“Nearshore” outsourcing to Mexico for U.S. buyers offers the advantages of proximity, cultural affinity, timezone alignment, relatively lower costs, fast and simple visa attainment, ease of software and hardware procurement,and the legal and IP protection provided by the NAFTA treaty.
The decision of where to conduct business in Mexico, however, depends on your firm’s strategy. Some companies prefer the states with the largest population of IT professionals, such as Mexico City, Jalisco, and Nuevo Leon. Others prefer locations with a fast-growing IT industry, good universities and a friendly local environment such as Baja California, State of Mexico, Puebla, Sinaloa, Sonora and Veracruz.
The number of states participating in government sponsored IT initiatives has increased to 30.
State of Mexico
The State of Mexico is located in the heart of Mexico. It borders to the north and northwest with the State of Queretaro and Hidalgo; to the east with the State of Puebla; to the south, with the State of Morelos and the State of Michoacan, and surrounds Mexico City.
Main Cities: Toluca, Naucalpan and Tlalnepantla
Population: 14,000,000
Higher Education: Home of tree of the most prestigious universities of Mexico: the National Autonomous University, the State of Mexico University and a campus of the Monterrey Technology Institute. Close to the biggest campus of the National Polytechnic Institute. There are 172 public and private universities, 72 with IT careers.
Graduates from IT Careers: 5,200 per year
IT Infrastructure: Fiberoptics rings infrastructure, high bandwidth communications and MPLS, several providers.
IT Industry: The IT companies of the State of Mexico offer a large variety of services including IT consulting, data centers, infrastructure management, and application development and testing. Industry solutions focus on manufacturing and technology niches such as automotive, biotechnology, pharmaceutical, security, and computer aided design and other specialized services.
BPO services are also offered by the State of Mexico services providers. They include contact centers, data mining, help desk, market analysis, F&A services and loan application processing.
Why Invest in the State of Mexico?
The State of Mexico has a large number of already established multinational companies (automotive, metal mechanic, textile and clothing industry, food and beverages, chemical pharmaceutical industry, among others). The state surrounds Mexico City, with which it has practically merged.
The state population enjoys a high quality of life. There is a significant availability of qualified human resources, and the state has a high level of infrastructure that is continuously expanded.
The government of the State of Mexico is actively supporting foreign investments in IT, and offers a set of incentives and tax exemptions for investors, as well as cash grants as part of the ProSoft program.
With more than 14 million inhabitants living in 22,500 km2, we are the most populated State and the largest producer of manufactured goods nationwide.
Our state surrounds Mexico City, the country’s nerve center, with which we have practically merged. Together, we are one of the largest human conglomerates in the world with around 24 million inhabitants: together, we are the greatest regional economy in Latin America.
The State of Mexico has the largest, most complex, and heterogeneous educational system in the country, with more than 4.3 million students at all levels of expertise. Furthermore, in the current school year more than 32,000 students are enrolled in IT related programs, more than 12% of the national total.
The growth of exclusive residential areas, shopping malls, entertainment centers and cultural activities are proof of the quality of life enjoyed in our State.
All of these factors make the State of Mexico a definite option for an investment project. Nevertheless, we are still committed in making the State of Mexico increasingly more attractive and competitive everyday.
Why Invest in the State of Mexico?
The State of Mexico has a large number of already established multinational companies (automotive, metal mechanic, textile and clothing industry, food and beverages, chemical pharmaceutical industry, among others). The state surrounds Mexico City, with which it has practically merged.
The state population enjoys a high quality of life. There is a significant availability of qualified human resources, and the state has a high level of infrastructure that is continuously expanded.
The government of the State of Mexico is actively supporting foreign investments in IT, and offers a set of incentives and tax exemptions for investors, as well as cash grants as part of the ProSoft program.
With more than 14 million inhabitants living in 22,500 km2, we are the most populated State and the largest producer of manufactured goods nationwide.
Our state surrounds Mexico City, the country’s nerve center, with which we have practically merged. Together, we are one of the largest human conglomerates in the world with around 24 million inhabitants: together, we are the greatest regional economy in Latin America.
The State of Mexico has the largest, most complex, and heterogeneous educational system in the country, with more than 4.3 million students at all levels of expertise. Furthermore, in the current school year more than 32,000 students are enrolled in IT related programs, more than 12% of the national total.
