This chapter provides an assessment of Mexico. It begins with an overview of Mexico’s context and subsequently analyses Mexico’s progress across eight measurable dimensions. The chapter concludes with targeted policy recommendations.
SME Policy Index: Latin America and the Caribbean 2024
Towards an Inclusive, Resilient, and Sustainable Recovery
SME Policy Index
18. Mexico
Abstract
Overview
Figure 18.1. 2024 SME PI Mexico's score
Note: LAC average 2024 refers to the simple average of the 9 countries studied in this 2024 report. There is no data for the Digitalisation dimension in 2019 as the 2019 report did not include this dimension.
Mexico continues to stand out as a top performer in the SME Policy Index (SME PI) assessment, outperforming the LA9 average across seven of the eight dimensions. However, significant changes have occurred since the 2019 SME Policy Index due to a shift in policy direction under the 2018-2024 administration. The SME policy mandate still falls under the Secretaría de Economía (Secretary of Economy, SE), but the previously established SME agency, Instituto Nacional del Emprendedor (National Institute for the Entrepreneur, INADEM), created in 2013, has been dissolved. In its place, the Unidad de Desarrollo Productivo, established in October 2019, now assumes its role with a different mandate.
Overall, the new administration, which will begin its mandate in October 2024 directly following the launch of this assessment, can count on a robust institutional framework. This provides an important opportunity to review the impact of the changes in SME policy introduced since 2019 in terms of policy effectiveness and the capacity to reach the targets set in the National Development Plan (2019-2024) and the Programa Sectorial de Economia 2020-2024 (Economic Sectoral Programme, PROSECO). By doing so, the administration can continue strengthening the country’s strategy on this basis, drawing from the experiences and good practices of the other LA9 countries.
Context
The Mexican economy has exhibited a real GDP average annual growth rate of 2% over the past 30 years. It is the second-largest economy in Latin America, and among the top 15 globally (World Bank, 2022[1]). Despite a 5.8% growth in 2021 following an 8.7% contraction in 2020, the economy slowed to 3.9% in 2022, with services consumption and investment trailing behind despite the growth in non-durable goods consumption (OECD, 2024[2]). Resilient consumption, driven by real wage gains, employment, and lower household savings rates, supported a 3.2% growth in 2023, aided by positive investment performance, particularly in public investment and imported machinery and equipment. The economy is projected to expand by 2.2% in 2024 and 2.0% in 2025 (OECD, 2024[3]).
Headline inflation has eased, and core inflation, while displaying more persistence, has also gradually decreased, albeit with services inflation remaining high. The robust appreciation of the peso has played a role in containing inflation (OECD, 2024[4]).
According to the Encuesta Nacional de Empleo y Ocupación (National Employment Survey, ENEO), the unemployment rate decreased to 3.3% in 2022 after reaching 4.1% in 2021. In 2023, unemployment slightly dropped to 2.8% (OECD, 2023[5]), while informality increased to 54.7% of the employed population, a 0.2% rise from 2022 (INEGI, 2023[6]). SMEs, constituting 52% of GDP, were impacted, with 400,000 SMEs permanently closing after the pandemic (INEGI, 2021[7]). Government support was limited, with only 7% of SMEs accessing government support, contrasting with the OECD country average of 33.6% (OECD, 2021[8]).
SMEs play a vital role in the Mexican economy, accounting for 99.7% of firms and 35.6% of total national production (INEGI, 2019[9]). However, productivity challenges persist, with the sector responsible for 71% of employment and 37% of value-added, lagging behind the OECD average (OECD, 2021[8]). Less than 10% of SMEs export, and only 2% invest in innovation (OECD, 2022[10]).
Dimension 1. Institutional Framework
Mexico has established a well-structured institutional framework for SME policy, earning a dimension score of 4.19. However, changes implemented after 2019 have constrained the country's capacity for SME policy implementation, leading to a relative reduction in resources available for SME support. High levels of labour and enterprise informality remain significant challenges for achieving an inclusive and balanced SME policy.
The SME definition in Mexico, scored 4.33, is outlined in the Law for the Development of Competitiveness of Micro, Small and Medium-Sized Enterprises, approved in 2009, and the Operational Regulation of the National Entrepreneurship Fund introduced in 2013. This definition relies on two parameters: employment and annual turnover, differentiated by the type of activity (trade, services, and industry). It is consistently adopted across the public administration.
Significant changes have occurred since the 2019 SME Policy Index due to a shift in policy direction by the 2018-2024 administration. The SME policy mandate still falls under the SE, but the previously SME agency, INADEM, established in 2013, has been dissolved. The Unidad de Desarrollo Productivo, established in October 2019, now assumes its role with a different mandate.
