O E C D OECD Reviews of Regional Innovation R e v 15 MEXICAN STATES ie w s o OECD Reviews of Regional Innovation Despite macroeconomic stability in recent years, Mexico still suffers from stagnant productivity f R growth. It is losing ground with respect to several competing economies and among OECD countries e g it has one of the highest rates of inequalities between regions. io 15 MEXICAN STATES n Mexico’s long-term competitiveness in a global context will require greater public and private a action to spur innovation and economic growth in regions throughout the country. At the national l In n level, increased attention to policies for regional development, science, technology and innovation, o v enterprise, and higher education could boost clusters and regional innovation systems. States a t have also taken policy action, but they too could do more to address the existing gaps in terms of io n innovation and economic performance. This report reviews how both national and state policies in Mexico can better support regional innovation systems and includes profiles of 15 states. It will be of interest to policy makers, firms and others active in promoting innovation and regional economic development. ALSO AVAILABLE IN THE OECD REVIEWS OF REGIONAL INNOVATION SERIES: Piedmont, Italy (2009) North of England, United Kingdom (2008) Globalisation and Regional Economies: Can OECD Regions Compete in Global Industries? (2007) Competitive Regional Clusters: National Policy Approaches (2007) 1 The full text of this book is available on line via these links: 5 www.sourceoecd.org/regionaldevelopment/9789264060128 M e www.sourceoecd.org/scienceIT/9789264060128 x www.sourceoecd.org/governance/9789264060128 ic a www.sourceoecd.org/industrytrade/9789264060128 n S Those with access to all OECD books on line should use this link: ta www.sourceoecd.org/9789264060128 te s SourceOECD is the OECD online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected]. ISBN 978-92-64-06012-8 -:HSTCQE=U[UVW]: 04 2009 06 1 P www.oecd.org/publishing OECD Reviews of Regional Innovation 15 Mexican States ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. © OECD 2009 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) [email protected] or the Centre français d'exploitation du droit de copie (CFC) at [email protected]. 3 FOREWORD – Foreword The importance of regional dynamics in supporting innovation is widely recognised. Strong dynamics of innovation generation in regions are crucial for achieving national innovation policy objectives. In addition, innovation performance can contribute to improving the overall economic competitiveness of individual regions. Policy recommendations are therefore being sought by both science and technology and regional policy actors, as well as the regions themselves. OECD countries and regions are nevertheless struggling with how to best promote regional innovation. How should national innovation policies take into account this regional dimension (i.e., the importance of “place”)? How can regional actors support innovation that is relevant for their specific regional context? This role sharing in a multi- level governance for innovation is a new area for OECD countries. The OECD launched in 2007 the series OECD Reviews of Regional Innovation to address this demand by national and regional governments for greater clarity on how to strengthen the innovation capacity of regions. These reviews are part of a wider project on competitive and innovative regions of the OECD Territorial Development Policy Committee. This work also supports the OECD Innovation Strategy. The series includes both thematic reports and reviews of specific regions. This study, OECD Reviews of Regional Innovation: 15 Mexican States, took place concurrently with another study, OECD Reviews of Innovation Policy: Mexico. The two studies are complementary to provide a coherent package of recommendations to Mexico for both national and sub-national levels to work effectively together to support innovation-led sustainable economic growth throughout the country. OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009 4 - ACKNOWLEDGEMENTS Acknowledgements A number of external contributions have been made to this OECD report. Consultant contributions include: Enrique Dussel Peters, Professor at the Graduate School of Economics, Universidad Nacional Autónoma de México, with support from Professor Miguel Angel Mendoza in the econometric analysis, and Cristina Vázquez and Alejandro Pérez in the statistics components; Mr. Jorge Gabriel García Rojas Alarcón; and Mr. Daniel Hugo Villaviciencio Carbajal, Professor at the Universidad Autónoma Metropolitana Unidad Xochimilco with support from Edgar Bañuelos, Eduardo Flores and Israel Musiño. The Inter-American Development Bank through the Science and Technology Division of the Social Sector as well as the Multilateral Investment Fund participated in this review through joint site visits, comments and consultant inputs from Clemente Ruiz Duran, Professor at the Graduate School of Economics, Universidad Nacional Autónoma de México, and Carlo Pietrobelli, Professor of International Economics at Roma Tre University. Peer reviewers to this review included Mr. Robert M. McKinley, Associate Vice President for Economic Development, The University of Texas at San Antonio (United States) and Mr. Juan José Mangas, Advisor, Cotec Fundación para la innovación tecnológica (Spain). Alberto Saracho Martínez of the Fundación IDEA and Leopoldo Rodríguez Sánchez President of the Asociación Mexicana de Directivos de la Investigación Aplicada y el Desarrollo Tecnológico (ADIAT) also made valuable comments to the report. This publication was co-ordinated and drafted by Karen Maguire and Carlos Marquez-Padilla of the OECD Secretariat under the supervision of Mario Pezzini, Deputy Director of the Public Governance and Territorial Development Directorate. Additional analyses were provided by Javier Sanchez-Reaza, Patrick Dubarle and Brunella Boselli, also of the OECD Secretariat. Jeanette Duboys prepared this document for publication. OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009 5 TABLE OF CONTENTS – Table of Contents List of Acronyms .............................................................................................................. 11 Assessment and Recommendations ................................................................................ 15 Introduction .................................................................................................................... 15 The economic and innovation challenges in Mexico ..................................................... 16 How can national policy help? ....................................................................................... 18 What should states do? ................................................................................................... 27 What governance tools support the policy objectives? .................................................. 30 Methodological Introduction .......................................................................................... 35 Part I: Synthesis Report .................................................................................................. 37 Chapter 1: Mexico’s Regional Economic and Innovation Performance ................... 39 Introduction .................................................................................................................... 39 The national context ....................................................................................................... 39 Macroeconomic stability but insufficient growth ....................................................... 