Mexico is emerging an attractive innovation hub with high growth in areas such as venture capitalist (VC) investments and government and external R&D funding. By 2025, the country is expected to have 3.5 connected devices per person, which will create huge demand for innovative digital products, services and business models. Mexico will have the second-highest mobile adoption rate in Latin America.
“Mexico’s focus on education to create a talent pipeline for researchers and attract foreign investment, and growing start-up business support mechanisms are fostering a culture of innovation,” said Malabika Mandal, Visionary Innovation Industry Analyst at Frost & Sullivan. “The country has been rapidly rising in the Innovation Index due to steady reforms and dynamic policies. Higher technology investment by the government and pro-private investment schemes will position Mexico as a viable innovation hub for emerging technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and cybersecurity.”
Frost & Sullivan’s recent analysis, Future of Mexico—Global Hub for Innovation and Investment, Forecast to 2025, analyzes the social, technological, and economic factors influencing a culture of innovation in the country.
“The growth of emerging technologies is prompting traditional industries to reinvent themselves,” noted Mandal. “Mexico has the ability to be the regional innovation leader in emerging industries, 4G/5G telecommunications rollout, and affordable, smart, and green housing, as well as in more established areas like tourism and medical devices.”
Key findings presenting growth opportunities for Mexico include:
- Through greater investment in R&D and education, and by encouraging a tech-enabled society, Mexico’s economy stands to gain more than $245 billion in cumulative GDP growth from 2018 to 2025.
- Gen Y (millennial) and Gen Z cohorts will make up 45% of the total population by 2025. More than 90% of Mexican Gen Z will use the internet by 2025, generating a significant surge in technology development.
- By 2030, the middle-class population will reach 95 million. Mexico will enter the top 10 countries with the highest shares of global middle-class consumption, surpassing Brazil, the United Kingdom, and France.
- Mexico’s working-age population is expected to peak at approximately 68% in 2033, surpassing the working-age share of total population for all other LATAM countries.
- The Mexican IIoT market is predicted to grow from $1.6 billion in 2018 to $4.0 billion in 2022, at an approximate CAGR of 25.6%. The services and software segments will hold the highest CAGRs at 26% and 25%, respectively.
- In the next decade, the EV, telecommunications, and medical devices industries will show increased revenue as well as high investment values.