The growth of exclusive residential areas, shopping malls, entertainment centers and cultural activities are proof of the quality of life enjoyed in our State.
All of these factors make the State of Mexico a definite option for an investment project. Nevertheless, we are still committed in making the State of Mexico increasingly more attractive and competitive everyday.
State of Sonora
The shores of the state of Sonora line the Sea of Cortez in the Gulf of California. The state borders the state of Chihuahua to the east, Sinaloa to the south and Baja California to the northwest; to the north it shares an extensive border with the U.S. state of Arizona and a shorter one with New Mexico.
Main Cities: Hermosillo, Ciudad Obregón, Nogales
Population: 3,100,000
Higher Education: The main institution of higher education is the University of Sonora (UNISON), There are 17 universities in Sonora, including 2 campuses of the ITESM (Monterrey Institute of Technology).
Graduates from IT Careers: 1000 per year
IT Infrastructure: Fiber‐optics rings infrastructure, high bandwidth communications and MPLS, several providers
IT Industry: The industry in Sonora has been oriented to automotive, aerospace and electric/electronic enterprises, and is now quickly moving into Information Technology. In November 2007, Sonora opened a fully operational Technology Park designed specifically for the IT Industry, with its 2nd phase already under development, and has two other Technology Parks in the planning stage.
Why Invest in Sonora?
Sonora is one of the Mexican border states that has been most successful in retaining its citizens and professionals because of its proximity to the USA. This proximity, in combination with the high number of talented professionals (usually educated in the USA), prominent use of the English language, and significantly lower operations costs in Mexico make Sonora an interesting prospect to attract investments, and a natural option to serve the U.S. West Coast.
The government of Sonora is actively supporting foreign investments in IT. Through its “Softlanding” program, Sonora has custom‐made, tax and non‐tax, built‐to‐suit packages that provide incentives depending on the purpose of the investment, job creation, and location within the state. The state participates in the proSoft program that provides cash grants to investors in IT technology in the state.
State of Sinaloa
Sinaloa is located in the north west of the Mexican Republic, 75% of its coast lines the Sea of Cortez while the other 25% lines the Pacific Ocean. Sinaloa shares borders to the north with the state of Sonora and Chihuahua, to the west with the state of Durango and to the south with the state of Nayarit
Main Cities: Culiacán (the Capital), Mazatlan and Los Mochis.
Population: 2,7000,000
Higher Education: 48 Universities and multiple specialization schools
Graduates from IT Careers: 3000 per year, high percentage of bilingual professionals
IT Infrastructure: Extensive fiber optics IP infrastructure, high bandwidth Internet, VoIP enabled
IT Industry: The technology sector of the state of Sinaloa is growing at a yearly rate of 300%.The main focus of the IT industry in Sinaloa is on Contact Centers and nearshoring of application development services. The state has one of the largest IT clusters in Mexico that gathers fifty five companies of an advanced IT maturity level. Many of the IT companies of Sinaloa are working in state supported IT technology clusters, and have extensive experience in developing applications for healthcare organizations, agriculture related industries, hotels, pharmacies, gas stations, car dealerships and educational institutions.
Why Invest in Sinaloa
Sinaloa is an excellent location for IT industry investments for global IT providers that want to establish a nearshore delivery center in Mexico with the low cost environment offered by a tier 2 location. The state is conveniently located very close to the US, and its time zone is CST. Daily flights depart from Culiacan to Los Angeles, Houston, Phoenix, Seattle and Denver, with an average flight time of 2 hours.
The state government offers generous incentives for investors in IT technology. In addition to the cash grants provided by the ProSoft program, the state provides tax reductions for the acquisition of real estate and storage facilities, as well as a special incentive based on the new jobs created by the investment.
State of Querétaro
The State of Querétaro is located in the heart of Mexico, just two hours away from Mexico City. It borders to the north and northwest with the State of San Luis Potosi; to the east with the State of Hidalgo; to the south, with the State of Michoacán and to the southwest, west and northwest with the State of Guanajuato.
Main Cities: Santiago de Querétaro, San Juan del Río and City of Corregidora (104,218).
Population: 1,7000,000
Higher Education: Home of two of the most prestigious universities of Mexico: the National Autonomous University and the National Polytechnic Institute. There are six other prestigious public and private universities, including a campus of the ITESM (Monterrey Institute of Technology).
