· Population: 112.3 million · Total workforce size: 46.1 million · Unemployment Rate: 4% · Literacy Rate: 93% · Official Language: Spanish · GNI Per Capita: $10,000 · AT Kearney Global Services Location Index: 6th of 50 · Ease of Doing Business rank: 35th of 183 · S&P's currency risk rating: A · Economist’s 2010 Democracy Index: 50th of 167 (Flawed Democracy) · Transparency International’s Corruption Perception Index: 98thof 178, score of 3.1 · National Language: Spanish · Selected as one of 8 LATAM countries to make the Gartner Top 30 Offshore Services Destinations · Salaries o Software Engineer: 26.6% of US o Senior Software Engineer: 30.5% of US o IT Project Manager: 41.9% of US o Junior BPO Resource: 30.9% of US o Skilled BPO Resource: 47.8% of US · Corporate Tax Rate: 30.0% of US Americans tend to view Mexico as a Third World country, which is technically the case, but Mexico also ranks as the 11th-biggest economy in the world. With an important economy so close to the U.S., it's no surprise that Mexico is a player in the global market for IT outsourcing services. "There is a very large, educated, young population. There are plenty of people available for the work, including skilled technical people," says Raymond Duran, an account executive in the Juarez, Mexico, office of GECIS Americas, an outsourcing vendor that's part of General Electric Co. "The talent pool is similar to the U.S. for a much cheaper price, at least a third the price," says Gary Taylor, controller for KPMG International's Dallas Accounting Service Center, which outsources accounting services and some programming to GECIS in Mexico. | Earthquake Rocks Central Mexico
MEXICO CITY 2:31 PM CST— A strong 7.6-magnitude earthquake hit Mexico on Tuesday, shaking central and southern parts of the country and swaying buildings in Mexico City. Plaster fell from ceilings and windows broke in the center of the capital, but the president said there were no immediate reports of major damage. The initial quake in Guerrero state was followed by a less powerful, magnitude-5.1 aftershock that also was felt in the capital. Frightened workers and residents poured into the streets of the capital just minutes after noon local time (18:02 GMT). Telephone service was down in the city and throughout the area where the quake was felt. "I have problems with pressure, I felt I was going to faint," said Rosa Maria Lopez Velazquez, 62, outside a mall in Mexico City. The quake was felt strongly in southern Guerrero state, where the epicenter was located about 15 miles (25 kilometers) from the city of Ometepec. Neighboring Oaxaca state also shook heavily, including two aftershocks. "It was very strong, but we didn't see anything fall," said Irma Ortiz, who runs a guesthouse in Oaxaca. She said their telephones are down, and that the quake shook them side-to-side. The U.S. Geological Survey set the intensity of the first quake at 7.6 and said the epicenter was 11 miles underground. The survey set the aftershock at 5.1. Mexico City Mayor Marcelo Ebrard's Twitter account said the water system and other "strategic services" were not experiencing problems. Looking Forward: Top Nearshoring Trends for 2012When Patrick Haller from Nearshore Americas asked ThinkSolutions for insight into how the nearshoring space will evolve in the next year, here's what we had to say:Nearshoring Trends for 2012 1. India’s total cost of outsourcing (TCO) continues to increase and the advantage gap over Nearshoring continues to close especially due to inflation and attrition differences. 2. Remote sourcing from LatAm, such as remote monitoring, will increase as technology continues to support it and India TCO rises. 3. There will be an added impact of the recent Free Trade Agreements (FTA) that improve upon the WTO’s General Agreement for Trade in Services, especially in Colombia. 4. Brazil will struggle to increase export of services due to internal demand from domestic growth as well as attention in preparation for the Olympics and other events. 5. Colombia will have an increased profile, a growing economy, free trade, improving security and stability. 6. Crime in Mexico will stabilize due to increased government pressure and US attention but will remain problematic in localized areas. 7. Small and mid-size US companies will exploit the advantages of Nearshoring. 8. There will be a trend towards consolidation of smaller LatAm IT firms into medium and larger firms to meet the needs of US based clients. 9. More firms will seek out LatAm for shared service centers as an alternative to offshore locations. 