ADVANCED FARE

Guadalajara is becoming a vital player in Mexico's high-tech industrialization process, with many top sector players flocking to the region.

Located in the state of Jalisco on Mexico's western coast, Guadalajara is a key site for Mexican industry. The driving force behind its global prominence is its electronics sector, which has given the region the nickname “the Mexican Silicon Valley." Since Jalisco became the site of the first semiconductor plant in Latin America in 1968, the region has been a leader in electronics production, exporting over $16 billion worth in 2010. A look at the state of the industry shows that, thanks to its strategic advantages, it should remain a central part of Mexico's economic growth for years to come.

A strong regional infrastructure is one of Guadalajara's biggest advantages. Located three hours from Manzanillo, Mexico's biggest port on the Pacific Ocean, the city has effective transportation infrastructure, including the country's second-largest airport. Its location is its biggest advantage when compared to its main manufacturing competitors in Southeast Asia. Governmental policy has also helped create a supportive business environment, with longtime incentives for foreign investment and, in 1994, the establishment of NAFTA to create tariff-free trade between the US and Mexico.

Global electronics manufacturers have taken note of this environment and flocked to the region over the past few decades. Investment spiked in the 1990s as NAFTA and a falling peso helped create an export-friendly environment. In 1997, a group of leading electronic companies including Hewlett Packard, IBM, and Intel founded CADELEC, a local chamber of electronic producers working to strengthen supply chain development. The region's strength helped it overcome the tech bubble of the early 2000s by shifting to more strategic sectors and introducing higher-tech manufacturing processes. Today, the region is home to eight of the top-10 contract electronic manufacturers worldwide and has a growing base of Mexican tech entrepreneurship with great potential for future success.

As the industry moves forward, reinforcing its strategic advantages will be essential for the continued growth of the sector. As Mexico's second-largest city, Guadalajara has great human capital. This size creates a base of workers able to work on production lines, but more important for the future of the industry are the thousands of skilled workers in the region; Jalisco has 12 universities that graduate 85,000 students every year. This creates a steady flow of talent that is able to work in tandem with Silicon Valley firms to exploit new niche areas, which the region must be able to do in order to remain globally competitive. The Mexican government has taken an active role in supporting technological innovation, but many feel that further work could be done to provide universities with additional capital for research and create more funds for Mexican entrepreneurs.
As the Guadalajara Advanced Electronics cluster continues to expand and mature, new opportunities for foreign investment will invariably arise. Thanks to a young and educated populace, long-established linkages with key international firms, and a robust infrastructure, the region looks ready to remain a global hub for the technology sector.