News, Insights and Best Practices for Manufacturing in Mexico

What technology investment in Mexico means for manufacturers

18 Aug 2015

Category: Manufacturing in Mexico

Mexico's economy is booming and industries across the country are catching on to the benefits of growing their businesses within its borders. As noted by TechCrunch, innovators and investors within the tech industry are realizing the value of expanding in Mexico, leveraging the country's focus on Internet infrastructure, mobile communications, ecommerce, financial services and education.

As a result, Mexico has seen an increase in venture fundraising and investing from both U.S. and international investors. TechCrunch stated the Latin American Private Equity & Venture Capital Association ranked Mexico third behind Chile and Brazil for investors. LAVCA also reported that in 2014, the country saw a 102 percent increase in venture capital deployment and a 63 percent increase in the total number of investment deals.

While the country's focus on the tech industry is a motivating factor for investors to put their money there, the emphasis also speaks to the economic health, opportunities and working environment that make Mexico an ideal location for a wide array of industries. 

"Mexico has seen an increase in venture fundraising and investing from both U.S. and international investors."

More manufacturing jobs
As the technology sector continues to expand in Mexico, the manufacturing industry will continue to grow and more jobs for both high- and low-skilled labor will become available. A burgeoning technology sector means the demand for electronics manufacturing will rise.

TechCrunch also reported Amazon began selling physical goods and introduced third-party marketplaces in Mexico in late June. As more companies move to Mexico with fulfillment needs, an increase in manufacturing jobs will prove to be an indirect result. Further, as technology and education become more widespread in the country, manufacturing will also become more accessible and beneficial within all industries.

A more connected manufacturing sector
One of the most significant implications of capital investment in Mexico's technology sector is the impact those technologies will have on making Mexico's manufacturers more connected and efficient. In fact, Area Development cited growth in mobile connectivity as a key factor contributing to the appeal of manufacturing in the country: It cited AT&T plans to invest $3 billion to extend its high-speed mobile Internet service to Mexico and cover 100 million consumers and businesses by the end of 2018.

Capital investment in Mexico's manufacturing sector is also largely driven by the ability of manufacturers to create efficiencies using technology. IndustryWeek lists greater capital investment as one of the top five manufacturing trends that will shape the market in 2015, noting manufacturers are capturing these deals through innovation and a focus on upgrading plan equipment and technologies.

Cell phone illustration with text reading, "It cited AT&T plans to invest $3 billion to extend its high-speed mobile internet service to Mexico."Tech companies investing in Mexico has major implications for manufacturers.

Cloud technologies, education, mobile connectivity and Internet infrastructure are all outputs of the country's tech scene that will help fuel efficiencies and growth within the manufacturing sector. Forbes shared research conducted by Plex Systems that underscores this relationship. According to the report, 40 percent of manufacturers interviewed draw a direct correlation between cloud technology and their ability to innovate during the next five years, and 93 percent of manufacturers are using consumer tablets in their manufacturing operations. As such, the tech and manufacturing industries are both essential to each other's success in Mexico, and a rising tech scene means manufacturing in Mexico will become increasingly appealing over the next few years.

Ultimately, rapid growth of tech sector investments speaks volumes to the economic health and growth that is taking place in Mexico. Confidence in Mexico is not exclusive to tech or manufacturing, rather, it spans all industries because of the steps the government has taken to make the country move appealing for both investors and the businesses that will be operating there.

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