International Business (2017) - A study on MEXICO: Global Competitiveness Index Economic Freedom Index Political Risk Index Happiness Index Easy to start business ranking.

1. INTERNATIONAL BUSINESS
PROJECT REPORT
2017
HardikaSharma – 24/025,
Rahul Tanwar – 24/008,
Sonam Makol – 24/034
Apeejay School of Management
3/6/2017
MEXICO – AN ECONOMY’s STUDY

2. Table of Content
S.No Topic Page No.
1 Introduction 3
2 Socio-Cultural Environment 4
3 Macro-Economic Environment 9
4 Political-Legal Environment 12
5 Technological Environment 15
6 Ease of Doing Business 18
7 Global Competitiveness Index 24
8 Conclusion 26
9 References 27

3. MEXICO - INTRODUCTION
They say that Mexico is a country no one ever leaves. Every year, millions of tourists
pass through, and Mexicans jovially warn that a part of them
will remain behind forever. Most visitors are vacationing
North Americans who wind up on the brilliant beaches of
Cancun, Acapulco, Mazatlan, and Puerto Vallarta. The beaches,
of course, are among the world's best - but those who venture
inland are rewarded with the true soul of Mexico, which has
always resided firmly in the interior.
And it is a big soul. The Republic of Mexico is vast, comprising
nearly two million square miles of coastline, desert, rain
forest, mountains, and fertile plains. From the American
borderlands of the wide, agriculturally rich north, the country narrows gently as it
sweeps south and east. The two main mountain ranges, the Sierra Madre Occidental and
the Sierra Madre Oriental, hug the west and east, finally merging into the volcanically
active central highlands and the capital, Mexico City - the most populous city in the
world. Further south, the country narrows to only 100 miles, then broadens again
before reaching the Guatemalan border. There are two major peninsulas in Mexico that
are almost countries themselves. In the west is the poetically barren Baja Peninsula,
which seals in the biological riches of the Sea of Cortes; to the east, protruding into the
Caribbean like the end of a fish hook, is the Yucatan peninsula, bursting with rain
forests, Mayan ruins, and white powder beaches.
The population is about 106 million, and the generosity of the Mexican people is
unsurpassed. Knowing a few simple sentences in Spanish will win hearts.
Mexico has been graced with an unusually temperate climate year-round. The most
important thing to remember is that the Mexican summer is also the rainy season,
although the rain rarely lasts more than a few hours, and typically arrives in the late
afternoon. Extremes are present only in the North and in Baja, both of which have
deserts where the temperature leaps above 100F. Mexico City has a year-round
temperature in the high 80s, while the coasts usually stay in the mid-90s. Night time
temperatures fall somewhat, but rarely break down below a comfortable 60F.
ECONOMY OVERVIEW
Region Latin America & Caribbean
Income Category Upper Middle Income
Population 127,017,224
GNI per capita (US $) 9,710
DB2017 rank 47
DB2016 rank 45*
Change in rank -2

