Technology in Mexico Today – Fastest Growing Tech Hubs [2019]

Technology in Mexico Today

Why is the nearshore development industry boom in Mexico outpacing markets in Brazil and offshore markets overseas? You don’t have to look any further than the growing technologies local consumers are investing in –and- the startups and global technology giants investing back in Mexico.

So what are the factors driving the outsourcing market other than the flux in STEM students and higher education?

1. The Startup Factor

The startup factor started changing everything five years ago. Mexico has become one of Latin America’s fastest growing tech hubs with more than $1 billion in venture capital investments in the country in 2015 alone. Since 2014 $120 million has been invested in nearly 300 Guadalajara start-ups according to the Washington Post. And most of these venture capital investments started right here in the United States.

Jalisco exports $21 billion annually in tech products and services, according to the state’s innovation ministry. The city’s 12 universities, including the Tecnológico de Monterrey, fuel an IT powerhouse of 85,000 graduates each year.

It’s no surprise that Mexico is primed with the ideal working conditions for outsourcing development and technology startups. Between its proximity to the U.S., IP protection, NAFTA, and flexibility with visas and travel the region is primed for opportunities.

The North American Free Trade Agreement (NAFTA) promotes tariff-less commerce. The agreement also lets Mexicans obtain work visas (when they’re sponsored by an American business). Free trade has globalized and elevated the country’s growing middle class, an estimated 40%of the population. This generation of educated, skilled workers with English fluency is embracing new technologies.

2. Mexico’s consumers are more tech savvy than ever.

Well over half of Mexican mobile phone users now have a smartphone, (compared to just 6% back in 2010). The Android operating system dominates the quickly growing smartphone market of 54.4 million users. Why are these numbers surging so quickly? The cost of mobile services is becoming more affordable for the nation’s consumers.

The continuing decline of these costs and the increase in smartphone adoption is also driving Mexico’s mobile internet usage.

As the Mexican economy continues growing, so do the region’s computer sales. Developers in Mexico have split preferences gravitating towards MAC and PC just like their counterparts in the U.S., and software sales are growing.

Just last year, software sales in Mexico broke $3.8 billion and are likely jumping up to $4.9 billion in 2019%. The nation’s current eCommerce spending is catapulting at an annual rate of 25% annually. The technology boom in consumer and global spending has reached farther than software.

IT Services are also fueling the rapidly accelerating tech industry in Mexico. The sector broke sales of $6.2 billion last year, and this figure is expected to jump to $8.2 billion over the next two years.

3. The tech giants are coming.

For years, global businesses have been outsourcing manufacturing work to Mexico. In fact, virtually every auto manufacturer has set up shop south of the border. General Motors, Ford, Toyota, Honda, Volkswagen, Audi, BMW, Hyundai and Mazda all manufacture their vehicles there. Now the tech giants are moving towards the region also, following the nation’s rapidly growing pool of development talent.

The virtually tariff-less North American Free Trade Agreement (NAFTA) has drawn more businesses to Mexico. It’s not irregular for American companies to plant roots in Mexico where there are lower costs and fewer regulations.

Just last year, the Washington Post covered the tech boom south of the border, with major global players like Intel, IBM and Oracle opening offices in Guadalajara, (known as the country’s “Digital Creative City”).

And the increase in smartphone and internet users has meant more openings for tech giants. In fact, after spending billions to enter Mexico’s wireless market, AT&T stepped up their game south of the border.

In 2015, America’s second-largest wireless carrier closed a $2.5 billion deal to acquire the Mexican operator Lusacell, then expanded its footprint shortly thereafter with the $1.88 billion acquisition of Nextel Mexico from bankrupt NII Holdings. The combination of improved service, low prices and an expanding LTE network has enabled AT&T to gain a foothold in the market. And AT&T sees that as an opportunity to pursue more lucrative segments.

The Trends are Moving South of the Border

If you’re looking for a nearshore partner, the growth in Mexico’s tech market and development talent pool are undeniable. These are reassuring signs that the trends are moving south of the border and they are here to stay. Ready to talk about technology in Mexico today?

Click here to schedule a meeting with our team members in Mexico and the U.S. to learn how we can partner with you to keep your innovation moving faster.

About Tiempo Development

Tiempo’s nearshore business model has become hugely successful because we have been able to leverage the talent Mexico is fostering, making software development easier and more affordable. Our Mexico software development teams engineer powerful technologies that align with the goals and strategies of our customers for both their internal and public-facing development initiatives. Tiempo’s proprietary agile product-lifecycle management framework called Tiempo Quality System or TQS, is composed of principals and best practices that ensure productive client and team interactions. This proven combination of resources, process, technology knowledge, industry expertise, and strong leadership provides our customers with cost-effective solutions delivered quickly from a pool of highly successful Mexican STEM graduates and experienced engineers. Our technical focus includes Microsoft infrastructure and security such as .NET and MSSQL; Java, LAMP and mobile application development. Find out more about outsourcing software development by contacting Tiempo today.