The GEM report 2002 finds that 18% of Mexicans are involved in entrepreneur activities, the highest number of any of the 29 countries covered in the study. They rank second worldwide in “opportunity’ entrepreneurship and fourth in “necessity” entrepreneurship.

Entrepreneurship abounds in Mexico but is concentrated among low risk, low value added endeavors that require minimum investments of capital. Due to economic realities, people are relatively unable to leave existing employment to pursue high-value ventures. Due to the dearth of risk capital, they select opportunities that can be tested quickly and have relatively high success probabilities and modest up-side potential with quick positive cash flow. Also, non-transparent business practices in these ventures make them unattractive to risk-averse investors. Also, the lack of high quality, timely information on markets, demographics, competitors, prices and costs hampers the growth of entrepreneurs. The quality of financial systems, venture capital, education and legal system needed to support entrepreneurship lack in Mexico. The Government permits and licenses needed to start a company are a major hurdle to most entrepreneurs in Mexico.

Mexico’s economy is one of the most open in the world and, has the largest number of free trade agreements. Mexico has built a network of free trade agreements with 32 countries and the most important of these agreements are with the world’s largest markets, such as NAFTA, the agreement with the European Union, an agreement with Japan, and other agreements with South and Central America. This has put Mexico in ninth place in the world in terms of the size of its economy, and seventh place in terms of the size of the balance of trade. This sustained progress has built an atmosphere of competition, conducive to innovation and undergoing constant improvement. This sustained progress (of the last two years) has allowed for better planned regulations that enables more assured long-term planning.

Important Resources