Mexico

This note provides a medium-term agenda for supporting Mexico's competitiveness by fostering greater innovation. Globalization and the dynamism of economies that compete... Show More + with Mexico, particularly those in East Asia, bring a renewed urgency to Mexico's innovation policy agenda. While the firm is at the center of innovation, empirical evidence shows that public policy can generate an external environment more conducive to innovation. The past decade has brought several policy changes and new programs, but further changes will help the country catch up with more innovative economies and move up the value chain. Given the multi sectoral nature of innovation and multiplicity of programs, better coordination in policymaking, stronger mechanisms to define budgetary priorities for innovation, and greater coherence and synergies among public policy interventions are necessary. A comprehensive innovation strategy as used in highly innovative economies such as Finland can help guide such efforts. Show Less -

Unlike social programs targeting individuals, few enterprise support programs have been rigorously evaluated, and existing evaluations have mostly been done in high-income... Show More + countries such as the United States and Europe. Mexico spends a large share of government resources on small and medium enterprise programs each year. How effective these programs have been in achieving their objectives is unclear. In Mexico, impact evaluations of small and medium enterprise programs are rare, and most are qualitative in nature. This is the first paper evaluating these programs in Mexico using firm-level panel data. The continuous and ten-year panel data -- from the 1994-2005 period -- allow the authors to address selectivity bias and unobserved firm heterogeneity by applying a generalization of differences-in-differences models combined with propensity score matching methods. This study finds evidence that participation in small and medium enterprise programs is associated with improvements in key variables such as value added, gross production, and wages. Furthermore, the study finds evidence that some of the positive effects can take several years to realize. The results also call for streamlining and greater efficiency in Mexico's small and medium enterprise programs. Show Less -

This book is about how Mexico can transform itself into a knowledge based economy by tapping into a number of existing socioeconomic advantages: macroeconomic stability,... Show More + emerging regional enterprise clusters that combine local talent with a dynamic private sector, geographical proximity to the world's knowledge economy powerhouse-the United States, as well as a rich cultural base that generates a wealth of ideas. Mexico's transition to a knowledge-based economy provides a broad assessment of the country's readiness to join the global knowledge economy, highlighting the importance of education and institutional reform, and of creating an environment that is conducive to innovation. This transformation, however, is not only about shaping the reform agenda from the top down. It also means trial-and-error experimentation to test what works and what doesn't in the Mexican context, and then taking successful bottom-up initiatives to scale. The book takes a dual approach in its analysis and recommendations. It tackles both the strategic long-term agenda, which entails many difficult changes and choices, while also proposing a diversity of pragmatic, short-and medium-term entry points to initiate and promote the transition within the current institutional structure. Show Less -

The objective of this report for Mexico's competitiveness is to inform policy makers, the private sector, and the public at large about competitiveness priorities and... Show More + shortcomings in Mexico, and to point the way forward on improving competitiveness. The report highlights constraints to competitiveness and identifies key high impact interventions to maximize Mexico's potential for efficiency, generate jobs, and move the country to a more innovation-driven stage of development. It draws on a series of focused analytical pieces that were conducted for Phases 1 and 2 of the Programmatic Analytical and Advisory Activities, as well as extensive World Bank work on competitiveness issues in Mexico and beyond. The report also recognizes that the Fox administration has taken important steps that have laid a solid foundation for future efforts. Yet, improving competitiveness is a long-term challenge that the next administration will face over the coming years. Show Less -

This report's main messages are that the knowledge revolution offers unprecedented challenges and opportunities for Mexico and to take advantage of new knowledge-based... Show More + opportunities, Mexico must take concerted action now. The stakes are high. The NAFTA agenda needs to be deepened (Chapter 1 and 2). Mexico should create institutional capabilities through innovation and enterprise upgrading, improving education and skills, and updating its infrastructure for information and communications technology (Chapters 3-5). Momentum for change must come from the bottom up and from the top down. A pragmatic way to move forward is to increase top decision-makers' awareness of the need for consensus concerning how to overcome key national obstacles. Mexico then can move ahead with concrete and manageable bottom-up approaches that promote national vision and leadership and build on past successes (Chapter 6). Concerted action among stakeholders is vital for progress. States and champions in the private sector are important agents of the transition to knowledge-based competitiveness. The heterogeneity of agents can be an advantage. Alliances among dynamic agents at the regional level are the key to creating and benefiting from new opportunities (Chapter 7). Show Less -

