Innovation and security: the challenges for stimulating domestic investment in Mexico: Milken Institute

There are two factors Mexico needs to address to attract domestic investment while it resolves the global uncertainty surrounding tariffs: opening an agenda to boost innovation and reducing the physical insecurity that prevails for people and businesses, said Maggie Switek, senior research director at the American think tank Milken Institute.

He explained that, unlike in Mexico, domestic productive investments in Brazil are the same proportion as those originating abroad. It would be important for Mexico to find mechanisms and strategies to attract domestic capital as well, he noted.

"Mexico is an advanced enough economy to not depend solely on foreign capital. They can develop their domestic capital and incentivize local investors," he said.

Interviewed by El Economista , she commented that the factors that could boost domestic investment are found in public governance, where insecurity has been a key issue for some time, and more recently, reforms to the judiciary and respect for the rule of law.

Resolving these details would provide a kind of breathing space for the country while the uncertainty surrounding the tariff trade policies being promoted by the United States is resolved, he stressed.

"If foreign investors are arriving, I don't see a reason for local investors to also settle in Mexico."

The expert observed that investors respond to economic incentives, and the more growth opportunities a country offers, the more capital will flow.

Data from the National Institute of Statistics and Geography (INEGI) shows that in 2023, gross fixed investment represented 23.4% of GDP, while FDI was equivalent to 1.9% of GDP. In both cases, this was the lowest level recorded since 2006.

Commercial perception and economic framework, strengths

The Milken Institute recently released its Global Opportunity Index 2025, which ranks countries based on the economic opportunities they offer investors.

This identification was made based on five categories: business perception of trade, financial services, international standards and policies, economic foundations, and institutional framework.

In global metrics, Mexico ranks 62nd out of 100 countries, below Malaysia (31); China (36); and above Vietnam (73). This is the same position Mexico held in 2024. This evaluation was conducted using data from 2024; therefore, it does not yet consider the impact of changes in the judiciary or the disappearance of autonomous bodies.

The world leaders, according to Switek, are the advanced economies, particularly Sweden, the Netherlands, and the United States.

The leaders, Switek explained, are advanced economies that mostly have investment in innovation, development, and technology among their greatest advantages.

The fourth in Latin America

The launch of the index coincides with the Mexican government's strategy to attract investment under the Plan Mexico program, so the findings could help improve its profile.

According to Mexico's results, among the five categories evaluated, its highest scores were in business perception regarding commercial aspects, compliance with international policies and standards, and economic fundamentals.