Lack of patents: the risk that Mexico misses the advantage of nearshoring

“Mexico is not an automotive power, we are a high-value automotive manufacturing power, because the technology comes from other countries. And the patent backlog is important in the country,” explains the expert. And, in this sense, he points out that the reality is that “nearshoring is not going to have a transfer (of technology).”

Although Mexico is one of the countries with the most graduated engineers in the region, this has not guaranteed the production of its own technology. And the key is the lack of a binding industrial policy between universities and companies, explains Víctor Gómez Ayala, director of Data Analytics at the Mexican Institute for Competitiveness.

This is already costing Mexico. Well, according to Gómez Ayala, the global relocation process has been underway for at least three years and other countries such as Vietnam, Thailand and Brazil have taken advantage of it more due to their better technological positioning and specialized talent.

Mexico against its competition

Historically, a handful of countries have managed to capitalize on the windows of opportunity represented by investment waves. The main examples are the countries of Southeast Asia and, of course, China itself.

The numbers don’t lie, Asia concentrates almost two thirds of the patents registered each year, according to data from the World Intellectual Property Organization. And Mexico’s lag behind its competitors, in terms of taking advantage of company relocation, is important.

According to the Global Innovation Index (GII) 2024, Vietnam ranks 46th globally, while Thailand and Brazil rank 43rd and 49th, respectively; Poland occupies position 41. Mexico, on the other hand, is in 58th place.

In 2022, Brazil, Thailand and Poland, countries that in the opinion of some experts have made better use of the relocation process, will surpass Mexico in the registration of utility model applications, a type of right registered to exclusively exploit a technical invention. for a while.

The problem, furthermore, is that this type of patents fell 13.9% in Mexico, while those in Vietnam grew 29% in that year, according to WIPO data.

Why doesn’t Mexico innovate enough?

According to Gómez Ayala, an Imco specialist, insufficient innovation in Mexico is caused by the lack of research and development centers, low investment from the State and the private sector, a low connection between academia and industry and the absence of a policy solid industrial.

“There is a broad correlation between the presence of research centers among the adult population and the generation of patents; it is not only about having universities that provide undergraduate training, but the development of postgraduate programs that provide conditions for registering patents is key. “, said.

The new government promises technological transformation

President Claudia Sheinbaum promised, in her 100 points for Transformation, that the government would be a technology producer, not only of its own electric car, but also of Artificial Intelligence and other innovations.

But the problem, historically, has been the budget: “When we analyze the structure of the Mexican Government’s public finances, we see that they are highly pressured, and the space to spend on research and development is very limited, which directly affects the development of innovation,” explained Gómez Ayala.

The government of Vietnam recently announced a legal corridor to attract investment and the development of semiconductors. This includes the Investment Law and the Corporate Tax Law, as well as the Science, Technology and Innovation Development Strategy until 2030. The objective is that, in that year, income from the semiconductor industry will reach 25 billion dollars.

According to data from the World Bank, Mexico spent only 0.27% of its GDP on Research and Development in 2022. Investment in this area has been declining; in 2017 the proportion was 0.58%.

Thailand, on the other hand, reached an investment equivalent to 1.21% of its GDP in R&D, surpassing Mexico since 2018. Brazil invests 1.15% of its GDP and the ratio in China reaches 2.34%.

An industrial policy must exploit regional advantages to meet the needs of companies in the best possible way; But without this coordination, technological opportunities are limited, specialists agree.

The effects of this lag are a national technological backwardness and, consequently, a less competitive economy, more dependent on foreign capital and destined to manufacture, instead of innovate. And, for now, other countries have benefited more from the latest realignments of the global economy.

“Vietnam has been one of the countries that has taken advantage of it the most, as has Poland. For them it is not nearshoring, it is relocation. Mexico has (in addition) been affected by the uncertainty regarding internal economic policy, the shortage of electricity, water and safe roads, also the lack of promotion abroad and reception packages for these companies that want to reach Mexico and do not know how the Mexican economy works,” said Gabriela Siller, director of Economic Analysis at Banco BASE.