The Mexican ICT market has substantially grown over the recent years, and so has its outsourcing potential. The country has reached $21B in IT services exports, making it to the top three IT services exporters in the world. Mexico attracts global enterprises like Amazon and Intel with its robust expertise, access to skilled talent, and innovative technology hubs.
What draws enterprises from North America and Europe to outsource IT operations to Mexico? And what tech hubs are the centers of IT outsourcing in the country? Scroll down to find the answers to these and other questions.
What makes Mexico an attractive IT outsourcing destination?
Over the recent years, Mexico advanced two positions on the Kearney Global Services Location Index, going from 13th to 11th place. The country outpaced Chile, Argentina, and other popular outsourcing locations in Latin America regarding expert availability, specialists' skills, and financial attractiveness. Besides a favorable business environment, what other advantages make Mexico a prominent IT outsourcing hub in Latin America?
Governmental support of the ICT domain
The local government has launched several initiatives to support the growth of the Mexican IT sector. Most of these measures focus on encouraging the development of tech startups in the country. Here are several examples:
- 500 Startups LATAM. Through this initiative, local startups from a wide range of domains can receive funding and mentorship for introducing new technologies.
- 20+ tech parks created by the local government have become centers for technological advancement and development. Most of the country's tech talent is concentrated in Creative Digital City, Guadalajara Software Center, Apodaca Technology Park, and Monterrey Technology Park.
- Fondo Nacional Emprendedor is another government-initiated funding for Mexican tech startups that is aimed at supporting innovation.
Favorable business climate
Project stability is directly related to the state of the economy of your outsourcing location. In these terms, IT outsourcing to Mexico is a secure option for businesses since the country has a steadily growing economy fueled by foreign investments.
The key reasons for the location's business attractiveness are its strategic location, large talent pool, as well as developed airport infrastructure. Mexico is home to 15 international airports, which makes the country an easy-to-get location for US-based businesses
Mexico is also a member of the Pacific Alliance and the North American Free Trade Agreement (NAFTA), which encourages international trade and investing. These agreements simplify the process of doing business between member countries by reducing or eliminating tariffs, taxes, and trade barriers.
The substantial economic growth is mainly due to the services sector, which, besides healthcare, education and other industries also includes the ICT domain. The services sector greatly contributes to the local economy, making up around 59% of Mexico's GDP.
In addition, Mexico holds high positions in international rankings on the business climate. For example, the destination has earned 60th place in the Ease of Doing Business list. This is the leading position in Latin America and the Caribbean.
Easy-to-get location and time zone overlap
For some organizations, the geographical proximity of their outsourcing destination is a vital factor in making a choice. Mexico shares a border with the US, which reduces travel time for on-site business trips. Another key advantage of working with software developers in Mexico is full or partial time zone overlap with major North American business hubs. The country's capital, Mexico City, has up to two hours of time difference with New York, Dallas, Chicago, and other American metropolises. Shared business hours make cooperation between enterprises and their nearshore teams more effective. The overlap in time zones enables real-time communication, which, in turn, results in streamlined processes and quicker decision-making.
Constant talent inflow
Although many enterprises hire tech specialists in Mexico, the IT outsourcing market in the country still meets the growing demand. The constant inflow of tech talent, fueled by a robust ICT education system, ensures a steady supply of highly qualified engineering specialists. The Mexican Ministry of Education reports that in the 2020-2021 academic year, around 38% of all undergraduates in the country enrolled in STEM courses. In recent years, Mexico has opened 120 tuition-free universities that graduate skilled engineering professionals. The governmental efforts result in consistent tech talent inflow, with over 130K engineers graduating in Mexico annually.
Cultural match and high English proficiency
Another significant advantage of IT outsourcing to Mexico is the country's good match with the US and Canada when it comes to tech cooperation. Due to geographical proximity, the countries have strong economic and cultural ties, which makes collaboration more effective and minimizes misunderstanding. According to Hofstede Insights, Mexican tech professionals value long-term commitment to projects. For businesses, this translates into reliable and stable partnerships with their remote Mexican teams.
English proficiency also contributes a lot to your outsourcing project's success. Miscommunications might lead to delays, which, in turn, results in extra spending. However, tech partnership in Mexico is one of the optimal options to avoid language barriers. Many international companies hire Mexican software engineers, so local professionals usually have good command of English
IT outsourcing to Mexico: Market insights
Mexico's emergence as a prominent innovation hub is evidenced by the presence of leading technology giants. Among the top players that have established R&D centers in Mexico are Intel, Google, and Microsoft, to name a few. Let's overview the factors that contribute to the country's attractiveness in the global outsourcing market:
Thriving tech climate
The Mexican government actively supports innovation by investing in connectivity and establishing technology hubs. As of August 2023, the country's Internet penetration is around 75% and will reach 89% by 2027. This figure is closer to the US where 92% of the population use the Internet, than to other major outsourcing locations. For example, in the Philippines, only around 56% of the population has access to the Internet, while in India, this figure is only 49%.
