Nearshoring, a practice where companies relocate their operations to countries close to their major markets, has had a lasting impact on the global business landscape, bringing exciting investment opportunities and economic growth to nations. Mexico, with its strategic location and skilled workforce, finds itself at the epicenter of this global trend. However, a significant challenge that urgently needs addressing is the country’s regulatory framework concerning energy and its infrastructure.
Regulatory Obstacles
Efficient regulation and adaptation of transformers and industrial materials are crucial for the nearshoring process, especially in collaboration with entities like CFE and CENACE. However, the administrative process required to execute these procedures is notably bureaucratic and slow. With wait times of up to two months for processing and an additional two to three months for a response, accompanied by an extensive list of requirements, the process becomes a bureaucratic maze that hampers the execution and acquisition of necessary permits.
Infrastructure Hurdles
Another substantial challenge is the insufficient infrastructure, particularly in the electrical sector. To successfully carry out nearshoring, Mexico needs a robust and dependable electrical infrastructure to support companies’ operations. Unfortunately, Mexico’s electrical infrastructure falls short at the moment. The country grapples with frequent power outages and blackouts, which can have a devastating impact on businesses.
Overcoming the Obstacles
To fully capitalize on the nearshoring trend, Mexico must urgently tackle the regulatory and infrastructure challenges it confronts.
Streamline and simplify regulatory processes. Authorities need to streamline the permit and license acquisition process for nearshoring companies. This can be achieved by reducing the number of necessary steps, automating the process, and enhancing its transparency and efficiency.
Invest in electrical infrastructure. The Mexican government needs to make substantial investments in expanding and upgrading its electrical infrastructure. This will ensure that nearshoring companies have a reliable power supply essential for efficient operations.
Provide training and support for electronic infrastructure.
The government should also invest in training programs to cultivate the skills needed to operate and maintain electronic infrastructure. This will aid in improving the efficiency of regulatory processes and alleviate the burden on businesses.
Conclusion
Nearshoring in Mexico holds the potential to generate significant economic benefits for the country. However, to fully unlock this potential, Mexico must address the regulatory and infrastructure challenges it confronts. By urgently taking action to simplify regulations, invest in infrastructure, and provide training and support, Mexico can position itself as a global leader in nearshoring.
