Ask anybody of a “certain age” what he or she believes is the value proposition of Mexico, and likely, you’ll find the answers track two opposing, yet time-honored, stereotypes: That of a verdant, tropical and romantic vacation destination – or as a hotbed for lawlessness, danger and violence.
Even fewer would take note of a third, more emergent personality – one that soon may relegate these extremes as outliers, and position Mexico as the new worldwide hub for technology and logistics.
Mexico, it would seem, has quickly, yet quietly, become a world leader in nearshoring – a more local cousin to the “offshoring” that previously was favored by American businesses as a means of helping to reduce manufacturing and production costs.
Today, it’s not uncommon to find some of the biggest names in U.S. technology -- Microsoft, Oracle and Cisco, to name a few -- reaping the benefits of Mexico’s growing technical workforce, improved national support -- and proxemic factors that simply can’t be replicated halfway around the world.
In fact, Nearshore Plus -- where like-minded, project-focused teams in the U.S. and abroad work as one -- is an ideal way to increase business efficiency. This is especially true for mobile app development -- a market that is expected quadruple in size -- from $72 billion today, to $284 billion by 2019, according to research conducted by Kony, Inc.
With apps playing such a critical role in how consumers and employees interact with companies, the ability to cost-effectively and quickly develop new and refined apps that maintain competitive and technological advantages is why so many companies are running for the border.
Guadalajara, where iTexico sources much of its technical expertise, was recently lauded by the Institute of Electrical and Electronics Engineers (IEEE) as the “Smart City of the Near Future.” The IEEE cited several factors for this distinction, including:
- Host to more than 100 software companies and manufacturers, including Foxconn, Intel, Oracle and Jabil;
- More than 20 corporate campuses packed with startups and going concerns focused on technology;
- A workforce with an average age of 24 and more than 20 universities offering engineering and IT coursed to train them;
- The pending construction of Ciudad Creativa Digital, a smart-city urban environment; and the recent designation of a 40-hectacre swath of downtown as the “Digital Hub.”
4 Reasons Why Mexico Is The New Mobile App Epicenter
1. Time savings: Competitive forces on American businesses have substantially increased pressure to develop – and redevelop – mobile applications at a much faster pace than was previously thought possible. Outsourcing to India or other places it's been replaced by proximity. Nearshoring has eliminated the time lag inherent in working with offshore resources that are asleep when your American engineers are awake. This cuts several hours EACH DAY off the process of waiting for critical feedback or code updates.
Additionally, the Agile development process -- which demands human connectedness and is used for all mobile app projects at iTexico – is greatly improved by the proximity of Guadalajara and other Mexico destinations. A short flight to Austin or San Francisco means Mexico-based development resources can be in the room during critical points in the development process.
2. Cost effective: A Lilly and Associates study recently found that the landed cost of Chinese production has risen to 87 percent of U.S. costs, while Mexican costs have fallen to 75 percent – and continue to decline. Also, a quick flight to and from Mexico is far less expensive than the all-day affair involved in getting to Argentina or the Far East. The ability to have teams meet and collaborate is a plus when the market demands quick and efficient development to stay competitive. An expedited timetable also leads to an improved sales process, which is measurable on the company’s balance sheet.
3. Improved safety: As large multi-national companies make billion-dollar bets on Mexico’s supportive technological infrastructure, the Mexican government is extremely motivated to protect the investments and human resources. In fact, many U.S. cities -- St. Louis, Detroit and New Orleans -- ranked higher on the list of world’s most dangerous cities than Mexico City and Guadalajara.
4. Language and cultural considerations: The U.S. Census Bureau reports that more than 17 percent of the current U.S. population – about 54 million people – identify as being Hispanic. This creates an ideal atmosphere for collaboration among peoples who share the same values -- fostering a very hospitable, familial environment for Mexico-based nearshored resources. And many would agree that the Mexican command of the English language is significantly better than the less-natural dialects spoken by workers in the Far East.
Finally, for more on why Guadalajara is fast becoming the go-to place for nearshoring, take a look at TechCrunch’s article, which features iTexico CEO Anurag Kumar.
About the Author
This article was edited and updated from the original version.
Guillermo Ortega is the Co-Founder and COO of iTexico and has been in software development services for almost 20 years. Responsible for several CMMI appraisals and experienced in other software engineering models and best practices, he has founded 4 successful software companies in Mexico.