10. Indian firms will continue to expand into the LatAm region as global IT delivery strategies more frequently include Latin America. Read the full article here at Nearshore Americas. Mexico City Introduces Electric Taxi ProgramThe infrastructure in Mexico City continues to strengthen with new programs aimed at generating economic value and reducing the city's level of air pollution. As part of the "Green Plan" signed in 2009, Mexico City introduced its first 100 zero-emissions taxis. Gabriel Fernandez, CEO of General Electric in Mexico, spoke at the inaugural ceremony held at one of the new charging stations. "With the rollout of a quick-charge station like this one, the Mexican market is strengthening its energy security, driving innovation in clean energies, reducing dependence on oil and generating economic value for our inhabitants," she said during the ceremony, held at one of the stations.Read it here at FOX Latino. Mexico's Silicon Valley: Getting the Real StoryLet's face it - despite the fact that Mexico is 'close' to the USA, its unique IT talents, capabilities and achievements exist far from the spotlight of the IT business culture of the United States. But as the world continues its shift toward globalization, economically interwoven model - where cross-border bonds become deeply vital to sustaining a competitive position - the presence of Mexico at the doorstep of the US is becoming an important strategic opportunity for the next generation of IT services-focused enterprises.For example, tier one IT giants like IBM, Dell, HP, Intel, TCS and others have found a home in Mexico's Jalisco state, drawn by its powerful mix of IT talent, world-class infrastructure and stable economics. Jalisco, in fact, boasts over 12 nationally-recognized universities, 12 technological universities and 14 technological institutes. These schools graduate more than 6,000 engineers a year, and many of those students walk out of their university environments as fully bilingual professionals. Isn't it about time US business and IT leaders got to know the real Mexico? Come join us for a very special executive briefing on September 8th at The Roosevelt Hotel, where Nearshore Americas will host a business-driven discussion about the opportunities that Mexico and its thriving 'Silicon Valley" of Jalisco are offering to the world. Sponsors Event Details: Date: September 8, 2011 Time: 8:00 AM -11:00 AM Place: Roosevelt Hotel 45 East 45th Street New York, NY 10017 All attendees will receive a bottle of fine tequila and a $50 travel reimbursement.  Mexico vs. BrazilThe conventional U.S. wisdom today is that Mexico is a problem, and Brazil is an opportunity. The reality is that Mexico is less of the bloody, drug ridden mess that the media would lead the US to believe, and Brazil faces some serious issues that shouldn't be dismissed. For Brazil, underlying economic weaknesses like its huge income gap, high inflation, and a higher crime rate than Mexico (25 per 1000,000 homicide rate to Mexico's 14 to 100,000) threaten to undermine the country's recent economic boom. And too much negative attention surrounding Mexico's crime rates draws attention away from the country's positive economic growth and political reforms. Shannon O'Neil, Latin American Studies Fellow, gives a fair take on these two popular nearshore destinations. Read it here from CFR. Feature City: Aguascalientes, MexicoWhen thinking about doing business in Mexico, cities like Mexico City, Guadalajara and Monterrey immediately come to mind, but what of Aquascalientes? The state is home to 60 IT firms, including Hildebrando and Softrek, and has a low crime rate, modern infrastructure, and a growing talent pool. The workforce in the area is skilled and career-oriented, keeping attrition rates low, all for a lower cost than many other areas in Mexico. The problem? Lower salaries and a lack of outdoor activities and night life are keeping young people away from the city. This means that English language services are lacking. Ann Harts performed a market study of the city, and here's what she found: · The city is planned around three beltway loops allowing for ease of transportation and access · Electricity ring around city equals 100% blackout free · 7 fiber optic rings cover the city, providing 100% coverage · A lack of available real estate, but the government has not released any quantifiable data on this issue · The city and streets are very clean with a strong police presence · One of the lowest (if not the lowest) crime rates in Mexico · As of 2007 it is mandatory to teach English in the schools · English reading and writing skills are good, but spoken is average · 25+ educational institutions (colleges, universities) with 35,000 plus students · Eight museums · Four live performance theaters · Cultural centers · 55 movie theaters and an Imax screen Of the focus group respondents: · 86% have either lived in or recently visited the US · 100% have internet · 100% see English as the language of commerce and critical for future success · 100% viewed call center work as a career opportunity Read it here from Nearshore Americas. Mexico Trucking Deal to Lift Tariffs on US ProductsUS and Mexico officials Wednesday resolved a cross-border long haul trucking trucking dispute that will life punitive tariffs on about $2.4 billion in US products. The agreement ends a ban on Mexican trucks entering the US that lasted nearly two decades. Within ten days, Mexico will cut punitive customs duties in half and remove all duties by the end of the summer. The agreement will bolster trade across the border for manufacturing and agricultural goods while