J. Edgar Gómez and Dr. Robert Jackson, Accountancy and Information Systems
As Mexican companies enter the global market they discover how important it is to integrate advances in technology into their everyday business transactions. Software development is one of the areas of technological advances where great effort has been made. According to the Wall Street Journal (1), changes in technological development in Mexico are due in large part to the North American Free Trade Agreement (NAFTA) with the United States and Canada, that has attracted large amounts of foreign direct investment (FDI).
Since NAFTA was signed five years ago, U.S., European and Asian companies have poured more than $50 billion into the Mexican economy, making it a leading producer of automotive parts and electronic components.
Northern Mexico currently hosts some of the largest industry conglomerates of the country. This border region with the United States has greatly benefited by receiving significant FDI generated from NAFTA. One of the zones in Northern Mexico with high industrial activity is Monterrey, the capital of the state of Nuevo Leon. According to the U.S. International Trade Administration (2), Monterrey provides 39% of Mexico’s GDP, and has the second largest industrial base in the country.
Industry conglomerates in Monterrey are among the largest users of Information Technology in the country. In order to manage their everyday operations, these companies had to develop or purchase, in the last years, customized Information System. International as well as local Information Technology providers have benefited from these increasing needs to implement and maintain Systems in the industrial sector in Mexico. A few local providers are taking advantage of these opportunities becoming familiar with the latest technological developments, gaining expertise in the creation and localization of software, and developing strategic alliances with other local and foreign firms.
One of the main challenges the IT companies interviewed are facing is that of finding people to sustain their current growth. The executives interviewed in the Monterrey Institute of Technology and Higher Education in Monterrey are aware of this increasing need, and review constantly their technology programs to better fit the needs of the industry. Monterrey Tech graduates are helping the region to develop a stronger technology culture among business managers.
Although Mexico only represents about 0.6 % of the World’s Information Technology market, its proximity to the United States (37% of the world’s Information Technology market) combined with a general growth and globalization trend should allow for continued growth of this market, making it a good springboard for exporting to Latin American markets. The companies interviewed as part of this study are already taking advantage of these circumstances by opening offices abroad.
References
- Stephens, Bret. (2000, March 24). The World Champion of FreeTrade. Wall Street Journal, A1.
- Chiquini, M. Angeles Avila. Market for Computer. International Market Insight US Commercial Service. [On-line serial]. Available: http://www2.usatrade.gov/ website/MRD.nsf/MRDurl/IMI_MEXICO_CPT_MARKET-FORCOMPUTER_NT0000B93A