DRIVING THE FUTURE: EXPLORING TECHNOLOGICAL INNOVATION, FOREIGN DIRECT INVESTMENT, AND COMPETITIVENESS IN MEXICO

Abstract

In the current context of technological transformation and increasing global competition, innovation has become a strategic pillar of economic development. This study examines the role of foreign direct investment (FDI) and research and development (R&D) investment as key drivers of innovation capacity and competitiveness in Mexico, in comparison with its main trading partners: the United States, Canada, Brazil, Germany, China, and South Korea. The main objective was to compare R&D expenditure and FDI inflows among these countries, assessing their impact on technological capacity building and on attracting investment in high-tech sectors. The research followed a quantitative-comparative approach, using data from international organizations (World Bank, WIPO, OECD) for the 2000–2023 period. Key indicators included R&D spending as a percentage of GDP, net FDI inflows, and scores from the Global Innovation Index (GII) and Global Competitiveness Index (GCI). Findings reveal that Mexico lags significantly in R&D investment (0.3% of GDP), contrasting with countries such as South Korea (4.8%) and Germany (3.1%), which restricts its ability to attract FDI in advanced technological sectors and hinders economic diversification. Conversely, economies like China have combined high R&D investment with increasing FDI inflows, becoming global leaders in fields such as artificial intelligence and telecommunications. The evidence also indicates that institutional and technological limitations in Mexico obstruct the development of robust innovation ecosystems. The study concludes that Mexico must increase R&D investment, strengthen educational and technological institutions, and promote cross-sector collaboration to improve its integration into global value chains with higher technological content.