SO FAR, SO NEAR

Mexico 2016 | ICT | FOCUS: NEARSHORING/BPO

Nearshoring has emerged as a viable alternative for US companies wanting high-quality outsourcing partners in the same time zone, and Mexico is taking full advantage of the opportunities.

Mexico has a large and growing industry of business process outsourcing, or providing IT services, for US companies that want to reduce costs. The government recently launched a “Mexico IT" campaign that seeks to promote the many benefits of the Mexican IT industry to US companies. After strong growth in recent years, the sector looks poised to become a cornerstone of the Mexican economy, providing a new source of highly skilled labor.

Mexico has a number of advantages that make it an ideal location for the nearshoring and BPO sector. Already a $20 billion industry that employs over half a million IT workers, an estimated 65,000 new professionals are expected to graduate each year from Mexico's technical and engineering schools. This talent pool, the largest in Latin America, is better able to interact with the key US market than similar setups in Southeast Asia thanks to closer cultural ties due to geographic proximity. Even small differences such as being able to operate in the same time zone as US firms gives the Mexican BPO market advantages in a field where constant communication and ease of collaboration is crucial.

The country's status as the regional and global leader in the BPO and nearshoring industry lets it function as a natural hub for Latin America, with more than 80% of the region's high-tech exports coming from Mexico. Strong governmental support for the sector provides additional security and assurance for foreign investors, as Mexico offers strong IP protections, free trade through NAFTA and the TPP, and policies such as tax credits for R&D and no VAT for exported services.