The U.S.-Mexico case (2002-04) was the first (and so far only) case of World Trade Organization (WTO) dispute resolution on telecommunications services and the first... Show More + on services only. The findings of the Panel charged with settling the dispute contain interpretations of the General Agreement on Trade in Services (GATS), especially its Annex on Telecommunications and the Reference Paper that sets regulatory principles. Although these interpretations strictly apply only to the case examined, they have implications for other countries and sectors and beyond trade law. The following are some of the findings. Telecommunications services originated in one country and terminated in another country are cross-border services under the GATS irrespective of whether the same service provider is present in both countries. The accounting rate regime, whereby operators share revenue from international services provided jointly, is subject to the discipline of cost-based interconnection for countries that have adopted the Reference Paper. Uniform settlement rates and proportional return are anticompetitive practices under the Reference Paper even when they are mandated by law. The lack of implementing regulations does not excuse the country from meeting its commitments under the GATS. Mexico and the United States, although not in full agreement with the Panel, did not appeal. An agreed plan to address the underlying legal and regulatory issues was successfully implemented in July 2005. Show Less -

Data gathered during studies conducted over the past four years in Mexico City, Mexico (Distrito Federal); Bogota, Colombia, and in several Brazilian cities suggests... Show More + that in these countries somewhere between 65 and 85 percent of households are "unbanked", those who do not hold any kind of deposit or transaction account in any formal sector financial institution. This note addresses what can be done to bring banking to the unbanked - and vice versa using five cases from the region: 1) the Nicaragua Broad Based Access to Finance Project focuses on increasing the number of points of service to remote and unattended communities; 2) the Colombia Business Productivity and Efficiency Development Policy Loan also emphasizes increased service points through regulatory reform; 3) in Mexico, the National Savings and Financial Services Bank (BANSEFI for its acronym in Spanish) projects help to promote new service providers with state of the art technology and regulatory services; and 4) Brazil's government has developed alternative service payment systems and regulations to encourage access to savings. Show Less -

The report examines two components of new technology adoption by Mexican manufacturing firms. First, it questions which firms, under what circumstances, and performance... Show More + adopt such technology. To measure performance, productivity wages, and net employment of a firm were used, leading to further questions on whether technological change helps workers - of a certain skill level - disproportionately. Second, it argues that adoption of new technologies happens under the right circumstances, and further reviews which are the firms, and circumstances surrounding the choice of technology. The analysis is based on data from the National Survey of Employment, Wages, Technology and Training (ENESTYC), and the National Industrial Survey (EIA) for 1992, 1995, and 1999. Results largely suggest that performance (including statistics, and measures on job creation, and/or job dislocation), is superior with technology adoption, though it does not imply performance increases in all firms. Rather, the effects of technology vary depending on location, and size of enterprise. Nonetheless, investments in human capital - training in conjunction with technology adoption - increases productivity benefits. In addition, the likelihood for new technologies, also varies markedly by time period, and, the complexity of the technology correlates both with the size, and skill levels of a firm's work force. Policy recommendations include widespread technology know-how, facilitating inter-firm linkages, supported by both government financing to encourage a competitive business environment, and by a continued increase in research and development funding, public as well as private funding. Show Less -

In many economies, studies have found large wage differentials not accounted for by workforce characteristics, collective bargaining, or market power. Researchers attribute... Show More + these differentials to either unobserved worker quality or pay incentives designed to elicit worker effort. This article finds empirical support for an alternative explanation: These wage differentials result from firms' technology-generating activities. Using firm-level data from Colombia, Mexico, and Taiwan (China), the article compares the effects of research and development, worker training, and exports by employers on the wages of skilled and unskilled workers. The results suggest that technology investments lead to large wage premiums for skilled workers but not for unskilled workers. These wage premiums are primarily the result of investments in research and development and in training, while exporting is relatively less important except in Colombia Show Less -

The newest Bank supported social funds are designed explicitly to increase the participation of beneficiaries in identifying and managing microprojects, with the aim... Show More + of making project activities more relevant and sustainable. Features which support participation are built into the design of the funds' management structure and of the microproject cycle. Additional time, management and training resources are needed to assess and build the necessary capacity of local organizations; and special measures may be required to enable the most marginalized groups to participate. Show Less -