4. Socio- Cultural Environment
The culture of Mexico has undergone a tremendous transformation over the past few
decades and it varies widely throughout the country. Many Mexicans live in cities, but
smaller rural communities still play a strong role in defining the country’s collective
vibrant community.
Mexico is the 14th largest country in the world, according to the Central Intelligence
Agency's World Fact book. According to the CIA, Mexico consists of several ethnic
groups. The mestizo (Amerindian-Spanish) group accounts for 60 percent of the
population. Amerindian people or predominantly Amerindian people account for 30
percent, while 9 percent of the population is white. These groups create a culture that is
unique to Mexico. Here is an overview of Mexican culture.
Languages of Mexico
The overwhelming majority of Mexicans today speak Spanish. According to the CIA,
Spanish is spoken by 92.7 percent of the Mexican population. About 6 percent of the
population speaks Spanish and indigenous languages, such as Mayan, Nahuatl and other
regional languages. Indigenous Mexican words have even become common in other
languages, including English. For example, chocolate, coyote, tomato and avocado all
originated in Nahuatl.
Religions of Mexico
"Much of Mexican culture revolves around religious values and the church, as well as the
concept of family and inclusiveness," said Talia Wagner, a marriage and family herapist
in Los Angeles. Around 82 percent of Mexicans identify themselves as Catholic,
according to the CIA, although many have incorporated pre-Hispanic Mayan elements as
part of their faith. Christian denominations represented include Presbyterians, Jehovah's
Witnesses, Seventh-Day Adventists, Mormons, Lutherans, Methodists, Baptists and
Anglicans. There are also small communities of Muslims, Jews and Buddhists.
Values of the Mexican People
Mexicans put a high value on hierarchy and structure in business and family matters.
Especially outside of cities, families are typically large and Mexicans are very conscious
of their responsibilities to immediate family members and extended family such as
cousins and even close friends.
Hosting parties at their homes plays a large part of Mexican life and making visitors feel
comfortable is a large part of the values and customs of the country.
"Family units are usually large, with traditional gender roles and extensive family
involvement from the external members who assist one another in day to day life,"
Wagner told Live Science. There is a strong connection between family members.
"Parents are treated with a high degree of respect, as is the family in general and there
may be constant struggle, especially for the growing children between individual wants
and needs and those wants and needs of the family," added Wagner.
Mexican food
Mexican culinary norms vary widely based on income level and social class. The diet of
working-class Mexicans includes staples such as corn or wheat tortillas, along with

5. beans, rice, tomatoes, chili peppers and chorizo, a type of pork sausage. Empanadas,
which are handheld pasty pockets, can contain savory or sweet fillings. Many Mexicans
love spicy foods full of heat.
The diets of middle- and upper-income Mexicans are more closely aligned with diets of
Americans and Europeans and include a wide variety of food items prepared in wide
range of culinary styles.
Mexico is known for its tequila, which is made from agave cactus that is well suited to
the climate of central Mexico. Soda is a very popular drink in Mexico, as the country has
a well-developed beverage industry.
A mariachi band plays music in Puebla. Marichi music is a tradition that goes back to the
19th century.
Mexican art and literature
Clay pottery, embroidered cotton garments, wool shawls and outer garments with
angular designs, colorful baskets and rugs are some of the common items associated
with Mexican folk art.
The country is closely associated with the Mariachi style of folk music. Originated in the
southern part of the state of Jalisco sometime in the 19th century, it involves a group of
musicians — playing violins, guitars, basses, vihuelas (a five-string guitar) and trumpets
— and wearing silver-studded charro suits and elaborate hats. "La Cucaracha" is a well-
known Mariachi staple.
Two of Mexico's most famous artists are Frida Kahlo and Diego Rivera. Their paintings
include vibrant colors and depictions of life in Mexico.
Mexican clothing
Many may not think of Mexico as a place that fosters high fashion, but many fashion
designers hail from Mexico, such as Jorge Duque and Julia y Renata. There is also a
Mexico Fashion Week. In the cities, fashion in Mexico is influenced by international
trends, so the typical urban Mexican dresses similar to people in Europe and the United
States.
In more rural areas, a typical woman’s wardrobe includes skirts, sleeveless tunics called
huipils, capes known as quechquémitls and shawls called rebozos.
One distinguishing article of traditional men’s clothing is a large blanket cape called a
sarape. Boots are also a wardrobe staple.
Some traditional clothing, now typically worn for celebrations and special occasions,
include sombreros and the charro suits worn by Mariachi bands.
Holidays and celebrations
The Feast of Our Lady of Guadalupe, which is celebrated on Dec. 12, is a major Mexican
holiday celebrating the appearance of the Virgin Mary to an Indian man in the first years
of Spanish rule. She is the patron saint of the country.
The Day of the Dead, celebrated on Nov. 2, is a day set aside to remember and honor
those who have died, according to the University of New Mexico. Carnival is also
celebrated in many communities throughout Mexico to mark the period before Lent.