39 Several factors limiting economic growth .................................................................. 42 The regional perspective: a tale of different “Mexicos” ................................................ 57 Regional economic performance ................................................................................ 57 Territorial disparities .................................................................................................. 59 Poverty and inequalities ............................................................................................. 61 Sources of persisting GVA per capita differences ..................................................... 63 The regional innovation dimension................................................................................ 88 Inputs for innovation .................................................................................................. 90 Linkages and interactions for innovation ................................................................... 95 Output indicators ........................................................................................................ 99 Annex 1.A1...................................................................................................................... 106 Manufacturing industry specialisation ..................................................................... 106 Manufacturing specialisation index .......................................................................... 109 A regional perspective on FDI in Mexico ................................................................ 110 Chapter 2: National Policies to Support Regional Clusters and Innovation Systems ............................................................................ 127 Introduction .................................................................................................................. 127 Trends in OECD countries ........................................................................................... 128 Regional development policy: need for national approach with competitiveness focus .................................................................................................. 129 Enterprise policies ........................................................................................................ 134 OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009 6 - TABLE OF CONTENTS Sectoral policies: place-blind and place-based examples ......................................... 134 FDI policy: need to seek regional spillovers ............................................................ 137 SME policy: general support and networking .......................................................... 142 Science and technology policy: increasingly supporting a “regional” approach ......... 151 Higher education policy: incentives and disincentives ................................................ 160 Chapter 3: Sub-national Initiatives for Regional Clusters and Innovation Systems ............................................................................ 171 Introduction .................................................................................................................. 171 State programmes for competitiveness ........................................................................ 171 Public and private stakeholder roles in competitiveness strategies .......................... 173 Supporting sectors and clusters .................................................................................... 174 Sectoral priorities common across many states ........................................................ 174 Cluster support: achieving critical mass ................................................................... 176 State level actions to support regional innovation systems .......................................... 184 Science and technology plans................................................................................... 186 Science and technology councils: variations in models and budgets ....................... 189 State level science and technology programmes and federal programme use.......... 190 Annex 3.A1...................................................................................................................... 200 Chapter 4: Multi-level Governance to Promote Regional Competiviness and Innovation systems ............................................................................ 201 Introduction .................................................................................................................. 201 Responsibilities for regional competitiveness and innovation systems ....................... 201 Municipal level ......................................................................................................... 202 State and federal role sharing to support innovation ................................................ 204 Continuity challenges at all levels of government ................................................... 205 Cross-sectoral co-ordination and “gatekeeper” roles ................................................... 206 National level ........................................................................................................... 206 State level ................................................................................................................. 209 Centralisation and impacts on competitiveness ........................................................... 209 Fiscal centralisation .................................................................................................. 209 Strategies to capture economic benefits of decentralisation-type mechanisms ........ 214 Tools for national and sub-national responsibility sharing and alignment .................. 217 Monitoring performance: transparency, trust-building and programme effectiveness ................................................................................................................. 220 Annex 4.A1...................................................................................................................... 223 Part II: State Profiles .................................................................................................... 225 Chapter 5: Aguascalientes ........................................................................................... 227 Chapter 6: Chihuahua ................................................................................................. 239 Chapter 7: Coahuila ..................................................................................................... 251 Chapter 8: Colima ........................................................................................................ 263 Chapter 9: Guanajuato ................................................................................................ 275 OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009 7 TABLE OF CONTENTS – Chapter 10: Jalisco ....................................................................................................... 287 Chapter 11: Mexico ...................................................................................................... 299 Chapter 12: Michoacan ................................................................................................ 311 Chapter 13: Nuevo Leon .............................................................................................. 323 Chapter 14: Puebla ....................................................................................................... 335 Chapter 15: Queretaro ................................................................................................. 