Strategic guidelines for SMEs are included in the National Development Plan 2019-2024 and the PROSECO coordinated by the Secretaría de Economía (2020-2024). These plans reflect a shift from promoting entrepreneurship and micro-enterprises to supporting high-impact, high-growth, and innovative firms. In parallel, under the umbrella of this policy, the SE, facilitated by the Dirección General de Desarrollo Productivo (General Directorate for Productive Development, DGDP), functions as a coordinating entity with both public and private entities to initiate actions aimed at benefiting SMEs. These actions are structured around four key axes: institutional, digital, financial, and commercial inclusion.
The Unidad de Desarrollo Productivo is responsible for policy implementation, and funds are channelled through the Entrepreneurship Fund managed by the SE. While decentralisation efforts involve local administration, chambers of commerce, sectorial organisations, and NGOs, the shift from in-person services to online platforms like Plataforma MIPYMES MX that provide training courses at no charge, video information, and online consultancy services, has led to a reduction in the spend allocated to SME development. Mexico scores 4.09 in the Strategic Planning, Policy Design, and Coordination dimension, reflecting the ongoing changes in the policy landscape.
Furthermore, Mexico has a well-advanced system of Public-Private Consultations (PPCs) as reflected in its 4.60 score, the highest in the region, operating at various levels. Public consultations are conducted before issuing regulations affecting economic or social activity. The Consejo Nacional para la Competitividad de la Micro, Pequeña y Mediana Empresa (National Council for the Competitiveness of Micro, Small and Medium-Sized Enterprises, CNCMIPYME) and the Comisión Nacional de Mejora Regulatoria (National Commission for Regulatory Improvement, CONAMER) serve as major channels for PPCs, ensuring participation from diverse stakeholders. Convocations are usually published on portals such as the one of the Comisión Federal de Competencia Económica (Federal Economic Competition Commission, COFECE), which also report the results of the consultations.
On another note, in the Measures to Tackle Informal Economy sub-dimension, Mexico scores 3.86. The country faces a large informal sector, estimated at 55% of the labour force, and efforts to combat labour and enterprise informality include programmes like Crezcamos Juntos and the Jornadas De la mano con tu negocio, fiscal incentives such as the Régimen de Incorporación Fiscal (Tax Incorporation Regime, RIF) and the Régimen Simplificado de Confianza (Simplified Trust Regime, RESICO). However, there is currently no overall strategy or coordination for addressing informality.
The way forward
Conduct a review of the impact of the changes in the institutional framework for SME policy introduced since 2019 in terms of policy effectiveness and the capacity to reach the targets set in the National Development Plan (2019-2024) and PROSECO.
Ensure that the contribution of the SME sector to reaching national development objectives is adequately considered and involve SME representatives in the consultation process for the elaboration of the new National Development Plan, assigning a specific consultative role to the CNCMIPYME.
Conduct an evaluation of the measures introduced thus far to reduce labour and enterprise informality. Consider the elaboration of a comprehensive strategy for informality reduction within the framework of the new National Development Plan.
Dimension 2. Operational environment and simplification of procedures
Mexico has a longstanding practice of conducting legislative reviews and regulatory reforms, establishing the CONAMER in 2018 to coordinate and monitor regulatory reform efforts. While progress has been uneven, Mexico remains one of the best-ranked countries in the overall dimension with a score of 3.83, excelling in Legislative Simplification and Regulatory Impact Analysis (3.90), E-government (4.77), Company Registration (3.90), and Ease of filing taxes (2.90).
Mexico initiated its regulatory reform process in the late 90s, intensifying after joining the OECD. CONAMER, initially Comisión Federal De Mejora Regulatoria, played a crucial role after the General Law on Regulatory Improvement in 2000. A new regulatory reform plan, Estrategia Nacional de Mejora Regulatoria (National Strategy for Regulatory Improvement, ENMR), was launched in 2019, referencing the Ley General de Mejora Regulatoria (General Law on Regulatory Improvement, LGMR). Regulatory Impact Analysis (RIA) has been systematically applied, though an RIA SME test is yet to be implemented, monitored by CONAMER. The Starting a business process is relatively complex and costly.
Mexico has established a One-Stop-Shop (OSS) network, facilitating simultaneous registration with the company register and tax administration. Despite the generation of several numbers from the company registration procedures, such as Registro Federal de Contribuyentes (Federal Taxpayers Registry, RFC), Registro Público de Comercio (Public Register of Commerce, RPC), and Número de Registro Patronal (Employer Registration Number), the tax registration number is employed for company identification across all public administration entities. The RPC is managed by the SE, specifically the Directorate General for Trade Regulations, with recent improvements in the registry's functions. Online registration is available through the TuEmpresa platform.
