Destination Mexico

thesauce.net.au

14 January 2014. 

Mexico is slowly emerging as the outsourcing capital of Latin America.  Due its proximity to the US, it is expected to benefit from US corporations looking to near shore their outsourcing projects. Most of the focus is on IT outsourcing, with 600,000 people are working in IT already, but BPO is expected to grow significantly in the coming years.

Frost and Sullivan predicts that Mexico’s IT infrastructure market might grow to $899 million by 2017.  A stable economy and the willingness to outsource non-core IT activities is boosting market prospects.

With a large graduate pool, (130,000 engineers and technicians alone) various government sponsored investment incentives, geographical and cultural affinity with the developed world, and an open market policy, according to Everest Research, Mexico offers an attractive proposition for organisations seeking a suitable destination to setup delivery centres.

With a GDP of $US 1.8 Trillion Mexico is the 10^th biggest economy in the world. Mexico is the tenth largest oil producer in the world, the largest silver producer and is considered both a regional and middle power.

 According to Goldman Sachs, by 2050 Mexico is expected to become the world’s fifth largest economy
However, there some issues that may hold Mexico back. Stability has been raised as a major concern, where Mexico has experienced rampant drug related violence in some areas in recent years.

Another are that may impact Mexico’s rise as a BPO destination is the level of sufficient English-speaking skills.

Overview of IT – BPO Service Sector from Everest Research

 

• Mexican IT/BPO industry market has grown at a CAGR of 12% in the past four years with export growth surpassing the domestic IT/BPO services market.
• Key drivers for growth are time zone similarity, proximity to the United States, and bilingual capabilities.
• Mexico’s global services sector currently employs more than 600,000 FTEs and grew steadily CAGR of 4%.
• It services is largest in terms of current scope of services being delivered, however BPO services are also growing.

Mexico ranks favourably on factors such as economic stability and currency movements in comparison to other locations in Latin America.