North and South: two competitiveness realities for Mexico

As I mentioned on my previous analysis, Mexico has big contrasts on its global competitiveness, with some areas on the first places and other on the last ones.

This contrast is also present within Mexico, where there are states a lot more competitive than others.

The Mexican Institute for Competitiveness (IMCO) published on September the State Competitiveness Index 2010, where the 32 federal entities are evaluated on 10 subindexes, measured by 120 variables. The results published reflect data of 2008.

These are some of the most important results of the report:

·         The three most competitive states, and therefore the ones with more capacity to attract and retain investments and talent, are Distrito Federal (Mexico City), Nuevo León and Querétaro. This states also occupied these positions in 2006. Surely, due to the recent security issues in Nuevo León, it would be affected on the ranking, but not as much as to leave the first places due to the big difference between these ones and the last ones.

·         The three worst states are Chiapas, Guerrero and Oaxaca. Chiapas went down 3 places since 2006; the other two were already on the last 2 places.

·         The most competitive states have these strengths:

o   World-class enterprises

o   More patents per population

o   Less rates of illiteracy, better education quality, and a population with more years of education

o   Governments with more fiscal autonomy

·         The main weaknesses of the less competitive states are:

o   Low level of environment sustainability

o   Not enough distribution of drinkable water

o   High illiteracy, low education quality, population with few years of education, low computer access, etc.

o   Low labor productivity, low negotiation capacity between unions and enterprises, low automation in agriculture, modest investment for housing

·         The states that improved more in this two years are Sinaloa (from 18^th to 10^th) and Tamaulipas (from 12^th to 8^th)

·         The states that lost more positions in the rank are Nayarit (16^th to 23^rd) and Quintana Roo (from 9^th to 13^th)

These results show clearly the existence of two Mexicos: a more competitive north (almost all the border states are on the first 10 places), a south with weaknesses, and the center with high contrasts (you can see the map at the end of this blog). This has produced a GDP per capita that is the double on the 5 more competitive states compared with the 5 less competitive, according to IMCO. There are no signs that show a closing of these gaps, so the businesses will have to deal with this double reality in the country.