azcentral.com
My TurnSun Oct 13, 2013 6:48 PM
One lesson that I hope Arizona has learned from the Great Recession is that we cannot continue to create jobs and generate wealth purely on real estate. Perhaps the best way to ensure sustainable growth and job creation is to diversify the economy.
One way to diversify our economy can be summed up with one word: Mexico.
Tourism: It is clear that for our border communities, Douglas, Nogales, Ariz., and San Luis, Mexico and the Mexican visitor represent the lifeline for their economic viability. More than 60 percent of the sales tax generated in these communities is directly attributable to the Mexican visitor.
But a growing trend in the past couple of decades has been the movement of the Mexican visitor throughout the entire state. Last winter on a visit to Flagstaff I found myself listening to many Spanish speakers at local restaurants and in sporting-goods stores where they were acquiring winter attire and snowboards. Our professional sports, world-class resorts, malls and natural assets such as the Grand Canyon are destinations for thousands of visitors from Mexico.
Manufacturing: Over the past few years, North America has seen a new trend in manufacturing: re-shoring, or manufacturing operations that were originally set up in China that are now looking at Mexico and Latin America as a more cost-effective location to conduct business. Over the past decade, China has seen raising wages, troubling labor relations, continued concerns over the protection of intellectual property, ongoing challenges over quality control and a dramatic increase in the cost of trans-Pacific logistics.
For Arizona companies, Mexico is only a couple of hours by car, has a growing technically trained workforce, a business-friendly environment and dramatically more efficient cross-border logistics than China can offer.
Furthermore, when a U.S. company sets up a manufacturing operation in China, very little more than the finished product that returns to the U.S.
On the other hand, some estimates say that as much as 40 cents of every dollar spent on border operations in Mexico returns to the U.S.
Regional competitiveness: Arizona is now in competition not just with other U.S. states but also with regions and countries all over the world. The Arizona-Sonora-Sinaloa corridor allows us to offer a very cost-effective regional location for companies to set up research and development, manufacturing, marketing and distribution and logistics. It also provides a very efficient gateway to North America — the most lucrative marketplace.
The relationship with Mexico is strong and dynamic.
Last year we had about 42 million legal crossers (two-way traffic) at our ports of entry, and we are expecting that number to reach about 46 million this year. Last year, our ports of entry processed about 750,000 trucks carrying some $25 billion worth of goods.
Add to that the fact Mexico is a growing consumer market as the country’s middle class is expanding significantly.
Our proximity to Mexico is not our main asset but rather it complements our strong business and family relationships, our billions in trade and our millions of visitors that bring us together.
Our relationship with Mexico offers us a way of diversifying our economy and offers us the ability to ensure sustainable growth for the entire state.
One way to diversify our economy can be summed up with one word: Mexico.
Tourism: It is clear that for our border communities, Douglas, Nogales, Ariz., and San Luis, Mexico and the Mexican visitor represent the lifeline for their economic viability. More than 60 percent of the sales tax generated in these communities is directly attributable to the Mexican visitor.
But a growing trend in the past couple of decades has been the movement of the Mexican visitor throughout the entire state. Last winter on a visit to Flagstaff I found myself listening to many Spanish speakers at local restaurants and in sporting-goods stores where they were acquiring winter attire and snowboards. Our professional sports, world-class resorts, malls and natural assets such as the Grand Canyon are destinations for thousands of visitors from Mexico.
Manufacturing: Over the past few years, North America has seen a new trend in manufacturing: re-shoring, or manufacturing operations that were originally set up in China that are now looking at Mexico and Latin America as a more cost-effective location to conduct business. Over the past decade, China has seen raising wages, troubling labor relations, continued concerns over the protection of intellectual property, ongoing challenges over quality control and a dramatic increase in the cost of trans-Pacific logistics.
For Arizona companies, Mexico is only a couple of hours by car, has a growing technically trained workforce, a business-friendly environment and dramatically more efficient cross-border logistics than China can offer.
Furthermore, when a U.S. company sets up a manufacturing operation in China, very little more than the finished product that returns to the U.S.
On the other hand, some estimates say that as much as 40 cents of every dollar spent on border operations in Mexico returns to the U.S.
Regional competitiveness: Arizona is now in competition not just with other U.S. states but also with regions and countries all over the world. The Arizona-Sonora-Sinaloa corridor allows us to offer a very cost-effective regional location for companies to set up research and development, manufacturing, marketing and distribution and logistics. It also provides a very efficient gateway to North America — the most lucrative marketplace.
The relationship with Mexico is strong and dynamic.
Last year we had about 42 million legal crossers (two-way traffic) at our ports of entry, and we are expecting that number to reach about 46 million this year. Last year, our ports of entry processed about 750,000 trucks carrying some $25 billion worth of goods.
Add to that the fact Mexico is a growing consumer market as the country’s middle class is expanding significantly.
Our proximity to Mexico is not our main asset but rather it complements our strong business and family relationships, our billions in trade and our millions of visitors that bring us together.
Our relationship with Mexico offers us a way of diversifying our economy and offers us the ability to ensure sustainable growth for the entire state.
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