For decades, Mexican citizens who wanted to get a copy of their birth certificates underwent a long, tedious, and uncertain process. They needed to retrieve their parents’ birth certificates, get a document signed by a representative of the Mexican Ministry of Health, and visit a local office of the Civil Registry. When the certificate finally arrived, anywhere between two weeks and two months later, there were sometimes errors in the name, date of birth, and even gender.
Today, however, Mexicans can get a secure, certified, and error-free copy of their birth certificate
within minutes by logging onto gob.mx, a one-stop portal that consolidates 34,000 databases from 250 government institutions and 5,400 public services.
The site, launched in 2014, is the centerpiece of Mexico’s drive to digitize the operations of its federal government—part of a wave of such efforts to improve government productivity taking place across the globe.
Still in the early stages of its digitization journey, Mexico ranks 55th in McKinsey’s analysis of the digital maturity of 151 countries.
When compared with countries with similar per capita GDPs, this is a laudable standing. But Mexico has yet to achieve the kind of world-class digital transformation that fuels productivity and economic growth; as of right now, the country is about halfway there. To move forward, the Mexican government’s ambitions should be more closely aligned with those of higher-performing countries like Estonia and Malaysia—nations with income levels close to that of Mexico but that “punch above their weight” in regard to digital maturity (Exhibit 1).
We estimate that were Mexico to attain a “good” or “very good” digital-maturity rating, it would boost
the country’s GDP by 7 to 15 percent (or $115 billion to $240 billion) by 2025. The growth would come from greater productivity and employment in existing sectors, the creation of new digital (or digitally powered) businesses, the expansion of the information-and-communication-technology (ICT) sector, and a successful labor-force transition to these new digital industries (Exhibit 2).
As the second-largest economy in Latin America, Mexico also has a unique opportunity to set the standards for what a digitally enabled government looks like in the region.
Implementing these kind of changes is no small task (see sidebar, “Mexico’s digital underspending”). First, Mexico needs to invest significant additional resources in ICTs, since its government spending lags behind in relation to the weighted average for our benchmark countries: 1.5 percent of the federal budget goes toward ICT versus the 3.9 percent weighted average.
To get up to speed, we estimate that public and private spending on ICT in Mexico would need to increase by at least 5 percent.
How Mexico stacks up
In this article, we look at how Mexico is faring along the four critical dimensions used to define digital maturity (government, foundations, economy, and society) (Exhibit 3) and outline the next steps the government could consider taking to become a leader in the digital future.
For citizens to participate in the services of a digital state, they must first have access to the internet, mobile networks, and other secure data infrastructure. But in 2016, Mexico had just 13 fixed-line broadband subscriptions for every 100 inhabitants, ranking it last among both Latin American and Organisation for Economic Co-operation and Development (OECD) peers.
The rate of subscription to mobile broadband is higher, at 61 percent,
but this still leaves a sizable portion of the population unconnected and thus spending additional time and money getting to physical centers to access government services. Because of this, Mexico ranks 93rd (again, last among all OECD countries) in our digital-foundations dimension.
Mexico has made notable progress in its efforts to offer web and mobile access to public services (for those with such access) and to make government more efficient by automating internal processes. In addition to the gob.mx portal, the country has created the role of national digital strategy coordinator within the president’s office and has established a national digital strategy. This has resulted in successful initiatives to make government data available to anyone and has made Mexico the leading Latin American country on the Open Data Barometer world ranking.
The country, however, receives low scores from its citizens on their overall satisfaction with the convenience and accessibility of government services. In a recent survey, Mexico had the worst-rated citizen experience (4.4 out of 10) of the group of countries surveyed (Canada, France, Germany, Mexico, the United Kingdom, and the United States) and the largest perception gap between what people experience in the private sector versus the public sector.
In our digital-government subanalysis, Mexico comes in at 39th (out of 151 countries), similar to Chile, Ireland, and Israel.
Mexico’s shaky digital foundations hurt its ability to have mature digital ICT industries. In addition to diminished access to high-speed internet, the reliability of postal services is low, and fewer than
40 percent of Mexicans over the age of 15 have a bank account.
As a result, the country is estimated to have poor potential for developing a robust e-commerce sector, which requires efficient delivery of products and digital forms of payment.
Moreover, less than 1 percent of Mexico’s exported goods and services relate to ICT. McKinsey’s digital-economy subindex places Mexico in 92nd place.
