The Necessity of Innovation in a Dynamic Environment
In a rapidly changing and challenging environment, innovation has become a strategic necessity for businesses. With significant social, economic, and geopolitical dynamics, organizations must reevaluate their business models. The question is no longer whether to innovate but when and how, according to the study “Panorama de la innovación en México y Centroamérica 2025. Avanzar hacia la transformación permanente” by KPMG México.
75% of Mexican Companies Plan Product Changes
The study reveals that 75% of Mexican companies anticipate substantial changes to their products or services within the next three years. These organizations are embracing innovation for various reasons:
- 39% aim to stay competitive in the market
- 25% seek to optimize and streamline their product and service portfolios
- 11% are responding to customer demands
Transforming Product and Service Delivery
This dynamism is prompting 67% of companies to alter how they offer products and services. Diego Bojórquez, innovation manager at KPMG Ignition México, explains that this change involves integrating technology into products and services and strengthening the omnichannel model, along with self-service platforms for customers.
Digital Transformation
In Mexico, 71% of companies have already implemented digital transformation processes, indicating a high level of digital maturity among Mexican businesses.
Bojórquez notes that digital transformation can take several years, as it requires involvement from multiple departments and process transformations. However, once completed, companies are better equipped to respond to environmental changes and more effective in their innovation processes.
Types of Innovation Processes
The KPMG study highlights that organizations view technology as a tool for disruption, better customer understanding, and improved decision-making. They primarily focus on three areas:
- Incremental (45%) : improving or adding customer-demanded aspects to products and/or services
- Transformative or Disruptive (34%) : entering new customer segments with different products
- Adjacent or Point (19%) : making point improvements
“Double-digit transformative innovations indicate that companies are seeking radical changes to their products or services,” Bojórquez adds.
Technologies Used by Organizations
The report also emphasizes that the technologies expected to have the most significant impact on organizations in the next three years are:
- Analytical Artificial Intelligence (66%)
- Data and Analytics (63%)
- Generative Artificial Intelligence (55%)
Generative AI has gained prominence recently, moving from sixth place in 2023. Meanwhile, cloud technology has dropped to sixth place from third.
“Generative AI is accelerating rapidly and has the potential for profound impact on organizations. Although cloud technology has fallen in Mexico’s ranking from third to sixth, this could be due to many organizations feeling comfortable or mature with their cloud solution implementations, making it no longer a priority,” Bojórquez explains.
Lack of Innovation Culture
Luis Rivera, KPMG Costa Rica partner, points out that there is a scarce innovation culture in Mexico and Central America due to insufficient technological adoption, reported by 38% of Mexican organizations and 27% in Central America.
“There is no recipe specifying the elements necessary within an organization to foster an innovation culture,” Bojórquez clarifies.
He explains that effective innovation development requires employees to feel free to propose new ideas and projects without fear of failure or repercussions if projects don’t succeed.
Moreover, an innovation culture necessitates leadership support, perceived by 62% of organizations, followed by 165 managers or area responsible parties, and only 14% have specialized teams.
Metrics and incentives are also crucial to enable employees to dedicate time to innovation.