Graduates from IT Careers: 1500 per year
IT Infrastructure: Fiber optics rings infrastructure, high bandwidth communications and MPLS, several providers
IT Industry: The IT companies of Queretaro offer a large variety of services including embedded software development, IT consulting, data centers, infrastructure management, and application development and testing. Industry solutions focus on manufacturing and technology niches such as biometrics, security, computer aided design and other specialized services.
BPO services are also offered by the Queretaro services providers. They include contact centers, data mining, market analysis, F&A services and loan application processing.
Why Invest in Queretaro?
Queretaro has a large number of already established multinational companies (in the aerospace, automotive and consumer goods cluster). The state has very competitive compensation costs and provides for a high quality of life. There is a significant availability of qualified human resources, and the state has a high level of infrastructure that is continuously expanded. Investors can leverage Queretaro’s centric geographical location and its proximity to Mexico City and to the US.
The government of Querétaro is actively supporting foreign investments in IT. The time to establish a new company in the state has been drastically reduced and the administrative procedures have been simplified considerably. The government offers a set of incentives, cost reductions and tax exemptions for investors, as well as cash grants as part of the ProSoft program.
State of Nuevo León
The state of Nuevo León is located in northeastern Mexico. It borders the states of Tamaulipas to the north and east, Zacatecas and San Luis Potosí to the south, and Coahuila to the west. To the north, Nuevo León has also a 9 miles border with the U.S. state of Texas.
Main Cities: Monterrey (capital), Guadalupe, and Apodaca
Population: 4,500,000
Higher Education: Monterrey is home to two of the nation’s most prestigious universities, the National Autonomous University of Nuevo Leon and the Instituto Tecnologico de Estudios Superiores de Monterrey (Monterrey Institute of Technology and Higher Education). Other reputed universities include the University of Monterrey (UDEM) and the Universidad Regiomontana. The state has 44 higher education institutions offering education to more than 111, 000 undergraduate students, and more than 10 000 students at the graduate level.
Graduates from IT Careers: 3000 per year
IT Infrastructure: Advanced high‐bandwidth, secure communications network, government supported research and technology parks.
IT Industry: Nuevo Leon is the home of some of the largest Mexican IT Services companies. Recently it has become one of the preferred locations for companies that offer nearshore IT services, and many large Indian IT service providers have established their delivery centers in the state.
The IT services offered by the local companies include custom software development and deployment, IT consulting, ITO and BPO services, development of videogames and support for SAP and Oracle solutions.
Why Invest in Nuevo Leon?
Nuevo Leon borders the US, and investors are attracted by an American‐style business culture; there is additionally a great availability of highly educated professionals, excellent infrastructure and a high quality of life. The state government offers incentives and tax exemptions to investors as well as cash grants provided by the ProSoft program.
Monterrey is the capital city of the northeastern Mexican state of Nuevo León and a municipality of the same name. Also known as “Sultana del Norte” (Lady of the North), the city is a modern industrial and business center. The city proper has population of 1.1 million, even though the metropolitan area of Monterrey has a population of 3.8 million.
Monterrey is a major industrial center among cities in Mexico , producing a GDP of 78.5 billion US dollars (2006). The city’s GDP per capita in 2006 was 21,788 US dollars. The city was ranked the 2 to do business in Mexico and in 2005 and currently is ranked as the third best by the América Economía magazine. Most of the major companies in Mexico, which are also large companies in the world, are headquartered in Monterrey.
As a result of its strong steel industry, it is often called “the Pittsburgh of Mexico”. The city has prominent positions in sectors such as steel, cement, glass, auto parts, and beer. In 1999 Fortune magazine recognized Monterrey as the best city in Latin America in which to do business. The magazine attributes its economic wealth in part to its proximity with the United States Mexican border and mentions Monterrey as a significant city with economic links to the United States.
