strategy adopted has made it possible to strengthen the various features of the innovation ecosystem. 26

  27. Specific progress Our productive and export activity has significantly advanced in the value chain. High technology exports are products with a high intensity of R&D, such as in the aerospace sector, computers, pharmaceutical products, scientific instruments and electric machinery. Source: United Nations, Comtradedatabase.

  28. Contents • Motivation • The Case of Mexico • Development of Comprehensive Innovation System • Specific results • Final remarks

  29. Final remarks • Innovation is a necessary condition for boosting Mexico’s Productivity • The Federal Government is therefore working together with the private and academic sectors on the design and implementation of a Comprehensive Innovation System characterized by: • Being a national rather than a government policy • Having a long-term vision

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