Mexico – Opportunities in many Sectors
It is common knowledge that Mexico’s manufacturing cost competitiveness (taking into account labour cost and productivity), together with its young workforce and work ethics, has sparked a steady growth in clusters in skilled and high-skilled industries such as automotive, aeronautics, and electronics. These clusters mainly occupy strategic locations in central states such as Guanajuato, Aguascalientes, Puebla (automotive), Queretaro (aeronautics) and Guadalajara (electronics) with good transport links and access to a large pool of qualified workers.
The tentative introduction of lower energy prices as a result of Mexico’s ongoing energy reform, which allows private companies to bid on contracts for a wide range of energy-related products and services, is expected to drive additional manufacturing opportunities and perhaps increase SME participation in supply chains by facilitating joint ventures and access to capital. And, of course, the time is right for green and renewable energy initiatives to thrive, as Mexico hopes to achieve 35% of power generation through clean energies – such as wind and solar – in less than 10 years.
I see similarities in the evolution of Mexican manufacturing with that of Irish manufacturing and FDI attraction – from its humble origins in the textile and clothing industries, mostly employing low-skilled workers; to skilled and higher value-adding activities/products in the automotive (the car assembly industry thrived in Ireland up until the 1980’s), aerospace and pharmaceutical industries – before moving towards a higher participation in the service economy.
This evolution is evident in the state of Guadalajara, and particularly in its namesake capital city, a hothouse of tech FDI and indigenous startups dubbed as the ‘Mexican Silicon Valley’.
Creative companies in sectors such as game development, film, animation, audio-visual and digital industries – perhaps drawing on the country’s rich folklore, arts and crafts and literary tradition (including its wonderful magic realism movement) for inspiration – are already relocating to Guadalajara’s Digital Creative City (Ciudad Creativa Digital, CCD). The CCD is an ambitious project to be completed in different phases of development which will include a Supercomputer Centre to store data and manage telecommunications and an Innovation Centre for Economic Development Acceleration (Centro de Innovacion y Aceleracion para el DesarrolloEconomico, CIADE). Because of its CCD master plan, Guadalajara was chosen as the pilot for the IEEE Smart Cities Initiative and if the smart-city transition proves successful, the CCD will be replicated across the country and further afield in Latin America.
Possibly due to the initiative’s similarity to Dublin’s Digital Hub, Guadalajara and Dublin signed a ‘digital twin cities’ agreement in 2013, promoting trade and investment links between the two regions – evidence of yet more intertwining of the stories of these two rapidly changing nations.
Blanca Suarez © 2015.