347 Chapter 16: San Luis Potosi ........................................................................................ 359 Chapter 17: Tamaulipas .............................................................................................. 371 Chapter 18: Yucatan .................................................................................................... 383 Chapter 19: Zacatecas .................................................................................................. 395 Bibliography ................................................................................................................... 407 Tables Table 0.1. Policy trends supporting clusters and regional innovation systems ...... 19 Table 0.2. Policy priorities by type of RIS ............................................................. 27 Table 1.1. Educational attainment of the adult population ..................................... 54 Table 1.2. Classification of OECD and Mexico regions ........................................ 58 Table 1.3. Poverty, inequality and human development in regions ....................... 62 Table 1.4. FDI by region (1994-2007) ................................................................... 79 Table 1.5. FDI/GDP by region ............................................................................... 79 Table 1.6. Regional competitiveness indices ......................................................... 85 Table 1.7. State rankings on regional competitiveness indices .............................. 87 Table 1.8. Industries, technology and innovation................................................. 101 Table 1.9. Gross value added by technology level ............................................... 102 Table 2.1. Policy trends supporting clusters and regional innovation systems .... 129 Table 2.2. Rationale for pan-regional RIS collaboration ..................................... 132 Table 2.3. New regional development policy frameworks: regional competitiveness ..................................................................... 134 Table 2.4. Sectoral support programmes .............................................................. 136 Table 2.5. FDI spillover channels ........................................................................ 138 Table 2.6. Policy measures to create and deepen MNE-SME linkages ............... 142 Table 2.7. Budget for SME Fund programmes .................................................... 144 Table 2.8. Business incubators and enterprises .................................................... 146 Table 2.9. CONACYT budget .............................................................................. 155 Table 2.10. Utilisation of R&D tax incentive......................................................... 156 Table 2.11. Types of higher education institutions ................................................ 162 Table 2.12. CONACYT centres by region ............................................................. 164 Table 2.13. Scholarships, SNI researchers and basic science support by state ...... 165 OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009 8 - TABLE OF CONTENTS Table 3.1. Prioritised sectors in participating states ............................................. 175 Table 3.2. Elements of state S&T plans ............................................................... 187 Table 3.3. State participation in select innovation and technological development programmes ................................................................... 196 Table 3.4. State participation in select scientific research programmes ............... 197 Table 3.5. Categorisation of states by type of innovation assets .......................... 198 Table 4.1. Governance sharing for competitiveness ............................................ 202 Table 4.2. Municipalities: number and population distribution by state .............. 203 Table 4.3. National-regional responsibility sharing for innovation policy ........... 204 Table 4.4. Examples of co-ordination bodies for place-based approaches .......... 206 Table 4.5. Empirical results on the effects of decentralisation on economic growth ................................................................................. 216 Figures Figure 0.1. Participating states ................................................................................. 16 Figure I.1. Basis for regional competitiveness ........................................................ 35 Figure I.2. Participating states ................................................................................. 36 Figure 1.1. Mexico's growth performance in comparison........................................ 41 Figure 1.2. The sources of persisting real income differences ................................. 43 Figure 1.3. GDP per hour worked and growth in productivity ................................ 44 Figure 1.4. Gross foreign direct investment in comparison ..................................... 46 Figure 1.5. Factors contributing to differences in output ......................................... 47 Figure 1.6. R&D intensity and evolution of gross domestic expenditure on R&D ................................................................................................. 49 Figure 1.7. Researchers, 2005 .................................................................................. 51 Figure 1.8. Triadic patent families per million population ...................................... 52 Figure 1.9. Scientific articles per million population ............................................... 53 Figure 1.10. Top performers in the PISA science assessment and country research intensity ...................................................................... 55 Figure 1.11. Student performance and spending per student ..................................... 55 Figure 1.12. Population with tertiary attainment, 2005 ............................................. 56 Figure 1.13. OECD regional classification by income levels and growth rates ......... 58 Figure 1.14. GDP, GDP per capita and growth rates ................................................. 59 Figure 1.15. Marginalisation levels, 2005 .................................................................. 61 Figure 1.16. Factors contributing to differences in regional GVA per head .............. 64 Figure 1.17. Evolution of GDP per worker ................................................................ 65 Figure 1.18. Gini index of inequality of GDP per worker ......................................... 65 Figure 1.19. Regional dispersion in GDP per worker ................................................ 66 Figure 1.20. Percentage of workers in regions with GDP per worker below the national average ............................................................................... 67 Figure 1.21. PISA results and average schooling years ............................................. 68 Figure 1.22. GDP per worker and tertiary attainment ................................................ 69 Figure 1.23. Distribution of state GDP per capita by main economic sector ............. 71 Figure 1.24. Specialisation in specific low-tech manufacturing industries................ 73 Figure 1.25. Specialisation in specific mid-low tech manufacturing industries ........ 73 Figure 1.26. Specialisation in specific mid-high tech manufacturing industries ....... 74 Figure 1.27. Specialisation in specific high-tech manufacturing industries .............. 74 Figure 1.28. Regional specialisation .......................................................................... 76 OECD REVIEWS OF REGIONAL INNOVATION: 15 MEXICAN STATES – ISBN 978-92-64-06012-8 © OECD 2009