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Mexico 2015 | TELECOMS & IT | FOCUS: MONTERREY IT CLUSTER

The Mexican economy has followed a clustering trend over the last years after the arrival of several original equipment manufacturers (OEM), especially into the automotive industry.

To enhance productivity, Mexican auto parts SMEs started a process of geographic concentration that has moved the country up the global value chain. The success of this model has made Mexico the largest car manufacturer in Latin America, and attracted a large amount of FDI.

This industrial trend is catching on in other sectors that are less labor intensive and more related to the knowledge economy. Industrial clustering in the IT sector presents the opportunity to strengthen Mexican SMEs and make them more competitive in the global and domestic market. A good example is the Monterrey IT Cluster, which is made up of 36 SMEs in the Northern state of Nuevo León. Here firms realized that working together could be more beneficial than going solo.

The Monterrey IT Cluster has taken several steps in the last years to consolidate its companies into a single entity. As a result, the sales of its 36 firms increased by 5% in 2014 thanks to this new organization, according to the president of the Monterrey IT Cluster, Humberto García.

In an interview with TBY, García defined the cluster as a “jewel in the rough” that has yet to tap its full potential. “Right now we are going through a maturing period that will give its fruits soon”, said García, who estimates that 5% growth should continue well into the future.

With a workforce of nearly 2,000 engineers working at relatively new firms, these businesses see the cluster as an opportunity to compete to against the major IT firms, as well as a way to come up with more appealing bids when going after tenders. Clustering also increases the number of potential customers available to these firms.
These strategies are “important steps” in the last years that highlight the cluster as a center of reference in the challenging Monterrey IT industry. The Northern city has over 600 IT companies that compete for a market that moves about $600 million, according to García.

The inflection point for the cluster was the creation of a building in 2011, where the majority of the 36 companies have an office, located inside the Research and Technology Innovation Park (PIIT). The infrastructure has about 14,000 square meters and cost around 250 million Pesos.

One of the companies that first moved its offices into the building was Axen. “This cluster improves our capacity for working together because it is easier for to meet other CEOs from different companies,” the CEO of Axen, Adriana Sáenz explained to TBY. Nevertheless, Sáenz thinks that the main challenge that the cluster faces is achieving better coordination among its members.

“Clusters for the automotive industry make a lot of sense, as several companies build different parts for their cars. In the IT sector several companies offer the same products,” she added.

Other CEOs concur. One of them is Genaro Rodríguez from Northware, a firm specialized in software and applications development that has about 100 engineers.

“There is still a lot of work to be done but there are many initiatives on the way to foster collaboration among us”, he commented. Among other strategies, the companies sometimes share their teams when another firm lacks personnel to complete a project or even needs a very specialized worker in a specific area. Those activities are steps forward to make the organization work as a single organism.

And that is García's goal. Appointed as president in late 2014, he is working to bolster the co-working culture that will let companies work as one single entity, thus giving the firms he represents a more prominent presence in Mexico´s IT industry. The cluster, he hopes, will become a one-stop shop for future customers.
“We have built an airplane, we just need to make it fly,” he concluded.