When we imagine the sleekest, most provocative, cutting edge developments in information technology, we often think of U.S. and Asia Pacific giants like Apple, Samsung, IBM, HCL Technologies, and Alibaba leading the charge. Prepare, now, to forever shift your view on IT by traveling south – to the site where a technology sea change is about to occur.
For your best and brightest information technology leaders, it’s time to look to the tech-savvy millennials of Mexico: In a brand new report released by Nearshore Americas, a compelling, fact-based analysis provides a picture of exactly why Mexico's technology development is poised to outperform India for quality enterprise software services. For starters, Mexico has emerged in recent times as a major player in the global economy, with a GDP valued at U.S. $1.3 trillion and a population of 125 million in 2014. Since the inception of the North American Free Trade Agreement (NAFTA) in 1994, Mexico’s access to both the United States and Canadian markets was solidified, paving the way for 10 free trade agreements with 45 countries.
Now, in 2016, a nearshoring partnership with Mexico stands as one of the most IP-secure, labor-loyal outsourcing opportunities for North American businesses, perhaps surpassing offshoring favorite India in preference in the near future. Mexico’s broad labor distribution, a strong IT/telecom backbone, and a weakening Mexican peso are just a few of the factors that give promising hope to a young millennial population seeking solid footing as they continue to enter the workforce in large numbers. By providing like-minded advantages with the U.S., such as language, cultural affinity, and time-zone alignment, an expanding pool of technology professionals are helping companies across North America move into higher-value vertical markets.
Here are an additional five reasons why Mexico's technology development is poised to outperform other offshore sites, including perennial favorite India:
- Language: Mexico’s close proximity to the United States means that a large segment of the workforce speaks English and is familiar with the expectations of the modern American workplace. Mexicans who are educated in areas relevant to advanced manufacturing, high technology development, and engineering are often required to pass English-language exams as a condition for graduation. More than 16 million Mexicans speak English, and an even higher percentage of those in the business and white-collar work environment speak English fluently.
- Time-Zone Alignment: In addition to enjoying an inherent time-zone advantage of five hours over India, Mexico City and many other key locations in the country — including the tech hubs of Guadalajara and Monterrey — sit in the U.S. Central time zone. Other regions fall into Mountain and Pacific time. In 1996, Mexico also adopted daylight savings time, so it could remain tied to the United States schedule as the two nations were accelerating their economic connections. The exact start and end of daylight savings can vary between the two countries, but the beginning and conclusion is always within a few short weeks.
- Demographics: Mexico’s labor force is young, educated and growing, especially compared to both developed and developing nations alike. According to the United Nations, Mexico’s yearly change in population growth has recently surpassed that of India, with a high concentration of working-age people between 16 and 65, and 78 percent of them living in fast-paced, urban environments, this data represents a robust, emergent, tech-savvy workforce.
- Infrastructure: Mexico has committed to spending hundreds of billions of dollars on transportation and communications infrastructure through 2018. This includes high-speed passenger rail projects, a U.S. $4.6 billion for port infrastructure through 2018, and a massive, two-phase expansion of the Mexico City airport. Mexico’s 2014 telecommunications infrastructure reform focused on strengthening competition through regulation. By 2017, 54.4 million people are expected to be using smartphones in Mexico, and the country now reports the fifth-fastest internet connection speeds in the Americas. Mexico now has almost 14.2 million unique IPv4 addresses — about the same total as Canada.
- Mexico’s Limited Wage Inflation Pressure and IT Focus: Since 2012, Mexico has been graduating, on average, 130,000 engineers and technicians a year from universities and specialized high schools focused on IT. For those companies looking for an outsourcing partner, Mexico has a well-educated pool of talent in need of employment, with limited pressure on wage inflation.