Nearshoring in Mexico: a historic opportunity for the economy of the future 

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Mexico has a historic opportunity to take the technology industry in its territory to the next level, which will lead the economy of the future. Through globalization and current business needs, the phenomenon of nearshoring in conjunction with digital transformation is gaining strength by demonstrating that it can drastically improve business operations with countries of geographical proximity. 

Currently, foreign companies that seek to get ahead and innovate the quality of their work are finding great strategic and economic value in Mexico, due to its characteristics. One of them is the growing innovation that is born from human talent that is promoted internally, being the seed of the success of nearshoring and technological development in the country. 

This becomes more relevant when taking into account some specific data: according to the Council of Global Companies (CEG) (2023), nearshoring could generate up to 4 million jobs in Mexican territory by 2030, receiving between 30 and 50 billion dollars annually. Likewise, UNESCO (2022) states that approximately 75% of jobs in the coming years will be related to STEM knowledge. 

The latter represents a major challenge in the region, since, according to OECD data, the percentage of graduates from STEM careers in Latin America is between 34% and 45% of all professionals. Fortunately, Mexico is achieving an accelerated adoption of technological knowledge that will determine the path of industries and the use of the new economy. 

Now the democratization of skills and knowledge of technologies that will permeate every corner of life such as artificial intelligence (AI) in Mexico is a reality, through programs such as Intel AI For Youth, which promotes the talent of young technologists and the development of the industry in the country. Examples like these are increasingly common throughout the territory to connect the social and labor success of future generations with the business and economic success of the country, which is undoubtedly extremely attractive for nearshoring strategies in the national territory.  

This would unleash an economic boom, since Mexico, through nearshoring, is expected to increase its gross domestic product (GDP) up to 2.5% in the next six years, in addition to reaching foreign direct investment (FDI) levels of up to USD 50 billion (Ceeg, 2023). 

Therefore, these social and economic factors will improve the adaptability of any industry and minimize the risks of supply chains by not depending on a single territory, such as the Asian continent. Business strategies must now have a global and local vision that allows a positive flow in any scenario within a changing and globalized world. 

In the case of Mexico, this is a bilateral opportunity that extends inside and outside the country, since we have two great benefits: we are neighbors and the largest trading partner of the United States, the largest economy in the world, and a leader in technological innovation and, we serve as a bridge between North America and the rest of the countries of the continent. 

This allows a faster and more flexible flow for North American companies and Latin economies, which are already becoming aware of the added value of this geographical situation. This caused foreign direct investment to increase by 12% in 2022 compared to the previous year in Mexico, according to data from the Ministry of Economy, which portray the reality of nearshoring. 

With this, there is no doubt that Mexico is a key player in taking advantage of this panorama and fostering a continental union that strengthens our economies. One of the most important steps to achieve this would be to relocate the supply chains that are located in other continents, which would accelerate exports in Mexico by 30% in the coming years, according to Bank of America (2022). 

Specifically, considering that North America is ideal for technology issues due to its optimal access to energy, resources and talent, it is important to continue rebalancing the semiconductor supply chain, which is the fundamental component for any industry and technology in the world. Favorably, Mexico already participates in five of the six major phases of the chip development process: Research and Development, design, validation, assembly, and semiconductor testing. 

To give continuity to this path, nearshoring must be accompanied by the most innovative technologies that shape this historical moment. The business sector must be prepared to implement essential technologies such as ubiquitous computing, ubiquitous connectivity, cloud-to-edge infrastructure and artificial intelligence, which will be crucial for the economy of the future. 

Mexico has everything in its favor to become one of the leading countries thanks to its geographical, human and economic advantages. Undoubtedly, this historic moment requires great governmental, business and social awareness to get the most out of nearshoring in conjunction with the technology industry and have a positive reach in every corner of the world that improves the lives of all living beings. 

  Source: Forbes