However, the tax regime for SMEs in Mexico is relatively complex, involving numerous taxes and time-consuming filing and payment procedures. Significant challenges include the time required for tax-filing and payment procedures, amounting to 241 hours per year, exceeding the OECD average of 158.8 hours. Additionally, the corporate tax rate, other taxes, and social contributions on total profits are high in Mexico, reaching 51.1%, compared to the OECD average of 39.9%.
To address these challenges, the Servicio de Administración Tributaria (Tax Administration Authority, SAT) introduced the RESICO to simplify tax-filing procedures for individual entrepreneurs and small-scale enterprises. The simplified regime applies to individual entrepreneurs (personas físicas con actividad empresarial) with an annual turnover of less than 3.5 million pesos, with variations depending on the economic activity, up to 35 million pesos. Entities under this regime are subject to a tax ranging from 1% to 2.5% of the total annual turnover, without allowing expense deductions. This regime is estimated to significantly reduce the tax burden on individual entrepreneurs and small-scale enterprises, potentially contributing to a reduction in informality.
Regarding digitalisation, significant progress has been made in developing e-government services. A new Estrategia Digital Nacional de México for 2021-2024 aims to further expand digital government tools, enhance digital security, reduce the digital divide, and achieve connectivity for small communities located in remote areas. The platform MIPYMES MX, managed by the SE, is designed to support SME digital transformation and improve access to e-government services.
The way forward
Proceed with the implementation of the ENMR, with a specific focus on areas that were relatively neglected in previous regulatory reform phases.
Consider applying an SME Test to complement RIA applications and evaluate the impact of new laws and regulations on different types of SMEs.
Company registration procedures can be further simplified. Promote online registration through the TuEmpresa platform, particularly among informal micro-enterprises.
Dimension 3. Access to finance
Mexico scores 3.28 in the Access to finance dimension, slightly above the regional average, and 2.95 in the Legal, Regulatory and Institutional Framework sub-dimension. Regulatory and institutional development in the registration of tangible and intangible assets, with an accessible online cadastre and a public registry of security rights over movable assets, stands out. However, movable assets are only accepted as collateral by some banks or large borrowers. In terms of access to finance, the country has government provisions on the stock market, specific regulation for the SME capital market and a strategy that allows companies to adopt a less demanding corporate form. Despite this, there is no separate market for small-cap SMEs, and the high percentage of collateral required for medium-term loans is the highest among the countries assessed.
Mexico obtains an outstanding score of 4.51 in the sub-dimension of Diversified sources of enterprise finance. First, the Banco Nacional de Comercio Exterior (National Foreign Trade Bank) offers various credit schemes, guarantees and technical assistance for SMEs involved in foreign exchange generating activities. In addition, government entities such as the Fondo Nacional de Garantías (National Guarantee Fund, FONAGA), Fideicomisos Instituidos en Relación con la Agricultura (Trusts related to agriculture, FIRA) and Nacional Financiera (National Finance, NAFIN) provide guarantee coverage services to facilitate access to credit for firms with limited collateral. Second, microfinance institutions, regulated by the Comisión Nacional Bancaria y de Valores (National Banking and Securities Commission, CNBV) and the Comisión Nacional para la Protección y Defensa de Usuarios de Servicios Financieros (National Commission for the Protection and Defence of Users of Financial Services, CONDUSEF), are present in all regional markets in Mexico. Finally, Mexico excels in alternative sources of financing, with a robust market of asset-based lending (ABL) tools, recognised and regulated by CNBV and CONDUSEF. The Law to Regulate Financial Technology Institutions, in force since 2018, has fostered an enabling environment for the entry of new providers of digital financial products, specifically payment aggregators and crowdfunding institutions, with 7622 platforms authorised by the CNBV, 5219 of which are currently operational.
Mexico has focused its National Financial Education Strategy (NFES) on SMEs, obtaining a score of 3.15 in the Financial Education sub-dimension in this area. The National Banking and Securities Commission (CNBV) conducts the National Survey on Financial Inclusion in collaboration with the National Institute of Statistics and Geography (INEGI), including questions on financial education. This survey identifies business financial planning practices, such as sales forecasting, long-term goal setting and debt management. These results are part of the monitoring system of the National Financial Inclusion Policy (NFIP). Mexico also participated in an assessment of SME financial capabilities developed by the OECD in 2021.
Mexico's NFES focuses on strengthening the financial capabilities of SMEs and entrepreneurs. Efforts are directed towards the promotion of mechanisms that allow better business management, the use of financial products to increase productivity and the inclusion in the digital payment system. In addition, specific guidance programmes are designed for SMEs, providing information on the risks and opportunities of alternative financial products. The implementation of these policies requires a consensual and articulated strategy between public and private institutions. According to the responses obtained for this assessment, the SE is currently developing guidelines to form a working group to promote the financial inclusion of SMEs, which will include financial regulators and representatives of public and private financial institutions.