6. Independence Day, marking the country’s separation from Spain in 1810, is celebrated
on Sept. 16. Cinco de Mayo, which marks a Mexican military victory over the French in
1862, is more widely celebrated in the United States (as a beer promotion) than it is in
Mexico.
Human Development Index (HDI)
The HDI is a summary measure for assessing long-term progress in three basic
dimensions of human development: a long and healthy life, access to knowledge and a
decent standard of living. A long and healthy life is measured by life expectancy.
Knowledge level is measured by mean years of education among the adult population,
which is the average number of years of education received in a life-time by people aged
25 years and older; and access to learning and knowledge by expected years of
schooling for children of school-entry age, which is the total number of years of
schooling a child of school-entry age can expect to receive if prevailing patterns of age-
specific enrollment rates stay the same throughout the child's life. Standard of living is
measured by Gross National Income (GNI) per capita expressed in constant 2011
international dollars converted using purchasing power parity (PPP) rates.
Mexico’s HDI value and rank
Mexico’s HDI value for 2014 is 0.756— which put the country in the high human
development category—positioning it at 74 out of 188 countries and territories.
Between 1980 and 2014, Mexico’s HDI value increased from 0.601 to 0.756, an increase
of 25.8 percent or an average annual increase of about 0.68 percent.
Table A reviews Mexico’s progress in each of the HDI indicator. Between 1980 and 2014,
Mexico’s life expectancy at birth increased by 10.2 years, mean years of schooling
increased by 4.5years and expected years of schooling increased by 2.9 years. Mexico’s
GNI per capita increased by about 29.7percent between 1980 and 2014.

8. Happiness Index
Mexico has been ranked No. 2 in the world by the index, described by its creator as a
measurement of sustainable well-being.
It was well-being, along with life expectancy, where Mexico scored high. Data gathered
by the research firm Gallup measured how satisfied citizens felt with life overall, on a
scale of one to 10, and gave Mexico 7.3 for well-being, 11th out of 140 countries.
Life expectancy of 76.4 years put Mexico in 39th place in that category.
Another factor was “inequality of outcomes,” which takes into account inequality within
a country in terms of how long people live and how happy they feel based on the
distribution of life expectancy and well-being data.

9. MACRO ECONOMIC ENVIRONMENT
Historic Perspective
Mexico's economic history has been characterized since the colonial era by resource
extraction, agriculture, and a relatively underdeveloped industrial sector. Economic
elites in the colonial period were predominantly Spanish born, active as transatlantic
merchants and silver mine owners and diversifying their investments with the landed
estates. The largest sector of the population was indigenous subsistence farmers, who
lived mainly in the centre and south.
Independence in Mexico in 1821 was economically difficult for the country, with
Spanish merchants returning to Spain and many of the most productive silver mines not
only damaged from the insurgency, but also the loss of its supply of mercury from Spain.
A persistent trend of increasing debt-to-GDP for almost a decade now (from 29 percent
in 2007 to an estimated 50.5 percent by the end of 2016) in combination with falling oil
revenue, a fragile financial situation of the National Oil Company PEMEX as well as
disappointing economic growth led rating agencies to put Mexico’s sovereign
(investment grade) rating on a negative outlook.
MACRO ECONOMIC PARAMETERS
Mexico is among the world's 20 largest economies and is the second largest economy in
Latin America. In 2014, its economy—which is highly dependent on the health of the
U.S. economy—grew by 2.4%. Contrary to the more optimistic forecasts, growth
maintained a similar pace in 2015 (2.3%). The IMF forecasts a 2.6% growth rate for
2016, with poverty and the country's large informal sector remaining key obstacles to
greater economic development. Since 2012, the Mexican Peso has fallen against the U.S.
Dollar, Chinese Yuan and the British Pound. The economy has benefited from a booming
automobile industry and, in 2014, Mexico became the largest car producer on the
subcontinent. Remittances from Mexicans living in the U.S., which represent the
country’s second largest source of foreign currency, grew steadily in both 2014 and
2015. While FDI had declined in 2014, it rebounded strongly in 2015.