The industrialization process was accelerated in the mid 19th Century by the Compañia Fundidora de Fierro y Acero Monterrey a steel processing company. Nowadays Monterrey is home of transnational conglomerates such as Cemex (world’s third largest cement company), FEMSA (Coca‐Cola Latin America), Alfa (petrochemicals, food, telecommunications and auto parts), Axtel (telecommunications), Vitro (glass), Selther (leading mattress and rest systems firm in Latin America), Gruma (food), and Banorte (financial services). The FEMSA corporation owns a large brewery, the Cervecería Cuauhtémoc Moctezuma that produces the brands Sol, Tecate,
Indio, Dos Equis and Carta Blanca among others. By the end of the same year, there were more than 13,000 manufacturing companies, 55,000 retail stores, and more than 52,000 service firms in Monterrey. Monterrey accounts for about 95% of the State of Nuevo Leon’s GDP, and 30% of Mexico’s manufactured exports.
The metals sector, dominated by iron and steel, accounted for 6 percent of manufacturing GNP in 1994. The steel industry is centered in Monterrey, where the country’s first steel mills opened in 1903. Steel processing plants in Monterrey, privatized in 1986, accounted for about half of Mexico’s total steel output in the early 1990s. [32]
Monterrey was ranked 94 worldwide and 5 in Latin America in terms of Quality of Life according to Mercer Human Resource Consulting (2006) [33], and was ranked number 2 in 2005 and number 4 in 2006, according to America Economia.
Monterrey is also a great city to do shopping. Some of the shopping malls in the city include, Paseo San Pedro, Plaza Fiesta San Agustín, Galerías Monterrey, and Galerías Valle Oriente, which distribute goods and services to the Mexican population.
Education
Headquarters of the UANL
Main entrance of the ITESMThe city in considered one of the main educational centers in Mexico. Monterrey’s population is the most educated in Mexico and the city on a per capita basis has more colleges, universities and institutes of technology, than any other Mexican city.
The Universidad Autónoma de Nuevo León (Autonomous University of Nuevo León, UANL), is the third largest Mexican university and is ranked by the Reader’s Digest AC Nielsen Survey 2005 as the top public university in northeast Mexico. Its main campus, Ciudad Universitaria (University City), covers approximately 67,630,000 square metres (17,000 acres). The UANL system comprises 26 colleges (faculties), 22 graduate divisions, 24 high schools, 1 center of bilingual education and 3 technical high schools.
Monterrey is the headquarters of the Instituto Tecnológico y de Estudios Superiores de Monterrey (Monterrey Institute of Technology and Higher Studies, ITESM or “Tec de Monterrey”), a private university ranked by the Reader’s Digest AC Nielsen Survey 2005 as the top university (public or private) in all Mexico. As the center of its own educational network, it has 33 campuses and exchange agreements with more than 400 universities world wide.
Founded in 1969 with the support of local leading multinational corporations such as CEMEX, ALFA, FEMSA, GAMESA, PROTEXA & CYDSA, the Universidad Regiomontana is a private university offering preparatory, undergraduate and graduate programs. With agreements with more than 200 universities across the globe, it is member of GATE (Global Alliance for Transnational Education), FIMPES (Federación de Instituciones Mexicanas Particulares de Educación Superior) and holds an ISO 9001 Certification. Its urban campus attracts many working professionals who complement and enrich the academic experience.
Other universities include University of Monterrey (UDEM) and the Universidad del Norte (UN).
Monterrey, a city of approximately 3.8 million people, was named by Fortune magazine as the best city in Latin America in which to do business.
Some 13,000 companies in Monterrey produce 9.4 percent of Mexico’s manufactured products.
If you exclude the telecom and oil monopolies (Telmex and Pemex), Monterrey controls more than half of Mexico’s total industrial assets.
The GDP of the State of Nuevo Leon is USD 48 billion. The total GDP of the seven states covered by the Monterrey office is approximately USD135 billion, which is higher than the GDP of Venezuela, Colombia, and Chile.
Imports into these seven states are very high due to the area’s strong manufacturing base, and geographical proximity to the U.S. Imports are estimated at USD 20 billion in goods alone, approximately 74% of which are of U.S. origin. This figure exceeds total imports into Argentina, Chile, Colombia and Venezuela. Local reps cover this territory, exposing your product to this important manufacturing base.
With more than 30,000 firms, Nuevo Leon is the production leader in many important sectors of the Mexican economy controlling:
75% of the national production of glass containers
60% of national cement production
60% of national, artificial, and synthetic fiber production
50% of national beer production
50% of national ceramics production
40% of the national production of basic steel
40% of household appliances
American Express, Amway, Baker & McKenzie, Bank of America, Carrier, Caterpillar, Chrysler, Donnelly, GE, GM, Honeywell, IBM, John Deere, JC Penney, Kohler, Korn/Ferry International, KPMG, Kimberly Clark, Lucent, Mary Kay Cosmetics, Pinkerton, Price Waterhouse Coopers, Trane, Toyota, Visteon, Wayerhaeuser, York
They are already doing business in Nuevo León.