Finally, Mexico scores 2.52 in the sub-dimension of Efficient procedures for dealing with bankruptcy. This is due to a regulatory framework with universally applicable laws, based on internationally accepted principles, also applicable to state-owned enterprises. In addition, there is an early warning system for insolvency situations and the option of out-of-court settlements that are less onerous than bankruptcy.
However, Mexico does not set a maximum time limit for insolvency and lacks a system for automatic removal of insolvency information from public records after this period. Nor does it offer capacity building programmes for entrepreneurs whose initial projects failed. It does, however, have regulations for secured transactions, allowing for the recovery of assets after a business reorganisation, the prioritisation of payments in the event of liquidation and the option to split tax debts.
The way forward
Revise downwards the weighting of collateral for medium-term loans to SMEs.
Promote regulation and institutions so that movable assets are accepted as collateral by the entire financial system.
Promote a separate securities section or market for small-cap SMEs.
Improve coordination between the different financial education initiatives of private institutions in order to avoid duplication, as well as strengthen the current system of follow-up, monitoring, and evaluation of the NFES.
Develop specialised information and training mechanisms for entrepreneurs who went bankrupt in their projects.
Create an automatic mechanism that removes companies and individuals from the official bankruptcy and insolvency registers when the situation is resolved, in line with international best practices.
Establish maximum time limits for insolvency (international experience indicates that up to 3 years is a good length of time for such proceedings).
Dimension 4. SME development services and public procurement
With a score of 4.16, Mexico performs above the regional average in this dimension. Furthermore, Mexico has seen its performance decrease compared with the 2019 edition, where the country obtained a total score of 4.21. The area with the highest performance in this assessment is public procurement, with 4.20, followed by business development services at 4.16 and entrepreneurial development services at 4.14.
Since the last assessment, Mexico has witnessed an important reorientation of economic policy, and SME policy and support services for SMEs and entrepreneurs are not the exception. Key developments include the dissolution of INADEM, which was a stand-alone agency in charge of the implementation of SME and entrepreneurship policies. In the current context, SME policy development remains the responsibility of the SE while implementation is under the mandate of the SE’s Unidad de Desarrollo Productivo (see Dimension 1. Institutional Framework).
The provision of BDS is framed by the Reglamento Interior de la Secretaría de Economía (Internal Regulations of the Ministry of Economy, RISE), which is the internal regulation of the SE and establishes the organisation and functions of the Ministry or Secretariat, including its support to SMEs. The RISE, as such, is not the government’s national economic development strategy or development plan, but rather a strategic institutional document for the SE. This contrasts with the findings of the 2019 edition of the SME PI, which showed a clear (albeit broad and lacking in detail) link to Mexico’s National Development Plan through an SE Innovation and Development Programme. According to the responses to this assessment, the RISE is not based on a thorough analysis of the needs and demands for BDS by SMEs in the country and does not identify quantitative objectives in this area.
The government’s national policy for SMEs for 2020-2022 states to pursue a more equitable development and the exploitation of strategic market opportunities, with the aim of revitalising the economy from the perspective of social inclusion. The policy intends to take into account the fact that the Mexican business structure is characterised by a high concentration of small businesses that face a number of challenges that limit their potential for development and growth, especially access to training courses and workshops. Based on that general diagnostic, the flagship initiatives in terms of BDS include a free, virtual self-training platform (MIPYMES MX) and the live streaming of digital workshops for entrepreneurs and SMEs on topics related to business development and digitalisation. Services also include free, in-person, and virtual training programmes targeted at specific populations (women, youth, the artisanal and rural community, and the agro-industrial sector) or that focus on priority topics (business and financial skills, formalisation, digitalisation, e-commerce, exporting, and others) for SMEs and entrepreneurs. However, no programmes are specifically addressed at high potential and high-growth and innovative SMEs and entrepreneurs.
In terms of entrepreneurial development services, the government has created a registry called the Padrón de Desarrolladoras de Capacidades Empresariales (Entrepreneurial Capacity Developers, PADCE) to facilitate access to specialised business development services for entrepreneurs and SMEs. The PADCE is designed to help entrepreneurs and SMEs strengthen their business and digital skills and capabilities in order to increase their competitiveness and growth prospects. The PADCE is open to a variety of institutions, including accelerators, incubators, universities, foundations, and consulting firms. To be included in the PADCE, institutions must meet a set of requirements, including having a proven track record of providing quality business development services.
The public procurement system in Mexico is governed by the Ley de Adquisiciones, Arrendamientos y Servicios del Sector Público (Law on Public Sector Procurement, Leasing and Services, LAASSP). The LAASSP establishes the principles and procedures for the acquisition of goods, services, and works by federal government entities. As reflected in the 2019 SME PI, the LAASSP does not mandate a requirement to split tenders above a certain monetary value into lots; the possibility to split tenders into lots; the possibility to form consortia or joint bids; and/or quotas for SME participation. On the other hand, the Law specifies that payments for contracts will not exceed 20 days from the moment of the issuance of an invoice, and the effective delivery of the goods or services under the terms of the contract.
