Despite a generally poor business and technology image around the world, Mexico is poised to become a global leader in nearshore services – primarily in the area of software development. According to a recently released report from Nearshore Americas, our southern neighbor is on pace to enjoy rapid nearshore growth through the next few years and beyond. Knowing what we know about Mexico in the technology sector, that should not be surprising.
Nearshore Americas says that the only two things that are creating any kind of hindrance to Mexico’s nearshore development are the country’s ongoing drug problem and false perceptions of a skills shortage and language barriers. They believe both will be overcome in the near future, catapulting Mexico to the top of the nearshore industry.
Mexico has three big things going for it, according to the Nearshore Americas report:
1. An Exceptionally Large Talent Pool
No one is quite sure why the perception still exists in the U.S. that Mexico does not have an adequate talent pool to provide the needed outsourcing services required by the technology sector. This perception should not still exist because it simply is not true. According to the data, Mexican universities produce at least 100,000 engineers every year – quite an impressive number by any measure.
Making the talent pool more attractive is the fact that tech graduates tend to not concentrate in one or two areas. Nearshore Americas says they fan out all across the country, being as likely to work in big cities like Mexico City and Guadalajara as smaller cities such as Merida in Tijuana. Need titanium development in central Mexico? Skilled workers are there. Need Full Stack development on the West Coast? That’s not a problem either.
2. Shared Border, Time Zones, and Culture
As a nearshore provider for the U.S., Mexico enjoys a shared border and time zones. This makes for optimal dealings between the contracting company and outsource provider. Above and beyond borders and time zones, Nearshore Americas explains that Mexico has a certain “cultural affinity” for its northern partner.
What that really means is that the business cultures in the U.S. and Mexico are very similar. Technology companies in both countries utilize a five-day work week; they are unafraid to do what it takes to attract and retain the best talent and believe in innovating as much as possible to drive their visions. In the end, this means Mexican and U.S. workers tend to get along very well.
3. The Favorable Economy for Foreign Investment
This last point is really a two-edged sword. On the one hand, Mexico’s struggling economy is not good for its citizens as a whole, some of whom have reached the point of being completely unemployable. On the other hand, the country’s economy is inviting the kinds of foreign investments that is making it possible for technology companies to thrive there.
Also important to U.S. companies looking for nearshore services is the fact that they can contract with Mexican companies to save money on labor. Simply put, it is more cost-effective to utilize nearshore development services as compared to hiring salaried employees based in the U.S.
The experts believe Mexico is on the verge of accomplishing great things in the nearshore services sector. If the Nearshore Americas report is correct, and there is no reason to believe it’s not, Mexico will open a lot of eyes in the technology arena over the course of the next few years. What happened in Silicon Valley in the 1980s and 90s could sweep across Mexico and completely transform that country’s position within the larger, global technology sector.