Table of Contents

  • Globalisation in the OECD has had a greater impact on regions than on nations as a whole. This is also true for the case of Mexico and Morelos. Technological change and the gradual reduction of the working-age population are two main challenges affecting the economic performance of many regions. While some regions are able to adapt to these challenges and reap the benefits of globalisation, others remain stagnant and struggle to compete in the global arena. In Morelos, labour productivity decreased from 2003 to 2010, and started recovering in 2010. Technological change has led to the rapid growth of service industries and the knowledge-based economy, allowing regions specialised in the production of information and knowledge to become more competitive in the global economy.

  • Morelos, home to 1.9 million inhabitants, is located south of Mexico City. Its proximity to the metropolitan area of Valle de Mexico has favoured the development of the manufacturing sector as well as tourism and related services. Specialisation in manufacturing has doubled since 2003, and the share of gross value added (GVA) reached 23.4% in 2013, representing a resource for the economy, with the right framework conditions. In terms of employment, the economy is very diversified, with the manufacturing, agricultural, service, and public sectors each contributing to more than 10% of employment in Morelos. The state also contains several prominent research institutes that have contributed to more patents per capita than the Mexican average. Finally, natural and cultural amenities, as well as favourable climate conditions are potential drivers for tourism. An integrated policy approach is necessary to exploit the potential synergies amongst these diverse economic activities.

  • The state of Morelos, with its population of 1.9 million inhabitants, is one of the smallest in Mexico. The state is located in the centre of the country just south of the metropolitan area of Valle de Mexico, within close reach of the capital Mexico City. GDP per capita, however, is below the Mexican average and less than half of the GDP per capita in Mexico City. Most of the state’s population, more than 80%, lives in metropolitan areas, making it one of the most urbanised states in Mexico, with a population density of 388 inhabitants per square kilometre. The largest city, Cuernavaca, however represents only one-fifth of the state’s population.

  • This chapter provides an assessment of the economy of Morelos identifying strengths and challenges for economic development. The analysis starts with the macroeconomic context which affects the economy of Morelos and then turns to a discussion of the regional trends of output per capita and labour productivity. The performance of Morelos is compared with the average performance of OECD TL2 regions and the Mexican average. Furthermore, the performance of Mexican states similar to Morelos is used as a benchmark to assess the competitiveness of Morelos’ economy.

  • This chapter provides an overview of the economic and social policies in the state of Morelos that are most related to human capital issues including an assessment of education, labour market training and innovation policy priorities in the region. Education and training policies should be pursued to improve social cohesion and productivity in the state. They should seek to attain inclusive growth by increasing student education performances and improving the alignment of skills supply with skills demand. Investing in innovation is also critical to regional competitiveness. Morelos should better mobilise its innovation infrastructure for knowledge diffusion and exploitation. A final section is dedicated to the newly-created Council for Human Capital, a regional governance body aiming to address the interconnectedness of such policy challenges and promote an integrated vision of regional development.

  • This chapter examines the territorial development dimension of the state of Morelos. It provides a glance into urban policies, including spatial planning, mobility and environment, followed by rural policies, accessibility and connectivity and finally tourism and natural amenities. Each policy domain is evaluated in order to support the state government of Morelos in building on its key strengths and areas of opportunity in order to enhance the region’s economic development and well-being. This assessment draws on examples and best practices from across the OECD.

  • This chapter provides a diagnosis of the main multi-level governance mechanisms of Morelos, as well as an analysis of subnational governments’ finance of the state and its municipalities. The chapter has four sections. The first presents an overview of the national governance structure and the distribution of competences between levels of government. The second section focuses on the fiscal revenues and expenditures of the state of Morelos and its municipalities. The third section discusses the governance mechanisms. The final section provides the key findings and recommendations.