Due to governmental efforts to boost technology infrastructure and investments in research and development, Mexico appears in international innovation rankings. According to the Global Innovation Index, Mexico reached the 3rd position out of 18 economies in Latin America and the Caribbean.
Extensive tech talent pool
One of the key reasons why IT outsourcing to Mexico is an attractive option is the massive talent pool of tech specialists. Along with Brazil and Colombia, Mexico has made it to the top three in Latin America regarding high talent availability. The country houses over 700K well-versed IT specialists, residing primarily in Mexico City, Guadalajara, Monterrey, Tijuana, and Puebla. In addition, the country's capital, Mexico City, boasts the second-largest pool of outsourcing talent in Latin America, losing only to Sao Paulo.
Broad expertise range
Most enterprises that decide to outsource their IT projects to distant locations aim to fill in expertise gaps in their skillsets. If that's your primary request, choose Mexico as your outsourcing destination–the local talent pool is abundant with skilled professionals of different specializations. The most popular technologies in Mexico are C# and C++, with around 104K software developers having command of each programming language. Mexico also has substantial pools of DevOps professionals and frontend developers–approximately 9,900 and 9,400 experts specialize in each area, respectively.
Moreover, according to the Global Skills report issued by the educational platform Coursera, Mexican ICT specialists score high in numerous tech branches. Local experts demonstrate good results in tests on computer programming (93%), mobile development (79%), data management (97%), data visualization (96%), and other fields. High positions in international skill evaluation rankings also prove the strong expertise of software developers from Mexico. The country reached the 2nd position in the SkillValue ranking, leaving behind India, Vietnam, and other outsourcing destinations. Therefore, businesses that choose software development outsourcing to Mexico are unlikely to face issues related to service quality.
A large number of outsourcing providers
A substantial number of tech vendors in the country is an indicator of a thriving business climate. For businesses that outsource, this translates into a rich selection of opportunities–companies can tap into a wide array of services and specializations offered by various vendors.
As of August 2023, Mexico is home to around 460 software development companies, which makes the country a viable option for outsourcing IT operations. The main areas of expertise in the country's software outsourcing sector are mobile application development, web development, strategy consulting, and IT managed services.
Most of the clients of IT outsourcing providers in Mexico are enterprises from business services, finance, consumer goods and services, e-commerce, and healthcare industries. If you've firmly decided on IT outsourcing to Mexico, an optimal solution would be to search for a tech company with expertise in your or related domain. Such vendors are more likely to understand the specific challenges of your industry, thus providing tailored solutions that align with your business goals.
IT outsourcing hubs in Mexico
If you have firmly decided to build a tech partnership in Mexico, the IT outsourcing hubs should become the starting point for your search. Tech hubs offer the best opportunities for maximizing innovations, creating collaborative environments, and setting up startups. In the context of IT outsourcing to Mexico, these cities are often where tech firms set up their R&D centers and offices. Here are several leading Mexican tech hubs well-renowned for innovation and growth:
- Mexico City. The country's capital is home to over 180 established tech vendors and startups. The key focus areas of local enterprises are fintech, e-commerce, and software development.
- Guadalajara is a tech hub in Western Mexico that locates around 90 software engineering companies. Most of Guadalajara's tech initiatives prioritize software development, artificial intelligence, and biotechnology.
- With around 55 engineering vendors located in Monterrey, the city is emerging as a prominent hub for IT outsourcing to Mexico. The city has a developing ecosystem of startups in the fields of healthtech, fintech, and edtech.
- Tijuana is located only 20 miles from San Diego, US. It has recently become a hub for an increasing number of software development firms, as well as hardware and manufacturing enterprises.
- Puebla is home to a technology park Puebla's Parque Tecnológico Innovación, that hosts incubators and accelerators for local startups. The main specializations of local vendors are software development, e-commerce, and fintech.
For many organizations, it might be challenging to find the required expertise in an unfamiliar location. An outsourcing provider like N-iX can simplify this process by connecting you with top talent pools in Latin America, from countries like Mexico, Colombia, and others, all within your budget and deadlines. You can delegate time-consuming tasks to trusted tech vendors that will find the right expertise, conduct technical interviews, facilitate team management, and orchestrate seamless and efficient collaboration. For instance, N-iX has a development center in Medellin, Colombia, and access to talent pools in 25 countries across Latin America and Europe. Combined, these two factors enable us to promptly gather teams with diverse skillsets, ensuring a perfect match for your specific project needs. N-iX’s tech expertise spans a wide range of services: from Data Analytics and embedded software to Cloud and AI/ML. Apart from tech consulting and custom software development, our Solution Group conducts Product Discovery, helping clients define their business needs and creating the solution’s prototype.