Digitization can improve the quality of life for citizens by fostering greater civic participation, providing access to information, and offering new tools for health and education. In recent years, Mexico has accelerated its digital-society efforts and ranks 34th on McKinsey’s index. On gob.mx/participa, for instance, citizens participate in public polls and discuss government policies on forums and blogs. At datos.gob.mx/retos, which provides access to Retos Públicos (retos is Spanish for challenges), software entrepreneurs can present solutions to complex public-policy problems, such as the creation of earthquake alerts through push notifications on mobile phones.
Unlocking the opportunity
To attain the meaningful economic and societal benefits that come from having a digital government, there are three basic initiatives Mexican government leaders could consider putting on top of their priority lists.
Defining a digital vision and strategy, then linking them to policy priorities
Any successful digital transformation—whether in the private or public sector—depends on having a clear vision and defined goals, and then setting priorities. For governments, this means intimately linking digital to public-policy objectives and viewing it as a lever for achieving them. In India, for example, the government framed its goal of transforming the country into a digitally empowered society and knowledge economy in this way: “digital infrastructure as a utility to every citizen.” The UK government talks about developing a world-leading digital economy that works for everyone. To establish a clear link between its digital vision and public value, Mexico’s incoming administration may want to consider revisiting the country’s 2013 National Digital Strategy and aligning it with Mexico’s current and future needs, as well as with the new government’s priorities.
This digital vision should be accompanied by a clear set of milestones and metrics that monitor its implementation and impact closely. To ensure success, initiatives that don’t yield the expected results should be rigorously evaluated and adjusted or deprioritized in relation to resources. Such a “test and learn” practice is not native to the public sector and will require the use of different budgeting practices, such as top-down budgets that allow a certain amount of flexibility.
Setting up the correct delivery mechanism
Digital transformations require ways of working that are very different from how governments normally operate. Instead of remaking products, processes, and policies according to what benefits each agency, governments running successful transformations typically orient their efforts around what citizens desire and expect. This requires unprecedented, and at times uncomfortable, levels of coordination among previously siloed entities, such as different government agencies, levels of government, and private-sector stakeholders.
To accelerate and streamline this transformation, Mexico could double down on its efforts to centralize digital initiatives across government agencies by providing shared platforms and services so that individual units do not need to “reinvent the wheel” and can focus on actual service delivery. Initially, this could involve coordination through a high-level council that meets regularly. Such a council would oversee digital transformation across the government, including deciding a rollout schedule of initiatives and monitoring their progress with a publicly scrutinized set of periodic key performance indicators. It would also identify obstacles and give support to the different government agencies that can address them. If issues cannot be resolved at this level, the council should have the capacity to escalate them.
Ideally, this central group would have a direct role in designing interoperability and data-architecture standards and would perform ongoing reviews of the digital solutions being implemented by different government agencies. It would also ensure there is a consistent user experience (front end) and compatibility with the data and systems of other agencies (back end). Likewise, the group could play a limited role in implementing pilots or new strategic initiatives, either through its own “digital factory”
or by managing external vendors.
Eventually, and in a more advanced scenario, the government could form a separate digital delivery unit. The government of Singapore, for example, established the Government Technology Agency (GovTech) as an implementing agency for the Smart Nation and Digital Government Office, both part of the Smart Nation and Digital Government Group under the Prime Minister’s Office.
The unit usually has a strong sponsor. As in Singapore, it may report to the president or prime minister, or the president or prime minister serves as the chair of periodic progress-review meetings.
Building digital foundations
Because the gaps in Mexico’s digital foundations have ramifications for each of the three other dimensions, we suggest that addressing five essential building blocks could shore up the country’s infrastructure.
Boosting digital accessibility
To increase internet access across Mexico, both national and state-level governments could provide private companies with specific incentives for investing in broadband networks in marginalized communities, such as Chiapas and Oaxaca.
In India, for example, the central government helped develop the National Optical Fibre Network (BharatNet) through tax incentives to private providers that make investments in infrastructure. This effort successfully brought broadband services to approximately 115,000 villages, aiming to deliver broadband connectivity to 250,000 villages overall.
In recent years, Mexico has made significant strides to boost the number of college graduates with degrees in science, technology, engineering, and mathematics.
Nurturing the right kind of talent
By 2030, automation technologies are expected to displace nine million workers in Mexico,
with the eventual replacement jobs requiring entirely different skills and competencies—most of which the current Mexican educational system is not fully prepared to address. In recent years, Mexico has made significant strides to boost the number of college graduates with degrees in science, technology, engineering, and mathematics (STEM). In 2016, 25 percent of graduates were from STEM disciplines, which is equal to the OECD average. But overall, Mexico’s education system still lags behind. According to a World Economic Forum survey, the quality of Mexico’s mathematics and science education ranks 126th out of 139 countries.