The electronic procurement system in Mexico for the Federal Authorities is called CompraNet and includes a registry of suppliers that are qualified to do business with federal government entities.
The way forward
Moving forward, Mexico could implement a set of recommendations to improve its performance in this dimension and, more importantly, enhance the policies and programmes for SME support, including by:
Reinstating an explicit link between the provision of business development services and services for entrepreneurs and the national development plans, beyond the narrower strategic orientations of a specific body of the government.
In this regard, Mexico could develop a full-fledged SME development strategy based on solid diagnostics and including concrete action plans, targets, expected outcomes and impact. This would also contribute to re-establishing a higher profile or standing to SME policy in the country.
A greater emphasis on programmes and initiatives to support high potential, high growth, and innovative SMEs and entrepreneurs. This emphasis is not in conflict or at the expense of the government’s goal to prioritise social outcomes over purely economic ones.
A stronger use of public procurement as a tool to foster SMEs and entrepreneurship across the country, including by introducing regulations to facilitate the participation of small firms in this important market and to increase the access to information on procurement opportunities and trainings on how to participate in procurement processes, including through CompraNet.
Dimension 5. Innovation and technology
Mexico has an overall score of 4.14 in the Innovation and Technology dimension, which is bolstered by the regular monitoring and evaluation of innovation support activities. Mexico’s innovation policy is coordinated by the Consejo Nacional de Humanidades, Ciencias y Tecnologías (National Council for Humanities, Science and Technology, CONAHCYT), which also operates a number of innovation support programmes. Mexico’s National Innovation Plan (PNI) places a particular focus on the sectors of health, energy, and human security. It also seeks to stimulate the creation of university spinouts through efforts to streamline regulatory and legal procedures, although the overall emphasis on SME innovation throughout the strategy could be greater. These factors feed into a score of 4.02 in the Institutional Framework sub-dimension.
Mexico has the highest score (4.37) in the LAC region within the Support Services sub-dimension. There are large numbers of incubators, accelerators, technology transfer offices, innovation centres and science and technology parks in Mexico. Prominent examples include the Parque de Investigación e Innovación Tecnológica (Research and Technological Innovation Park, PIIT) in the municipality of Apodaca, and the Yucatan Science and Technology Park, which both offer a range of supports to innovative businesses. In addition to hosting its own research centres, CONAHCYT supports other initiatives that foster linkages between SMEs and research institutions, through the provision of technical support, training, coordination with business chambers, and dissemination of information.
Financial supports for SME innovation are slightly less extensive in Mexico. The main financial support available is the Estímulo Fiscal a la Investigación y Desarrollo de Tecnología (Tax Stimulus for Research and Technology Development, EFIDT), which is coordinated by CONAHCYT. This scheme provides a tax credit to selected R&D projects, which allows the company to deduct 30% of the R&D expenses from their income tax. The tax credits are available to companies of all sizes that have been carrying out R&D for at least 3 years and are not a bNFESiciary of another CONACYT programme. Mexico’s score of 4.04 in the Financing for Innovation sub-dimension is constrained by the absence of more direct financial support for SME innovation, which could take the form of grants or innovation vouchers.
The way forward
Looking ahead, Mexico could consider:
Developing further financial support for SME innovation, such as innovation vouchers for selected technological investments or public procurement for innovation initiatives.
Introducing a pillar or section on SME innovation within its innovation strategy, to ensure a cohesive and comprehensive support offering for SMEs can be provided.
Dimension 6. Productive transformation
Mexico achieves an overall score of 4.19, surpassing the regional average, primarily due to the generally well-developed nature of its strategies to enhance productivity. However, its overall score is diminished by low ratings in the measures to improve productive associations sub-dimension, highlighting a significant area for improvement. At the time of this assessment, the PROSECO includes, among its four priority objectives, the promotion of the creation and consolidation of productive SMEs for greater productive inclusion. In addition to this, the Programa Especial para la Productividad y Competitividad (Special Programme for Productivity and Competitiveness, PEPC) 2020-2024, derived from the National Development Plan and based on Article 5 of the Ley para Impulsar el Incremento Sostenido de la Productividad y la Competitividad de la Economía Nacional (Law to Promote Sustained Growth in the Productivity and Competitiveness of the National Economy, LIISPCEN), functions as a tool to enhance the medium- and long-term capabilities of individuals and businesses in Mexico. The programme comprises five priority objectives, specific actions supporting the implementation of outlined strategies, indicating the responsible department or entity for execution, and well-being goals to monitor programme objectives. Furthermore, in accordance with Article 19 of the LIISPCEN, the Secretariat of Finance and Public Credit (HACIENDA) submits semi-annual reports to the Congress of the Union, providing updates and results on this national policy, which are available to the public. In addition, the Law for the Development of the Competitiveness of Micro, Small and Medium-Sized Enterprises promote the creation of SMEs and the support for the viability, productivity, competitiveness, and sustainability. Mexico scores 4.33 in the Productivity-Enhancing Measures sub-dimension.
