Based on an in-depth survey of Mexico’s innovation research and semistructured interviews with critical actors of Mexico’s innovation ecosystem, this report explores how to encourage innovation in Mexico. It identifies four types of inhibitors to innovation—government, community, infrastructure, and funding—and explains them in detail, providing data-driven evidence of advances and problems. It then proposes the following 15 explicit recommendations for ways to promote innovation-driven entrepreneurship, with specific examples and better practices from private and public institutions around the world:

1. Promote education that supports creativity and teamwork.
2. Expand English education to support talent and knowledge discovery.
3. Teach business skills.
4. Promote entrepreneurship awards to solve specific challenges.
5. Professionalize technology transfer offices.
6. Nurture local firms in Special Economic Zones
7. Boost the impact of Mexico’s CONACYT (National Council for Science and Technology) metrics of success and introduce demand-driven funding options.
8. Pay incubators for creating final products, not firms.
9. Nudge corporate venture.
10. Use Mexico’s “Fund of Funds” for social impact.
11. Redesign public funding structures to respond to innovation necessities.
12. Develop specialized institutions to design and execute public-private partnerships for innovation.
13. Create progressive tax incentives to promote innovation.
14. Reduce cumbersome regulations on new businesses.
15. Fight corruption by accelerating procedures and designing transparent processes for starting a business.