Mexico IT Initiatives

By Victoria Prussen Spears

Thanks in part to efforts by the Mexican government to coordinate with educational institutions and private industry, and its offering of an array of incentives, Mexico’s growth in the IT sector has been nothing short of phenomenal. In a 2010 interview, Alfredo Pacheco, the CEO of MexicoIT, noted that the tech sector in Mexico was growing at least three times faster than the county’s GDP. In 2000, on its way to becoming the attractive IT nearshoring haven it is today, the IT industry in Mexico exported about $2 million in IT services. According to Nearshore Americas, a decade later, Mexico expected to export $3.5 billion, with about 85 percent destined for the U.S. Mr. Pacheco, in 2012, noted that Mexico’s IT exports are about $5 billion. About 25 Mexican IT firms have chosen to set up offices and facilities closer to their customer base in the U.S., many in Silicon Valley. The government agencies described in the following paragraphs have been instrumental in driving this growth.

MexicoIT, a program of the National Chamber of Electronics, Telecommunications and Information Technologies (CANIETI), an industry association of leading IT companies in Mexico, is supported by the Mexican Ministry of Economy through the Program for the Development of the Software Industry (PROSOFT). MexicoIT is charged with introducing global companies to Mexico as the “world-class quality, true nearshore alternative for IT solutions; demonstrating the business benefits of investing in MexicoIT industry; and managing inquiries and consultations from global IT industry representatives interested in doing business with Mexico.”

The Ministry of Economy funded the PROSOFT program in 2004 with $12.8 million. The PROSOFT program allows qualifying IT firms established in Mexico to receive cash grants of up to 50 percent of the total cost of their project and a tax credit of up to 30 percent of the total R&D expense.

Although much training was done through the Prosoft Fund, according to a World Bank blog post by Arturo Muente-Kunigami, “training grants were demand-driven and little economies of scale were created in the training process.” The quality of providers has been characterized as inconsistent and the “certification as a percentage of trainees was relatively low.”

Several years ago, the World Bank signed the IT Industry Development Project with Mexico. MexicoFirst, a non-profit organization led by CANIETI, the IT industry chamber, and ANIEI, the Association of Educational Entities with IT Programs, subsequently was created. Mexico First, whose mission is to “facilitate access to training and certification of individuals and businesses through strategic alliances,” intends to promote technical training and the learning of English, certifying 12,000 specialized workers annually, and “maximizing the resources provided by the Government of Mexico through the Prosoft Fund.”

In a May 2012 interview, Mr. Pacheco noted that the Mexican government is doing an exceptional job “supporting start-ups and the programs that [they] are working with,” giving away $800 million in 2011 alone.

The U.S. Chamber of Commerce, in its recent report, “Enhancing The U.S.–Mexico Economic Partnership,” recommends supporting Mexico’s growth as “a hub for provision of business process outsourcing (BPO) and other outsourcing services.” This would “create jobs and opportunities for training in office skills and the English language by establishing Help Desks and other types of reference offices.”

Through these initiatives, and through other public and private efforts, Mexico is moving strongly forward to increase its attractiveness to IT businesses, and to create a workforce that will meet the needs of U.S. nearsourcers long into the future.

The above is an excerpt from ‘Outsourcing Destinations: Mexico 2013’ by Victoria Spears, CEO of Global Outsourcing Information.

Hasta la próxima!

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