At the time of the 2019 assessment, INADEM managed various calls for SME associativity. Although INADEM did not establish specific outcome indicators for this set of calls, publicly available indicators related to productivity reflected highly positive results, particularly in the increase of total factor productivity and growth in the value of fixed assets. However, with the dissolution of INADEM, as presented in the Dimension 1. Institutional Framework priority has shifted to the strategic public enterprise. This has transferred the responsibility for measures to improve productive associations to the SE, and state laws promoting these efforts. As a result, it receives a score of 4.08 in this sub-dimension, slightly below the LA9 average.
Mexico's overall score is significantly bolstered by its performance in the integration into global value chains sub-dimension, where the country distinguishes itself among the LA9 countries through well-coordinated initiatives concentrated on the MIPYMES.MX platform. This platform features specific sections dedicated to capacity building and exporting, including the ExportaMX platform, which guides the export decisions of Mexican SMEs aiming to integrate into global value chains. Notable efforts in this domain encompass the Impulso T-MEC programme, executed in collaboration with the Banco Nacional de Comercio Exterior (National Bank for Foreign Trade, BANCOMEXT). This programme provides support to SMEs connected to value chains in strategic sectors with export potential, aiming to enhance their productive capacities in the renewed North American Trade Agreement (T-MEC). Another example is the Jornadas de la mano con tu negocio, workshops, which offer training, procedural advice, and networking opportunities to integrate SMEs into regional value and supply chains. These workshops facilitate face-to-face business appointments with purchasing companies. Similarly, the Partnering in Business with Germany Programme, previously known as "Fit for Partnership with Germany," aims to enhance export opportunities for Mexican companies by connecting them with German importing companies. These strategic actions align with PROSECO's objective 3, aiming for greater productive inclusion, and result in a notable score of 4.28 in this sub-dimension.
The way forward
Establish clear initiatives aimed at enhancing productive associations, incorporating time-bound objectives and measurable indicators to ensure effectiveness.
Enhance the effectiveness of the MIPYMES.MX platform as a comprehensive source of information for productive transformation measures.
Dimension 7. Access to market and internationalisation of SMEs
Mexico obtains a score of 4.42 in the Access to market and internationalisation dimension, mainly highlighting an improvement in the sub-dimension of addressing the benefits of integration in Latin America and the Caribbean (LAC), with respect to the 2019 edition.
Regarding the sub-dimension of policies and programmes to support internationalisation, Mexico showed a good performance, obtaining a score of 4.73. Following the disappearance of ProMéxico and INADEM, their functions and programmes have been taken over directly by the SE. The Undersecretariat of Foreign Trade, in particular, is responsible for the negotiation, administration and defence of international trade and investment treaties and agreements, as well as for establishing policies and measures to facilitate foreign trade. These actions are part of PROSECO, which, in terms of internationalisation, seeks to diversify the destination markets for Mexican exports to reduce vulnerability and take advantage of new trade opportunities.
On the other hand, the Comisión Mixta para la Promoción de las Exportaciones (Joint Commission for the Promotion of Exports, COMPEX) plays a crucial role in analysing, evaluating, proposing, and coordinating actions between the public and private sectors in the area of foreign trade in goods and services. This commission is composed of various governmental entities and agencies such as the BANCOMEXT and NAFIN. The SE also offers the National Foreign Trade Information Service (SNICE), which provides tools, programmes, regulations, and guides to support the export and internationalisation process of Mexican SMEs.
In addition, programmes such as the Manufacturing, Maquiladora and Export Services Industry Programme (IMMEX), which allows companies to import goods temporarily and defer the payment of taxes, and "Partnering in Business with Germany", the bilateral cooperation programme between the Ministry of Economy and the Federal Ministry of Economics and Climate Protection, which is established as a bridge of opportunities by fostering solid and strategic business partnerships. Over more than 10 years, leaders of Mexican SMEs with foreign trade potential are prepared to explore new markets through direct business contacts. In early 2024, the programme launched the "Women in Business" edition to align with the objectives of the SME Impulse Policy, which highlights the role of women in the economy and the contribution of women-led SMEs to employment. This edition is the first call exclusively for women and aims to create a space where they can share their experiences while learning from each other.
