RIDING THE WAVE

Mexico 2018 | INDUSTRY | FOCUS: INDUSTRY 4.0

Several programs, research centers, and industrial clusters are synchronizing to fortify Mexico's digital industrial revolution.

Mexico is a world-class manufacturing hub, exporting more than USD1 billion worth of products per day according to ProMéxico, the country's exports promotion agency. Half of these exports are manufactured products. Factors such as a privileged geographical location, a wide array of free trade agreements, and a competitive labor force have contributed to the sector's success. Nevertheless, the ongoing fourth industrial revolution—dubbed Industry 4.0 or I4.0—entails the urge to adapt fast to maintain competitive advantages. In fact, according to the 2017 Global Industry 4.0 Survey developed by PwC, through digitalization, corporate leaders expect USD421 billion in savings per annum globally until 2020.

The core of the revolution is the interaction of digital systems with physical production systems through automation and digitalization processes. Therefore, cost competitiveness advantages should be leveraged with a long-term vision of a future where manufacturing and IT are intertwined. While Mexico currently lags behind pioneers such the US and Germany due to its limited ability to generate a comprehensive value chain and a lack of indigenous innovation, it is a clear leader in Latin America. Its automotive and aerospace sectors, highly sophisticated industries created in just a few years, already employ some of the most advanced technologies in their fields. Yet, most of these investments have come from large multinationals, whose strategy is already bearing fruit, and not from Mexican firms.

A consensus to catalyze the transition and guarantee that the economy moves forward at a single speed already exists between the government, private sector, and academia. Mexico has over 98 research centers related to advanced manufacturing and innovation, and 34 industrial clusters focused on Industry 4.0 technologies and Internet of Things (IoT) solutions. This includes an industrial design and big data cluster in Jalisco, intelligent factories in Chihuahua, and automaton technologies in Nuevo León. The creation of the National Laboratory of Additive Manufacturing, 3D Digitalization, and Computed Tomography (MADiT) located at the National Autonomous University of Mexico is also a milestone.

Many federal and state policies have been designed to stimulate the adoption of I4.0. The general framework is the Innovative Development Program Strategy, where the Mexican government listed its strategy for increasing value-added exports through the creation of clusters and industrial parks. Mexico has 23 information technology clusters in 27 states, which encompass 1,340 players, jointly reporting a total billing of USD2.1 billion. The following step is the creation of two hyper flexible manufacturing clusters between 2019 and 2022. This move is aligned with the rising trend towards medium-sized industrial facilities producing customized items, requiring a large variety of parts.

León is the industrial heart of Mexico and is the pioneering state for implementing I4.0 programs. The state's “Nuevo León 4.0" program aims to create an ecosystem where the public and private sectors as well as academia cooperate. The goal is to make Nuevo León the Industry 4.0 capital of Latin America. For that, a MXN160-million pilot fund to promote IT innovation among SMEs was launched in 2017. Moreover, fiscal stimuli are offered to companies repatriating Mexican skilled workers. In early 2018, the construction of the Center for Industrial Innovation (Lab Industria 4.0), specialized in machine learning, started.
Within the private sector, many are leading in-house, applied-research initiatives to propel fourth revolution efforts. Projects such as GE-IQ lab, by General Electric, the Ford Design Center, and Volkswagen's Innovation Campus, among many others illustrate this growing trend. Honeywell has established research centers and facilities in Mexicali, Baja California, which works on systems integration of aeronautic components.

Mexico was the guest of honor at Hanover Messe 2018 in Germany, arguably the leading industrial technology trade fair and the event where the term “Industry 4.0" was coined. Hopes are that this event will help raise public and private investment in R&D to a level where the whole country will be able to ride the fourth industrial wave.