10. In 2015, unemployment dropped to 4.3%; however, the informal sector still employs
59% of the workforce. There are high inequalities both in terms of income and exposure
to natural disasters. More than 46% of the population lives in poverty.
Main Indicators 2013 2014 2015 2016 2017 (e)
GDP (billions USD) 1,261.98 1,298.18 1,143.80 1,063.61e 1,124.32
GDP (Constant Prices,
Annual % Change)
1.4 2.2 2.5 2.1e 2.3
GDP per
Capita (USD)
10,659e 10,844e 9,452e 8,699e 9,102
General Government
Balance (in % of GDP)
-4.4 -4.9 -4.7 -4.2e 2.6
Inflation Rate (%) 3.8 4.0 2.7 2.8e 3.3
Unemployment
Rate (% of the Labour
Force)
4.9 4.8 4.4 4.1 3.9
Current Account (in
% of GDP)
2.5 -2.0 2.9 -2.7e

11. ECONOMIC FREEDOM INDEX
Prudent fiscal and monetary policies have enhanced Mexico’s macroeconomic performance.
The pace of change has accelerated in recent years as previously unthinkable structural
reforms have been adopted in parts of the economy that include the energy and
telecommunications sectors. The regulation of commercial operations has become more
streamlined, and business formation is relatively easy.
However, lingering constraints on achieving even more dynamic economic expansion are
numerous, including the lack of competition in the domestic market, labor market rigidity,
institutional shortcomings within the judicial system, and limited progress in curbing high
levels of crime. Corruption is a continuing problem.

12. POLITICAL AND LEGAL ENVIRONMENT
HISTORICAL DEVELOPMENT.
In reaction to the regime of Porfirio Díaz, the Mexican Constitution of 1917 reserved
control of land ownership and the exclusive rights to petroleum and other minerals to
the Mexican federal government. Thus, throughout most of the 20th century, Mexico has
been functioning under a constitution that severely restricts foreign investment.
Restrictions have been loosened in the 1990s, however, in preparation for and as a part
of NAFTA.
In 1973 the Law to Promote Mexican Investment and Regulate Foreign Investment (also
known as the Foreign Investment Law) was passed. It mandated that Mexican
enterprises could have a maximum of 49 percent foreign ownership. Thus, the rule
became known as the "51-49 percent rule." In 1984 the law was changed to allow
majority foreign ownership of Mexican corporations in certain industrial and tourism-
related industries. Such investment, however, was slow and cumbersome and was
permitted only with the approval, on a case-by-case basis, of the Mexican Foreign
Investment Commission (FIC).
Moving into the 21st century, the FIC continues to oversee and regulate foreign
investment in Mexico, but restrictions on investment have been eased considerably.
Under new regulations established in 1989, with the exception of specified industries,
foreign investment in Mexico in amounts less than US$100 million could proceed
without prior approval from the FIC, and those limits are being raised gradually.

13. THE MEXICAN POLITICAL AND LEGAL SYSTEMS
Mexico has a federal system of government with a national government and 31 states.
Mexico's national government, however, is far more powerful than those of the United
States and Canada.
Mexico's president plays an extremely important role in its legal system. Nearly all
federal laws in Mexico are initiated by the president, and his powers (there has been no
woman president in Mexico) are such that most laws he proposes are passed with little
or no alteration. Further, the president, as the leader of the powerful PRI (the political
party of every Mexican president elected since 1928), plays a strong role with respect to
policy and enactment of law in the various Mexican states. (PRI stands for the Partied
Revolutionaries Institutional, or Revolutionary, Institutional Party.)
The structure of Mexico's court system is similar to that in the United States. In each
state there are trial and appellate courts. The federal level includes trial courts, circuit
courts of appeal, and a Supreme Court. The Supreme Court is divided into four
"chambers" with five justices each. Each chamber handles one of four areas of law:
criminal, administrative, civil, or labor. It is important to note, however, that the role of
the courts in a civil law system such as Mexico's differs from the role of courts in a
common law system. In a civil law system, attorneys and judges look to sets of codes in
which statutes are set down as their primary source of law. In contrast, in a common
law system, attorneys and judge rely on statutes and rules of law and their
interpretation as they are set down in prior-written court opinions.

