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PULSE MAGAZINE | IAOP PULSE Outsourcing Magazine, Outsourcing Mexico, PULSE Outsourcing, Outsourcing Magazine, Kate Tulloch-Hammond, Neo Group, Supply Wisdom
IAOP PULSE Outsourcing Magazine, Outsourcing Mexico, PULSE Outsourcing, Outsourcing Magazine, Kate Tulloch-Hammond, Neo Group, Supply Wisdom
IAOP PULSE Outsourcing Magazine, Outsourcing Mexico, PULSE Outsourcing, Outsourcing Magazine, Kate Tulloch-Hammond, Neo Group, Supply Wisdom
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SITE TRACKER – MEXICO

A country ripe with aspiring entrepreneurs, a well-educated workforce, and a new generation of millennials, post-millennials and their 30- to 50-year-old trailblazers, Mexico is witnessing entrepreneurial, blue-chip and tech booms at all levels of society, including government, industry, services and academia. This is the icing on the cake of Mexico’s fast-track rise as an outsourcing destination, which has seen tremendous growth over the past decade … and not solely due to its nearshore location to the United States.

THE GOOD 

Many factors contribute to Mexico’s growing industry. Its highly-educated workforce with diverse skillsets and bilingualism, infrastructure, proximity to the U.S. and government support are just a few of the top reasons.

 

Workforce

In recent years, Mexico has seen an abundance of experienced and highly-educated service providers. With a network covering the entire country, some of the major IT-BPO service providers come from organizations that include Sofftek, IBM, HP, Alcatel-Lucent, Tata Consultancy Services, Infosys, Wipro, Accenture, etc.

 

While the country is mostly Spanish-speaking, Mexico’s English-speaking workforce is fairly large, about 16 million. Three years ago, it launched ‘Project 100,000,’ which sends 100,000 of its students north to the U.S. for short-duration, intensive English language courses. (1)

 

Infrastructure

With continuous attention paid towards infrastructure initiatives, there has been considerable progress on the infrastructure front.

  • Internet – the number of secure internet servers in the country rose from 1,000-plus in 2006 to nearly 4,300 in 2014 (2)
  • Electricity – market reforms that include private players in power generation are likely to strengthen the overall power scenario in the country (2)
  • Commercial Real Estate – the office space market is expected to grow 40 percent by 2018, with an expected additional 10- to 11-million square feet of space before 2020 (2)

Enrique Peña Nieto, President of Mexico, has planned spending of $300 billion on major infrastructure projects to strengthen the country’s economy. Funding will go toward transportation and communication during his current tenure (2012-2018) and will include high-speed rail projects, additional development for the Mexico City Airport, improvements to ports, completion of primary highways/roads, and advancements in Internet infrastructure. (3)

THE BAD 

In the past couple of years, Mexico’s economy lagged behind, due mostly to low oil prices and reduced external demand. In August 2016, Mexico’s sovereign credit outlook was lowered from “stable” to “negative” by Standard & Poor’s, signifying a possible further downgrade over the next two years.

 

Corruption, High Crime Rates and Violence

Despite an improvement in its ranking on the Corruption Perceptions Index, its long-standing corruption continues to have a bad effect on investments in sectors such as security, education and health. The U.S. Overseas Security Advisory Council (OSAC) came out with its ratings, stating the overall crime and safety situation in Mexico as ‘critical’ and above average. The most frequently reported crimes include the big four: armed robberies, kidnappings, car thefts, credit card fraud and more. Methodical and efficient steps must be taken to improve the quality of life in the country to counter these ratings. (4)

 

THE FUTURE

Despite economic challenges, Mexico’s IT-BPO Sector is thriving, forecasted to continue at a compound annual growth rate (CAGR) of 11 percent between 2016-2018, and estimated to reach $26 billion by the end of 2018. Startups in the country are also booming, especially in the Financial Technology sector, with popular names like Aspiria, Banlinea, Chapulin, Clip, Eiya, Kiwi, Prestadero and more. Mexico City and Guadalajara will see competition booming from other regions of the country. (5)

 

In the Doing Business 2017 Report by the World Bank, Mexico ranked 47th out of 190 countries with noted improvements areas such as dealing with construction permits, enforcing contracts, registering property, and resolving insolvency. According to the bank, Mexico has the most advantageous business atmosphere in all of Latin America. (6)

 

Story by: Kate Tulloch-Hammond

1 – 6: Supply Wisdom & Neo Group: Nearshoring in Mexico – Right Across the Border; Sandeep Suresh and Priyanka Nair – Authors.

 

About Neo Group: Founded in 1999, Neo Group helps organizations meet business objectives and address business challenges by leveraging global services and sourcing. To learn more about Neo Group, please visit www.NeoGroup.com.

 

About Supply Wisdom: Supply WisdomSM is a unique cloud-based service that provides data and intelligence for sourcing risk and opportunity monitoring of global countries, cities and suppliers. To learn more about Supply Wisdom, please visit www.SupplyWisdom.com.

Three years ago, Mexico launched ‘Project 100,000,’ which sends 100,000 of its students north to the U.S. for short-duration, intensive English language courses.
The number of secure internet servers in the country rose from 1,000-plus in 2006 to nearly 4,300 in 2014. Market reforms that include private players in power generation are likely to strengthen the overall power scenario in the country.
Enrique Peña Nieto, President of Mexico, has planned spending of $300 billion on major infrastructure projects to strengthen the country’s economy.
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