In recent years, Mexico has emerged as a prime destination for companies looking to relocate their production operations closer to their target markets, in a phenomenon known as nearshoring. This strategy, which involves outsourcing services to geographically nearby countries, has posed a series of challenges and opportunities for the country in 2024, according to a study conducted by experts from Tec de Monterrey.
What is Nearshoring?
Nearshoring is a business strategy that involves relocating some or all commercial or information technology (IT) operations to a provider located in a geographically nearby country. In the current context, this has led to the relocation of production centers from places like China to Mexico, due to the proximity to the United States, one of the main consumer markets worldwide.
Challenges of Nearshoring in Mexico
According to experts, Mexico faces several challenges to fully capitalize on the nearshoring phenomenon in 2024:
1. Integration of value chains: Integrating the states in the central and southern regions with those in the north is crucial for optimizing value chains. Promoting the participation of small and medium-sized enterprises (SMEs) in these chains, along with large companies, is necessary.
2. Investment in electrical infrastructure: Ensuring adequate electrical supply for companies interested in establishing themselves in Mexico is fundamental. Furthermore, a redefinition of the country’s energy strategy, with a focus on clean energy sources, is required.
3. Security: Improving public and business security is essential to attract foreign direct investment and ensure a conducive environment for economic growth.
4. Water scarcity: Water management is a significant challenge, especially in regions like Nuevo León. An industrial policy addressing this issue and making these regions attractive for investment is needed.
5. Talent development: Promoting skills and talent development is crucial to maintain competitiveness and ensure equitable participation in the benefits of nearshoring.
6. Pollution and mobility: Addressing issues such as pollution and traffic congestion is essential to improve quality of life and attract investments.
7. Increased technological investment: The implementation of digital technologies will be key to optimizing operations, especially in border areas such as customs.
8. Financing for SMEs: Small and medium-sized enterprises need access to financing and technical support to expand their operations and ensure product quality.
Opportunities of Nearshoring in Mexico
Despite the challenges, nearshoring also offers significant opportunities for Mexico in 2024:
1. Job creation: Increased foreign direct investment can translate into the creation of better-paying jobs in sectors such as automotive, electronics, and manufacturing in general.
2. Boost to STEAM careers: Nearshoring will demand talent in areas of science, technology, engineering, arts, and mathematics, providing opportunities for professionals and students in these fields.
3. Opportunities for tech entrepreneurs: Entrepreneurs can capitalize on the growth of nearshoring by providing cross-cutting, financial, logistical, and technological services.
Nearshoring represents both challenges and opportunities for Mexico in 2024. To fully capitalize on this phenomenon, the country must address pending challenges while capitalizing on the opportunities it offers, with a focus on value chain integration, talent development, and the promotion of innovation and technological investment.
