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Tech Industry: Mexico Is More Than a Vacation Getaway

Posted by Steven Lopez
May 10, 2016 11:57:16 AM

Tech Industry: Mexico Is More Than a Vacation Getaway

When most professionals think of Mexico, the first thing that comes to mind are the beautiful resorts of Cancun and Cabo San Lucas. But to the world stage, Mexico is known as the technology center of Latin America. With close proximity to the United States, Mexico shares many of the same business values that have lifted its technology sector as a formidable global entity.

The Center of Investor Interest

Many major cities like Monterrey, Guadalajara, and Mexico City, Mexico have been the centerpiece of conversation for venture capital investments. According to research conducted by Latin American Private Equity and Venture Capital Association, capital investments in Mexico have increased dramatically to $978 million in the first half of 2015 from $403 million in the first half of 2014[1]. Much of these investments are placed squarely in Mexico’s fertile technology sectors, making it one of the fastest growing in Latin America[2].

Mexico has also seen major investments from major U.S. enterprises like IBM, who recently announced a $1.2 billion investment in opening the country’s first cloud centers[3]. The new cloud centers located near Mexico City aims to reinforce IBMs commitment to growing Mexico’s cloud markets, capitalizing on the country’s developing technology sectors.

Mexico Emerges as The Technology Hub of Latin America

Venture and corporate investments are met with a plethora of opportunity due to Mexico’s booming Science, Technology, Engineering, and Mathematics (STEM) workforce and private technology industry.

Surging STEM Workforce

The growth in venture capital investments is met with a growing STEM workforce that continues to place Mexico as a world leader in engineering and computer science. Recent studies by the World Economic Foundation found Mexico to have one of the highest graduation rates in STEM degrees with 113,944 graduates in 2015. This growth places Mexico ahead of Canada, the Czech Republic, and the Netherlands as the 8th highest producing country of STEM graduates in the world[4].

Along with a growing STEM workforce, major cities like Monterrey and Guadalajara are looked to as the “Silicon Valley of Latin America”. The cities host a booming startup culture with many major universities contributing to Mexico’s innovative technology industry.

Monterrey’s Financial Influence in Mexico

As a major city in Northern Mexico, Monterrey has a deep history of working closely with U.S. shipping companies along the Bay Area. This has cemented Monterrey’s place as the financial center of Mexico, hosting many of the country’s most reputable venture capital firms like Alta Ventures and Naranya Labs.

The city also hosts the Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM), one of Mexico’s consistently best schools for computer science and IT-related studies. According to QS World University Rankings, the engineering schools at ITESM are ahead of many other U.S. Universities like University of Virginia, Georgia Tech, Purdue, Arizona, and Wisconsin[5].

Guadalajara’s Technology-centric Culture

Similar to Monterrey, Guadalajara also hosts a world class engineering school in the Universidad de Guadalajara. The city was also one of the earliest to receive major investments from U.S. technology companies like Hewlett-Packard, General Electric, IBM, Intel, and Oracle in the early 1990s. Since then, these investments have grown to make Guadalajara one of the leading technology manufacturers and service centers in the world.

The State of Jalisco has recently made plans to invest $20 million for the construction of the Ciudad Creativa Digital in Guadalajara[6]. The facility will feature advanced co-working spaces, development and research labs, and other resources to strengthen the city’s growing startup culture.

Mexico’s technology sector continues to flourish, fostering close partnerships with many large U.S. corporations with a motivated IT workforce. Investments from venture capitalists, state and federal governments will continue to accelerate the growth of its technology sector, making it a global competitor in technological development and services.

Tiempo Development is a nearshore software development firm with locations in Guadalajara, Monterrey and Hermosillo. We offer pre-built teams made with experienced software engineers to start development immediately. All of our engineers are trained to utilize the latest Agile methodologies to develop the exact software that meets your needs. Learn more about how Tiempo Development the advantages of a nearshore business model and Agile methodologies by downloading our Agile and Nearshore as Methodology Whitepaper!

[1] “Investment in Latin America Surges Despite Adversity, Association Reports”. Latin American Private Equity & Venture Capital Association. http://lavca.org/2015/09/14/investment-in-latin-america-surges-despite-adversity-association-reports/

[2] Ibid.

[3] Andre F. and Karla O. “BM Opens First Cloud Center in Mexico”. IBM. http://www-03.ibm.com/press/us/en/pressrelease/45828.wss

[4] Jared W. “Mexico Is a World Leader in Engineering and Computer Science Grads.” Mexico IT. http://mexico-it.net/mexico-become-world-leader-engineering-computer-science-graduates/

[5] “The New York Times Ranks Tec De Monterrey as The Best University In Mexico”. Instituto Technologico y de Estudios Superiores de Monterrey. http://www.itesm.mx/wps/wcm/connect/ebs/egade+business+school+nd/news+home/news/news185

[6] Conrad E. “Beyond The Maquiladora”. Tech Crunch. http://techcrunch.com/2015/03/26/beyond-the-maquiladora-a-look-at-mexicos-startup-scene/


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