State of Jalisco
The state of Jalisco borders the states of Nayarit, Zacatecas and Aguascalientes to the north; San Luis Potosi, Guanajuato and Michoacan to the east; Colima and the Pacific Ocean to the south; and the state of Nayarit to the west.
Main Cities: Guadalajara (capital), Chapala and Puerto Vallarta
Population: 6,800,000
Higher Education: Guadalajara is a very important hub for universities and educational centers with national and worldwide prestige, such as Universidad Panamericana, ITESO, Universidad de Guadalajara, Monterrey Institute of Technology and the Universidad Autónoma de Guadalajara (U.A.G.), among others.
Graduates from IT Careers: 18,000 per year
IT Infrastructure: Jalisco supports the creation and acceleration of IT Mexican companies and has developed a robust infrastructure for global companies to conduct business in and from Jalisco. The state has created advanced technology centers such as the Software Center, the Software and Integrated IT Services Park both in Guadalajara and the Media Park in the city of Chapala.
IT Industry: Guadalajara is known as the Mexican Silicon Valley. Over 70 international companies are offering advanced IT services including application design, development and testing, embedded software for the automotive industry, wireless applications, printers and medical devices, and multimedia.
Why Invest in Jalisco?
Jalisco has many leading IT and BPO companies with operations in the state, due to its convenient geographic location, qualified IT human resources and excellent infrastructure. The state population enjoys a high quality of life. The government provides a strong support for the IT industry with clear strategies that materialize through the ease of establishing new companies, investment incentives, tax exemptions and cash grants provided by the ProSoft program.
Guadalajara (is the capital city of the Mexican state of Jalisco, and the seat of the municipality of Guadalajara. The city is located in the central region of the state and in the western‐Pacific area of Mexico. With a population of 1,600,940 it is Mexico’s second most populous municipality. The Guadalajara Metropolitan Area includes other adjacent municipalities and has a population of 4,112,332 inhabitants, making it the second most populous metropolitan area in Mexico, behind Mexico City, and the 23rd largest metropolitan area of the Americas.
Guadalajara is situated at an altitude of 1,600 metres (5,200 ft), favouring it with a mild, spring like climate. It is one of the main centers of culture, economy, history, industry and religion in the country and exerts significant influence on the rest of Mexico and the Municipality of Guadalajara has the largest population of any city in the state of Jalisco with 1,600,940 inhabitants, according to the 2005 Census. However, the Guadalajara Metropolitan Area also includes the municipalities of Zapopan, Tlaquepaque, Tonalá, Tlajomulco de Zúñiga, and El Salto, which together totaled 3,967,252 inhabitants in 2005. Guadalajara is the second most populous metropolitan area in Mexico after Mexico City.
Guadalajara is known as the “the Mexican Silicon Valley,” due to its electronics industry. The city is the main software producer in the country, and also is a leading producer of electronic and digital components. Such high technology companies as General Electric, IBM, Intel, Hitachi, Hewlett Packard, Siemens, Flextronics and Solectron have facilities in the city or its suburbs
Guadalajara is home to eight of the top 10 contract electronic manufacturers worldwide including Solectron, Flextronics and SCI Systems, and original equipment manufacturers including IBM, ON Semiconductor, Hewlett Packard and Kodak. These companies, along with dozens of key suppliers, were attracted to Guadalajara because of its qualified labor force at all levels, a commitment by state and local government to continually improve infrastructure, education and other services for industry, and a high quality of life, including one of the world’s most favorable climates.
FDi magazine ranked Guadalajara highest among major Mexican cities, and designated Guadalajara as having the second strongest economic potential of any major North American city behind Chicago. FDI Magazine also ranked the city as the most business friendly Latin American city in 2007.
Guadalajara is a very important center of universities and educational centers with national and worldwide prestige, such as Universidad de Guadalajara (U.D.G.), Universidad Panamericana,
ITESO, Monterrey Institute of Technology and Higher Education and the Universidad Autónoma de Guadalajara (U.A.G.), among others.