14. Legal Framework of Business in Mexico
Equity of Judgments
The Political Constitution of Mexico is the basis of the Mexican legal system. The judicial
system is a combination of constitutional theories and American civil rights, as well as
judicial revisions of different legislative statutes. Mexico accepts compulsory
jurisdiction from the International Court of Justice, but with limitations.
The Jurisdictions
Supreme Court of
Justice
It is the maximum constitutional court and head of the Federal Judicial
Power. It protects the order established by the Mexican Constitution,
keeps the balance between other powers and government domains
through its court rulings.
Electoral Court It is the maximum authority jurisdictional specialized in controlling and
solving disagreements on the federal elections, as well as actions and
resolutions that can violate political and electoral rights of the citizens.
Circuit Collegiate
Courts
It is in charge of providing direct protection against conclusive
judgments or against resolutions. It is the appeal court for judgments
already pronounced either by the district judges or the responsible of
the superior court, as well as extradition orders dictated by the
President of the Republic as a response to a petition from a foreign
government.
Circuit Unitary
Courts
It performs judgments of protection promoted against deeds from other
circuit unitary courts. It is the appeal court for issues heard on first
instance and district courts; it is the resource for a denied appeal. It
qualifies impediments, excuses and rejections from district judges; etc.
District Courts They are in charge of crimes of federal order, procedures of extradition,
authorizations to interfere in private communications, and
controversies between the application of federal law in administration,
civil or labor subjects. Also indirectly involved in resolving crime,
administrative, civil and labor issues.
Federal Judiciary
Council
Manages, supervises and disciplines the judicial course of the Judicial
Power of the Federation with the exception of the Supreme Court and
the Electoral Court. It determines the division and competence of
territories and specialization - by subject - of the Circuit Collegiate,
Circuit Unitary Courts and District Courts.

15. Technological Environment
During the last decade Mexico has moved progressively to develop and naturalize its
scientific and technological capabilities, a decision requiring long-term government
investment in education and research. The areas in which Mexico's National Council of
Science and Technology selected to focus a national development program include the
following: scholarships for middle- as well as high-level researchers and technicians;
indicative programs to support research and basic or new industries in fields such as
energy, electronics, metalworking, and agronomy; a government-industry shared risk
program; research centers, many located in the provinces; and international scientific
agreements. The translation of scientific classics and contemporary publications into
Spanish and their widespread dissemination in Mexico have received special attention
as has the dissemination of Mexico's work worldwide.
Innovations in science and technology act as engines for long-term development, and
they are essential ingredients for the progress of any nation.
 The LANGEBIO Center has developed technology that helps increase food
production. With this technology, the seed of different products will improve to
make them more resistant to drought, frost, pests and diseases.
 The Large Millimeter Telescope is the world’s largest and most sensitive single-
aperture telescope in its frequency range and has contributed to the
development of the nearby population.
 The partnership between the Missouri Plant Science Center and Reliv is a rare
opportunity for some of the nation’s leading biotech researchers to develop
innovative plant-based ingredients. This is a sure way for Mexico to up its
economy.
Mexico searches for opportunities to encourage the youth of the nation to observe
scientific research as a fertile field of opportunity which can benefit Mexican society.
Certain forecasts estimate that Mexico’s IT spending is forecast to grow at a
compounded annual growth rate of 11 per cent over 2011-2015.
Historic Perspective
Science and technology have a long history in Mexico. Ancient Mexican civilizations
developed mathematics, astronomy, and calendrics, and solved technological problems
of water management for agriculture and flood control in Central Mexico. Following the
Spanish conquest in 1521, New Spain (colonial Mexico) was brought into the European
sphere of science and technology. The Royal and Pontifical University of Mexico,
established in 1551, was a hub of intellectual and religious development in colonial
Mexico for over a century. During the Spanish American Enlightenment in Mexico, the
colony made considerable progress in science, but following the war of independence
and political instability in the early nineteenth century, progress stalled. During late
19th century under the regime of Porfirio Díaz, the process of industrialization began in
Mexico. Following the Mexican Revolution, a ten-year civil war, Mexico made significant
progress in science and technology. During the 20th century, new universities, such as
the National Polytecnical Institute Monterrey Institute of Technology and research
institutes, such as those at the National Autonomous University of Mexico were
established in Mexico.
According to the World Bank, Mexico is Latin America's largest exporter of high-
technology goods (High-technology exports are manufactured goods that involve high

