NEWS
Mexican universities stress IT education to compete with India and others
- Marketing effort pitches 'near-shore' advantage; colleges stress IT training
- By Bob Keefe, Cox News Service
May 29, 2006
TIJUANA, Mexico - When you think of high-tech countries, Mexico probably isn't the first to come to mind.
Mexican cities like this one are known more for their sweatshop-like maquiladoras that churn out cut-rate shoes and shirts, not state-of-the-art factories making semiconductors and software.
But in an effort to catch up with other parts of the world, Mexico is trying once again to beef up its technology sector.
In Mexicali, near the Arizona border, U.S. developers are building an industrial park to lure semiconductor makers and other high- tech companies that might otherwise end up in Taiwan or China.
At college campuses here and throughout the country, administrators are putting technology training at the top of the syllabus to compete with high-tech talent in India and Israel.
Young Mexicans hoping for good wages are responding. About 400,000 students are enrolled in information technology-related programs in Mexican universities. The schools produce about 60,000 new IT-trained graduates each year.
The Mexican government, meanwhile, is trying to sell Mexico as tomorrow's technology hotbed.
At the World Congress on Information Technology in Austin, Texas, this month, Economy Minister Sergio Garcia de Alba unveiled a $2 million marketing campaign that positions the country as a "near-shore" alternative to the Far East's "offshoring." The campaign targets companies in Texas, Florida, California, Illinois and New York.
Mexico's pitch: Wages and other costs are as cheap as in the Far East. But sharing a hemisphere and time zones with the United States means cheaper and quicker transportation, among other advantages.
The campaign is just the latest part of a comprehensive government program to rebuild Mexico's technology sector.
"Unfortunately, we wasted (many) years," Garcia de Alba said in a brief interview. "But it's not too late. We want to get every year a bigger part of the cake."
A vibrant tech industry is important not only to Mexico. It could help ease the problem of illegal immigration to the U.S. A lousy economy and low-paying jobs often are cited as the primary reasons that thousands of Mexicans leave their country each year and illegally sneak into the United States looking for work.
Technology industry wages here are still low by U.S. standards - a starting electrical engineer can expect to earn about $15,000 a year. But that's still twice the per capita income in a country where 40 percent of the population lives below the poverty level.
Mexican authorities, meanwhile, are beginning to realize that an economy based on agriculture and low-tech assembly work simply can't be sustained in the changing world market.
"The low(-skilled) services are now going to other markets like Asia or Africa," said Sergio Carrera, Mexico's director general of domestic commerce and digital economy. "It's very important that we move our economy toward more value-added industries and services."
Of course, catching up won't be easy, given the head start other countries have.
"It's a little too little, a little too late," said Kevin Gallagher, a Boston University professor who studies economic development in Mexico and other Latin American countries. "They have to strike the right balance, and I don't think they're doing it."
It wasn't too long ago that Mexico was a rising star of high-tech. In the late 1980s and early 1990s, the country attracted scores of companies, ranging from computer and automotive electronics assembly operations to software and semiconductor development firms.
Guadalajara still calls itself the Silicon Valley of Mexico. Companies such as Hewlett-Packard Co., IBM Corp. and Solectron Corp. all are big employers there.
But like parts of the United States, Mexico was hurt badly by the outsourcing of high-tech jobs to Asia. Mexico actually was hit harder, because the offshoring trend began just as Mexico was grappling with high inflation and other internal economic problems.
Tech companies soon learned that Asian countries had other advantages over Mexico. India, Taiwan and other countries all had invested heavily in education, offered better tax breaks and other incentives, and made a concerted effort to recruit and keep foreign companies - all things that Mexico didn't do very well, according to Gallagher.
"They had a maquiladora mind-set," he said. Mexican government officials thought that "if you get companies here, they'll stay and everything will take care of itself."
Mexican officials say they got the message. About three years ago, the country launched a far-reaching program called Prosoft designed to develop its high-tech economy.
Working with 110 universities in 26 Mexican states, the government invested millions to create better information-technology training programs.
It also passed a series of incentive programs that can give qualified high-tech companies tax abatements, up to a 50 percent match for employee training programs and tax credits of up to 30 percent for research and development expenses.
The Mexican government has invested about $100 million in the Prosoft programs and incentives, Carrera said, on top of $300 million or so in matching grants from states, municipalities and companies.
Now, with an army of better-educated workers and an arsenal of incentives, government officials say they're finally ready to start marketing Mexico as a good place for high-tech.
The country is starting to make some headway.
Last year, Austin, Texas-based Freescale Semiconductor picked Guadalajara over sites in the U.S. and India for a new research and development center that now employs about 90 engineers and support staff.
Along with government incentives and employee training grants, the company was lured to Guadalajara by its universities and quality of life.
Last October, electronics manufacturer Solectron announced a major expansion of its nine-year-old circuit board and assembly operation in Guadalajara. Solectron Chief Technical Officer Dave Purvis specifically cited Mexico's nearness to the United States as one of the reasons for the expansion.
Earlier this year, IBM Corp., which started making typewriters in Guadalajara in 1975, opened a new "customer solution center" at its 500-employee storage drive and software development center there.
Even more notably, Hitachi Global Storage Technologies, a joint venture between IBM and Hitachi, recently returned some of its data storage manufacturing and research operations that it moved to China several years ago back to Guadalajara, according to The Associated Press.
At the 12,500-acre Silicon Border industrial park being built near Mexicali, meanwhile, developers say they expect to announce their first tenants within a few months.
"It's just a natural," said developer Ron Jones, a former Texas Instruments executive. "People can live on the U.S. side of the border and be to work in 20 minutes or do a one-day turnaround out of Austin or Phoenix or Silicon Valley. You can't do that with any other country."
By the numbers
400,000
Approximate enrollment in Mexican university information technology-related programs, from which about 60,000 students graduate each year
$15,000
About what a starting electrical engineer can expect to earn per year
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