And only 17 percent of Mexicans graduate from college (as compared with the OECD average of 37 percent), making the overall talent pool small.
To address this, CONACYT (Mexico’s National Council on Science and Technology) could fund a program dedicated to keeping primary and secondary school teachers up to date in STEM knowledge and providing them with new teaching methodologies. Government incentives that encourage students in rural areas to attend college could also be extremely helpful.
For existing workers, the Mexican government could consider spurring the development of reskilling programs that will prepare people who are going to be, or who already have been, displaced by the increasingly automated and service-oriented workplaces of the future. For example, through the SkillsFuture program, the government of Singapore collaborates with private companies to develop low-cost, massive, open, blended (in person and online) course programs to train new entrants to the workforce and reskill existing ones in new-economy skills, like data analytics and innovation.
Creating smart regulation
The development of new business models often creates a need for new or updated regulation. Mexico recently passed, and is in the process of implementing, a fintech law (Ley para Regular las Instituciones de Tecnología Financiera) that governs cryptocurrency transactions and establishes rules for connectivity via application programming interfaces. It also includes a regulatory “sandbox” in which companies without a banking license can test solutions with real customers.
Since regulation can be daunting for start-ups, structures that help explain rules, offer advice, provide forums for getting questions answered, and generally remove uncertainty for start-ups can go a long way toward fostering their creation. Singapore’s FinTech Office could be one such model. The government’s monetary authority and its National Research Foundation established a one-stop platform for financial start-ups, providing guidance, significantly reducing bureaucratic complexity, and, in effect, promoting Singapore as a fintech hub.
The traditional, siloed model of every agency procuring and maintaining its own technology is fading away. In its place are shared platforms and services that enable the seamless sharing and aggregation of data across agencies. With agencies powered by an integrated, cloud-based data architecture, citizens can go online to track the progress of complex, multiagency requests, use the same document to navigate multiple online processes, and get their identities verified in one simple step. This model also reduces paperwork, streamlines back-end processes, improves the government’s ability to provide targeted support programs, and allows real-time updates of databases. It also affords the kind of 360-degree view of citizens that enables governments to serve people more efficiently and effectively, a result much like what private-sector companies are trying to achieve.
Although Mexico has taken steps toward this kind of system compatibility, a systematic approach to enforcing standards is lacking. All federal agencies, for instance, are required to report standardized transparency data; yet the latest compliance report of the National Institute of Transparency, Access to Information and Personal Data Protection focused on whether agencies filed their data on time, not on the quality of that data.
There is an effort to design norms for systems and data architecture as well as for shared back-office services, but at the time this article was published, the website for the government’s interoperability initiative featured several technical documents that were incomplete or entirely empty. Systematically enforcing technology standards and imposing penalties for noncompliance can go a long way toward ensuring a successful IT evolution.
Addressing data privacy and cybersecurity
Without proper security measures in place, people and systems are vulnerable to cyberattacks.
In April 2018, vulnerability in the software that connects Mexican financial institutions to the Interbanking Electronic Payment System resulted in a theft of around $15 million and significant delays in electronic money transfers, including salary payments that were due during time of the attack.
Mexico has established several cybersecurity units (one of them within the Mexican Central Bank as a response to the attack
) and defined the physical-, technical-, and administrative-security measures government agencies managing personal data must take. But the government might also consider playing aggressive defense so that it is ready for attacks. This can include hiring actual hackers to test the system and find vulnerabilities that need to be closed, and simulating attacks so that response plans can be implemented in real time. Each government agency could also have a risk profile established so that capabilities can be developed accordingly.
Mexico has made substantial progress in digitizing its government in recent years. Yet before it can advance further and capture the significant economic potential of digital, the country may want to take a step back and fix some of its foundations, most notably internet access, which reflects the inequalities present in Mexican society. Mexico’s incoming administration could consider mapping out a clear path for how digital initiatives can help achieve its economic, educational, health-service, and national-security objectives.
No doubt, there will be significant challenges. Going digital will require an investment of financial resources, extensive coordination among the multiple stakeholders and levels of government, and new regulations governing the growing e-commerce and fintech sectors. It most likely would entail participation incentives for the private sector, since governments should not attempt to “go it alone.” In the end, both sectors of society stand to reap the value digitization will sow.