Evolution of industrial policy in emerging regions: The case of the automotive industry in Guanajuato, Mexico

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Objective: This article critically analyses the development of industrial policy (IP) in Guanajuato, Mexico, through the reconstruction of its trajectory and the evolution of its approach. It focuses on the designed policy instruments to promote the automotive industry in this state, which has recently deployed a great dynamism, measured through the foreign direct investment attracted to the region. Methodology: The information presented is the result of the qualitative and interpretative analysis of specialized plans and programs. In order to analyse the evolution of industrial policy we reconstructed its trajectory through the consideration of legal landmarks and its policy approach (passive/active). Results: Two stages and their policy approach were identified: 1) Setting Basic Conditions-Passive Approach, and 2) Long-term Conditions-Active Approach. During the first stage IP focused on attracting FDI and building basic infrastructure; in the second stage, active instruments have been implemented which seek to promote specialized infrastructure, backward linkages, training, and technological transfer. Limitations: Information was gathered by the analysis of official documents and available statistics. It is important to carry out a critical analysis of the results of some of the established projects in the official documents through case studies or correlation studies between key indicators (eg. FDI vs employment, FDI vs insertion of local companies in the industry, among others). Conclusions: The policy instruments that have been implemented in Guanajuato have fomented the automotive industry consolidation in the region. Some positive economic results are: greater employment, advancement of local suppliers and training programs, among others. However, its influence on local development is weak. IP should focus on the building of local absorptive capabilities to benefit from the generated externalities from FDI.