16. R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments,
and electrical machinery) with $40.7 billion worth of high-technology goods exports in
2012. Mexican high-technology exports accounted for 17% of all manufactured goods in
the country in 2012 according to the World Bank.
Innovation Index
The Global Innovation Index (GII) is an annual ranking of countries by their capacity for,
and success in, innovation. It is published by Cornell University, INSEAD, and the World
Intellectual Property Organization in partnership with other organizations and
institutions, and is based on both subjective and objective data derived from several
sources, including the International Telecommunication Union, the World Bank and the
World Economic Forum
Mexico is positioned in the 57th place in the Global Innovation Index 2015, made by the
University of Cornell, which means ranking nine places above compared to last year
when the country ranked the 66th position. The Global Innovation Index is developed by
the University of Cornell; the INSEAD business school and the World Intellectual
Property Organization (WIPO). The study examines the effective innovation policies for
the development that expose new methods that can be applied to encourage innovation
and promote growth.

17. This very complicated index is based on six pillars (Institutions, human and capital
research, infrastructure, market sophistication, business sophistication, knowledge and
technological outputs and creative outputs.), each with sub-pillars, and a total of 84
indicators. Of the 134 countries analyzed in 2012, Mexico ranked 79th, way behind
Chile (39th) also lagging behind Brazil (59th) and Argentina (70th), but way ahead of
Venezuela (118th). This complex index’s rankings are different from but generally align
with the two other indices: Finland (4th), Singapore (3rd), USA (10th), Switzerland
(1st), Canada (12th), Russia (51st), Israel (17th), China (34th) and Indonesia (100th).

18. DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING
Doing Business presents results for two aggregate measures: the distance to frontier
score and the ease of doing business ranking, which is based on the distance to frontier
score. The ease of doing business ranking compares economies with one another; the
distance to frontier score benchmarks economies with respect to regulatory best
practice, showing the absolute distance to the best performance on each Doing Business
indicator. When compared across years, the distance to frontier score shows how much
the regulatory environment for local entrepreneurs in an economy has changed over
time in absolute terms, while the ease of doing business ranking can show only how
much the regulatory environment has changed relative to that in other economies.
Ease of Doing Business ranking
The ease of doing business ranking ranges from 1 to 190. The ranking of economies is
determined by sorting the aggregate distance to frontier scores, rounded to 2 decimals.

19. Economy City Weight
Doing Business 2016 uses a simple method to calculate which economies improved the
ease of doing business the most. First, it selects the economies that in 2014/15
implemented regulatory reforms making it easier to do business in 3 or more of the 10
topics included in this year’s aggregate distance to frontier score. Changes making it
more difficult to do business are subtracted from the total number of those making it
easier to do business. Twenty-four economies meet this criterion: Armenia; Azerbaijan;
Benin; Costa Rica; Côte d’Ivoire; Cyprus; Hong Kong SAR, China; Indonesia; Jamaica;
Kazakhstan; Kenya; Lithuania; Madagascar; Mauritania; Morocco; Romania; the Russian
Federation; Rwanda; Senegal; Togo; Uganda; the United Arab Emirates; Uzbekistan; and
Vietnam. Second, Doing Business sorts these economies on the increase in their distance
to frontier score from the previous year using comparable data.
Selecting the economies that implemented regulatory reforms in at least three topics
and had the biggest improvements in their distance to frontier scores is intended to
highlight economies with ongoing, broad-based reform programs. The improvement in
the distance to frontier score is used to identify the top improvers because this allows a
focus on the absolute improvement—in contrast with the relative improvement shown
by a change in rankings—that economies have made in their regulatory environment
for business.