In terms of trade facilitation, Mexico scored 3.83. In January 2021, it established the National Trade Facilitation Committee to comply with the requirements of the WTO Trade Facilitation Agreement (TFA), following negotiations between 2014 and 2017. This Committee proposes actions to reduce formalities, procedures and requirements, lowering trade costs.
The SE, in collaboration with ConnectAmericas and the IADB, launched ComerciaMx, a digital platform that helps companies, especially SMEs, to expand internationally. It facilitates interaction with customers, suppliers, partners, and investors, addressing the barriers that companies face when seeking to expand globally: access to reliable contacts, information on international trade, financing, and training. It offers access to foreign trade regulations, financing programmes, business guides, training courses and self-diagnostic tools.
The SE also implements MujerExportaMx, a training programme to strengthen and support all MSMEs led by women in their export process, in collaboration with the IADB, provides a platform to carry out a virtual business roundtable that allows these MSMEs to access international markets.
The Ventanilla Única de Comercio Exterior Mexicano (Mexican Foreign Trade One-Stop Shop, VUCEM) is a government electronic system to streamline procedures related to foreign trade. It simplifies customs processes, promoting competitiveness. By 2023, it has accumulated more than 300 thousand certificates of origin, more than 200 thousand digitised documents and more than 17 thousand registered applications. In addition, the SAT offers certifications as Authorised Economic Operator (AEO), with more than a thousand companies certified by 2023. On the other hand, Mexico outperforms the average for LAC in all variables of the OECD Trade Facilitation Indicators (TFI), standing out in availability of information and fees and charges.
Mexico scores 4.26 in the e-commerce sub-dimension. This result is due to the strategies and agreements implemented to boost e-commerce, such as the Mexican e-commerce standard (NMX-COE-001-SCFI-2018), which contains provisions to which persons offering, marketing, or selling goods, products or services using electronic, optical or any other technology shall be subject. Although it does not have a comprehensive cybersecurity law, the country has a Basic Cybersecurity Manual for SMEs issued by CERT Mexico, as well as various laws and bodies that address cybersecurity, including the Inter-Ministerial Commission on Information and Communication Technologies (ICT) and Information Security.
Platforms such as MIPYMES MX provide tools, content, and training for the development of digital business skills. BANCOMEXT offers financing and training for digitalisation and e-commerce projects. The e-commerce market in Mexico reached USD 26.2 billion in 2022, with a 23% growth compared to the previous year. In addition, there are 63 million e-commerce users in the country. Social media has a significant influence on online shopping. Initiatives such as the Free Trade Agreement between Mexico and Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, the Mexico-Panama Free Trade Agreement, the Pacific Alliance, the T-MEC and the Trans-Pacific Partnership Agreement (TIPAT) seek to adapt trade regulations to the digital age and encourage e-commerce.
Mexico obtained an outstanding score of 4.61 in the sub-dimension on Quality standards, reflecting a strong institutional framework dedicated to improving the quality standards of goods production. The Economy Sector Programme establishes strategies to strengthen the National System of Standardisation, Conformity Assessment and Metrology, ensuring the safety and quality of products and services. The Mexican Official Standards (NOM) and Mexican Standards (NMX) are key instruments in this process, supported by the Mexican Accreditation Entity (EMA) and the National Metrology Centre (CENAM). The National Laboratory for Consumer Protection (LNPC) conducts quality studies and educates consumers on their rights, contributing to economic development and consumer protection.
Finally, on the sub-dimension on the benefits of LAC integration, Mexico obtained a score of 4.17. The Ministry of Foreign Affairs coordinates the country's participation in the Pacific Alliance, where the SE contributes to the "Technical Group on SMEs". This group focuses on trade facilitation, business development, and public procurement projects, promoting crowdfunding, trade between creative industries, digitalisation of SMEs and cross-border e-commerce. In addition, the Committee on Global Value Chains and Productive Linkages was established to foster productive integration among member countries.
The way forward
The following actions could be considered, in order to improve Mexico's performance in this dimension:
Improve the monitoring and evaluation of implemented policies and programmes. This will allow for better adjustments and better design of new programmes.
Keep facilitating SMEs' access to information on administrative and commercial aspects in the country of destination, as well as on the bNFESits of the different programmes available, by improving communication channels with the private sector.
Foster sub-regional integration and empowerment of SMEs through standardised, collaborative, and inter-operable trade promotion and internationalisation programmes.
Strengthen private sector understanding of support for existing quality certifications. This can be done through satisfaction and performance surveys targeting enterprises already included in these processes, as well as knowledge and interest surveys for the general population, in order to bring information closer to the smallest entrepreneurs.
