Mexico’s IT outsourcing industry will buck the regional economic headwinds and grow at a rapid pace in the months and years to come, according to Nearshore Americas’ latest report. The study, titled “Mexico: Nearshore Leadership Amid Shifting Realities,” discusses the sector’s massive real-world potential during the transformation currently taking place in the global market.
“Mexico’s IT outsourcing and business process outsourcing industries will enjoy a combined compound annual growth (CAGR) of 11% through 2018, continuing a trend that began in 2012,” states the report. “As a result, Mexico’s ITO/BPO industry will approach $26 billion in value by the end of 2018. At the same time, Mexican BPO/ITO will outpace the industry growth rate in Latin America.”
The report answers why international business leaders favor the country despite negative portrayals of Mexico by international media outlets. It cites the nation’s large population and highly skilled professionals as one key draw.
“Mexico’s talent pool is enormous,” said Sean Goforth, director of research at Nearshore Americas. “Mexico’s universities regularly graduate more than 100,000 engineers each year. And that talent spreads out across the country, a key differentiator for Mexico. The depth of talent across Mexico City, Guadalajara, and Monterrey — as well as smaller cities like Mérida, Tijuana, and Aguascalientes — gives plenty of options for sourcing talent.”
Mexico shares a border and time zones with the United States. More important still, it has business and cultural affinity with its northern neighbor. Today, given technological changes like the shift towards Agile software development, these factors are more important than ever, says the report.
On top of its strategic geographic location and large talent pool, Mexico is also seeing investment pour into the sector. With a booming startup community, venture capital funds have begun hunting for investment opportunities.
Regulatory changes have also made Mexico more appealing to foreign investors. Over the past three years, Mexico has reformed its telecom and labor laws. The result has been a drop in telecom prices as the sector has become more competitive, with the arrival of global players such as AT&T and Virgin Mobile bringing more options to consumers.
Meanwhile, a sluggish global economy and low oil prices have weakened Mexico’s currency, which is proving to be a blessing in disguise for many global service vendors.
The report says that those who understand the nuances of theses shifting realities in Mexico’s IT market will be best positioned to take advantage. It aims to supply this in-depth knowledge, offering on-the-ground perspectives of the nation’s evolving tech industries, expanding infrastructure, and emerging marketplaces. Home to global tech firms like Tata Consultancy Services and IBM, Mexico’s IT industry has a strong foundation and is adding new startups and digital-era companies everyday.
“Few other countries can deliver the full gamut of technology and business process outsourcing services from so many destinations.” states the report. “This is a key source of stability over the long run.”