Technology, financing and policy shifts in Mexico : challenges for small firms in a newly opened economy
The thesis argues that as technology and the economy are closely related, one factor undermining Mexico's economic performance may be the lack of a coordinated technology and innovation policy. It examines the relationships between three main participants in the national system of innovation: government, firms and financial institutions. Indigenous technology development in Mexico has become a more relevant debate since the country evolved from a protected to an open economy. Therefore, the period of study starts with the background of the 1970s, while the core of the thesis covers the mid-1980s onwards. It is argued that the economic crises of this period justify the need for, and hence the assessment of, government participation. Among the different government policy tools, this work focuses on the financing of private firms' technology projects. Small and medium-size enterprises (SMEs) are the subgroup of firms analysed through both quantitative and qualitative methods. Empirical evidence was gathered mainly from primary sources, including documents, in-depth interviews and a national survey of SMEs that have sought support from government agencies for undertaking technology projects. Even if Mexico has the main elements that, by international standards, any national system of innovation should have, this research shows that the short-termism of the government policies to promote the development of technology clashes with the long-term nature of technology projects. The lack of effective coordination between participants within the system undermines the creation of national technology capabilities. Designers and users of technology promotion programmes are isolated from each other, and bridging institutions, like business chambers, are not bringing them closer overcoming divide. Small firms do not have internal resources for research and development (R&D) activities, and banks have been reluctant to fund technology projects. Therefore, this thesis makes the case for government intervention, while suggesting more suitable actions for change.