Dimension 8. Digitalisation
Mexico attains an overall score of 4.28 in the Digitalisation dimension. The National Digitalisation Strategy (NDS), led by the Coordination of the National Digital Strategy, serves as a comprehensive guide for Mexico's digital transformation. As of January 2023, the formal coordination mechanism in this area is the Comisión Intersecretarial de Tecnologías de la Información y Comunicación, y de la Seguridad de la Información (Inter-Ministerial Commission on Information and Communication Technologies and Information Security, CITICSI). CITICSI replaced the Inter-Ministerial Commission for the Development of e-Government. Comprising heads of Information and Communications Technology Units from various governmental agencies, this council convenes at least three times a year, ensuring cohesive efforts in the strategy's development. The EDN focuses on key aspects such as leveraging ICTs to enhance and bring transparency to government services for citizens. Additionally, it aims to expand internet coverage across the country. The Executive Council meticulously assesses achievements in ICT matters, fostering transparency and accountability. These factors contribute to a commendable score of 4.53 in the National Digitalisation Strategy sub-dimension.
In the Broadband Connectivity sub-dimension, Mexico achieves a score of 4.11. The nation's commitment to narrowing the digital divide is evident through its Programa Prioritario Internet para todos (Internet for All Priority Programme), operationalised under the National Development Plan 2021-2024. This programme encompasses the implementation of cellular technology, including towers, antennas, and 4G equipment, along with the establishment of free Internet access points in public spaces across Mexico. Additionally, it involves constructing a National Fiber Optic Network and deploying satellite and microwave technologies. Additionally, partnerships with the private sector facilitate last-mile connectivity, ensuring no area is left underserved. Regular consultations with network operators, consumers, and regulatory authorities guarantee inclusivity and responsiveness to evolving needs. A significant milestone is the promotion of free internet connectivity in public squares, health centres, hospitals, and schools. By deploying the internet to areas lacking coverage, Mexico aims for universal accessibility. To comprehensively assess the digital divide, the government focuses on segments of the population in geographically remote locations.
By integrating e-skills into the national education strategy, and the Digital Education Agenda, Mexico ensures that digital competence is a fundamental part of the curriculum. Initiatives like the Virtual Training System for Public Servants offer continuous training, enhancing the capabilities of public employees. Moreover, the government actively promotes digital skills through non-formal learning initiatives, providing training courses to improve digital literacy. Mexico actively encourages the participation of women in the digital economy through programmes like the Digital Skills Programme for 21st Century Mexican Women, which offers specialised courses, promoting technological literacy among women entrepreneurs. Additionally, with initiatives such as the Get into STEM Mode campaign focusing on encouraging more women to pursue careers in STEM fields and fostering diversity and innovation, Mexico’s score of 4.21 in the Digital Skills sub-dimension is one of the highest in the LAC region.
The way forward
Looking ahead, Mexico could consider:
Enriching Mexico's National Digitalisation Strategy by incorporating a dedicated SME Digitalisation Strategy. This should outline measurable targets, action plans, responsible entities, budgets, and timelines, ensuring a comprehensive approach to SME digital transformation. Consultations with SME representatives should be integral to the strategy's development, ensuring tailored interventions that address the unique needs of small businesses.
References
[6] INEGI (2023), Indicadores de Ocupación y Empleo, https://www.inegi.org.mx/contenidos/saladeprensa/boletines/2023/enoen/enoen2023_12.pdf.
[7] INEGI (2021), El INEGI presenta los resultados del estudio sobre la demografía de los negocios 2021, https://www.inegi.org.mx/contenidos/saladeprensa/boletines/2021/EDN/EDN_2021.pdf.
[9] INEGI (2019), INEGI Presenta resultados de la Encuesta Nacional sobre Productividad y Competitividad de las Micro, Pequeñas y Medianas Empresas (ENAPROCE) 2018, https://www.inegi.org.mx/contenidos/saladeprensa/boletines/2019/especiales/ENAPROCE2018.pdf.
[3] OECD (2024), OECD Economic Outlook, Volume 2024 Issue 1: Preliminary version, OECD Publishing, https://doi.org/10.1787/69a0c310-en.
[4] OECD (2024), OECD Economic Surveys: Mexico 2024, OECD Publishing, https://doi.org/10.1787/b8d974db-en.
[2] OECD (2024), Real GDP forecast (indicator), https://doi.org/10.1787/1f84150b-en (accessed on 13 March 2024).
[5] OECD (2023), OECD Economic Outlook, Volume 2023 Issue 2, https://www.oecd-ilibrary.org/economics/oecd-economic-outlook-volume-2023-issue-2_7a420292-en.
[10] OECD (2022), Financing SMEs and Entrepreneurs 2022: An OECD Scoreboard, OECD Publishing, Paris, https://doi.org/10.1787/e9073a0f-en.
[8] OECD (2021), OECD SME and Entrepreneurship Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/97a5bbfe-en.
[1] World Bank (2022), México overview, https://www.worldbank.org/en/country/mexico/overview (accessed on 12 March 2024).