also increasing safety regulations. Mexico trucks must now carry electronic monitoring systems that track truck routes and hours of service, pass safety reviews, drug tests, and assessments of their English-language and US traffic sign-reading skill. Read it here from The Seattle Times Jet Blue Prepares to Offer More Flights to Latin AmericaJet Blue may become the airline of choice for companies with nearshoring strategies... JetBlue Airways Corp., with 65 daily trips to the Caribbean and Latin America, may fly to more distant international destinations as it adds fuel-saving winglets to planes and receives new Airbus SAS A320neo jets. The changes, along with replacing smaller Embraer E190 jets with bigger planes on some routes, will allow the New York-based carrier to fly farther and carry more passengers. JetBlue announced a $2.5 billion order Tuesday for 40 A320neos. The plan will allow JetBlue to expand its strategy of focusing flying in New York, Boston and the Caribbean. The carrier said it also is likely to use Airbus A321 aircraft it will receive to boost service on high-demand cross-country routes between New York and San Francisco and Los Angeles. Read it at Ashbury Park Press Mexico as a Nearshoring Technology PartnerMexico offers the dual advantages of proximity and cultural affinity. Time zone alignment with your local team in USA or Canada while outsourcing to Mexico is an important benefit. With a growing pool of technologically talented employees and reduced delivery costs adding to an already highly attractive package, outsourcers are looking closer to home in Mexico. This webinar will discuss key elements that can help enhance your team's efficiencies in an outsourcing engagement in Mexico. From government support initiatives to ease-of-trade agreements, we will break down cost factors as they apply to outsourcing in countries around the globe as compared to Mexico. You will discover why more delivery centers have opened in Mexico than any other country in Latin America. This timely webinar is designed to help you to negotiate and succeed in Mexico. You will listen to Geetha Ram, Principal Director, Texas Instruments, Inc., Luis Saldaña, VP, Business Development, Dextra Technologies and Bob Hartmann, Global Outsourcing Consultant & OI Senior Advisor and learn from their vast experience as the following topics are covered: The growth of IT and mathematics talent in Mexico What factors impact Total Cost of Engagement positively in Mexico? How does NAFTA encourage and improve your outsourcing engagements? As the nearshoring environment develops, you can not afford to miss this important webinar! Register now to gain the insights you need to outsource effectively in Mexico. Click Here to View the Webinar. Nearshoring... The MovieHow Violence in Mexico Affects NearshoringAs the buzz about drug cartels, tourist beheadings, and all sorts of political unrest rises, it threatens to undermine Mexico’s established credibility as a nearshoring destination. This article weighs the effects of rising violence against the country’s numerous benefits including a bilingual workforce, time zone alignment, and substantial cost advantages. You’ll also find advice that companies should take into consideration before investing in a nearshoring engagement in Mexico, or any other politically volatile region. Read it at Forbes. A.T. Kearney Global Services Location IndexPopular nearshoring destinations are gaining some ground according to AT Kearney’s Global Services Location Index. After an 18% wage decrease in Mexico, the country made its way to the top of the Latin American countries and ranked 6th overall. Chile, dropping from number 8 in the 2009 index, ranked 10th this year. Why did Chile drop? According to AT Kearney’s website, the rankings are assigned based on many factors including skilled labor, inflation, language capabilities, and infrastructure modernization. In the case of Chile, their resilience in the wake of a global economic downturn allowed the price of wages to remain stable. Relative to other outsourcing hubs, this made Chile’s cost of labor less competitive, but in the midst of global political instability, should the Global Services Index penalize a country for keeping their wages stable? The internet shut-down in Egypt had disastrous effects for BPO/ ITO centers reliant on a robust internet to succeed, and this turmoil occurred immediately after AT Kearney’s rankings placed Egypt 4th in the Location Index. Granted this type of problem is truly unpredictable, but how can companies account for political risk when choosing an outsourcing destination? In addition to consulting sources such as AT Kearney, invest in a political risk analysis of countries where critical business and IT processes are being supported. Compare the risks of occurrences, such as the Egypt situation, with the cost-savings and business benefits of using these locations. Saving 30% from your bottom line won’t provide the same utility if you risk not running your business properly for long periods of time. |
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