24. Global CompetitivenessIndex
Situation and competitiveness challenges for the Mexican economy
 The Mexican economy has a long way to go if it is to improve its competitiveness
worldwide.
 The Mexican economy’s competiveness, measured by the World Economic
Forum’s GCI came 55th out of 148 countries in the world in 2013.
 In the region, Mexico is better positioned in the competitiveness indexes than
other countries in Latin America; in fact it beats the nations in the BRICS group:
(Brazil, Russia, India, China and South Africa).
 Mexico faces major challenges if it is to improve its competitiveness
internationally and, as a consequence of that, increase its development and
economic growth. The recently passed structural reforms smooth the way to
reaching this goal.

25. The BCG Global Manufacturing Cost-Competitiveness Index measures changes in direct
manufacturing costs from 2004 to 2014 among the world’s top 25 exporting economies.
The index develops competitiveness scores based on manufacturing wages,
productivity, energy costs, and currency exchange rates compared with the U.S. dollar.
The U.S. serves as the benchmark for both 2004 and 2014, with a score of 100. If a
country has a score of 110, for example, that means its direct manufacturing costs are
10 percent higher than those of the U.S. This interactive allows you to see how the
manufacturing cost structure of each economy in the index has changed relative to
those of the other 24 over the last ten years.

26. Begin by clicking the tab for either 2004 or 2014. Then select the economy you wish to
study on the drop-down list. If you select Germany 2004, for example, you will see
Germany’s costs compared with the others in the index that year. You will also see some
of the main components of those costs—wages adjusted for productivity, natural gas,
and electricity. Switch to 2014, and you will see how Germany’s cost position has
changed.
 Some economies long considered low cost—including Brazil, China, Poland, and
Russia—have seen their competitiveness erode significantly over the past decade.
 Some countries that already had high costs, such as Australia, Belgium, and France,
have seen costs rise even more.
 India, Indonesia, the Netherlands, and the UK have held their cost competitiveness
relatively steady since 2004 compared with the U.S. and have emerged as low-cost
manufacturing economies in their regions.
 Mexico and the U.S. have improved their competitiveness against all other
economies in the index. We call these two nations the “rising global stars” of
manufacturing.
Conclusion
HDI, Innovation Index, and Happiness Index - These three indices appear to tell us that
Mexico is relatively weak when it comes to innovativeness. Mexico, along with Brazil and
India, appears to lag behind other major emerging economies such as China, Russia,
South Africa and Thailand. This is a bit surprising considering that Mexico is a world
leader in the export of smart phones, flat panel TVs, automobiles and appliances.
Apparently these exports are manufactured in Mexico but the innovations that go into
their designs mostly come from elsewhere.
Though Mexico is graduating thousands of engineers and science majors, these are
either not yet innovating or are finding employment in other countries. If Mexico is to
compete in future world trade, it would do well to take steps now to improve its
innovativeness.
With this outlook it is essential to strengthen and improve various areas of opportunity
in the Mexican economy. It is important to increase competitiveness, raise productivity,
reduce informality, cut insecurity, improve the labor market, implement good quality
education, encourage innovation, research and scientific and technological development
and protect the environment. Only then will Mexico become more competitive and
achieve a greater level of development as well as sustained, and sustainable, growth.

27. References:
http://www.geographia.com/mexico/
http://reports.weforum.org/global-competitiveness-report-2015-
2016/economies/
http://www.doingbusiness.org/rankings
http://www.tradingeconomics.com/mexico/competitiveness-index