Guadalajara Wins the Minds then the Hearts of Trade Mission Delegates

The high levels of talent and collaboration potential of Guadalajara, and its proximity to the United States were among the factors that impressed a dozen U.S. and Latin America delegates on a tightly run investor mission organized by Nearshore Americas, which took place last week.

 The cooperation between the government, the private sector and academia in Guadalajara’s investment ecosystem was repeatedly cited as one of its greatest strengths, with representatives of all three sectors giving a compelling case for investment during a tour of the city.

Strong Collaboration

“We have a very strong link between the different private, academic and government entities in this ecosystem. It is extremely important to work together to make things happen,” said Federico Lepe, coordinator of foreign investment for the state of Jalisco.

Such strong levels of collaboration are very rare, said Enrique Cortes, executive director of Dell Latin America, recalling that when he first came to set up in Guadalajara, Dell’s fierce rivals HP actually shared information with him and accepted that Dell would hire some of their staff. They believed that “the bigger the ecosystem, the better it is,” Cortes said.

The ecosystem has certainly grown since then. Mexico is now the world’s fourth biggest BPO provider, after India, the Philippines and China, revealed Santiago Gutierrez, director of the National Chamber of Electronics, Telecommunications and Information Technology (CANIETI).

Guadalajara, state capital of Jalisco, is at the center of this BPO boom. Considered “Mexico’s Silicon Valley,” Guadalajara is home to over 650 companies and almost 100,000 employees in the hi-tech industry. Besides HP and Dell, industry giants IBM, Intel, Continental, Tata, iGate, HCL and Oracle all have offices in Guadalajara.

Local Talent

Guadalajara’s rich pool of talent was frequently cited by both the visitors and hosts as one of its major selling points. The city produces more than 5,000 engineering and technical graduates per year (the majority of whom speak excellent English) and it is home to dozens of universities, including the prestigious Tecnologico de Monterrey (Tec), the ITESO and the University of Guadalajara, Mexico’s second biggest public university.

Rodolfo Castello, Dean of the Tec’s Guadalajara campus, guided the visitors on a tour of the sleek and impressive facilities, including the university’s four-story technological park building, home to Dell offices as well as Metacube and New Art studios for visual effects, animation and postproduction.

Castello revealed the Tec has strategic relationships with dozens of top universities around the world, including MIT, Stanford and Berkeley. Its graduates have been described as “world class” by Bill Gates and “Ivy League standard” by the New York Times. Businesses housed in the technological park can take advantage of the Tec’s talent, Castello said, with university professors and students frequently involved in internships, joint projects and applied research.

Francisco Abedrabbo, vice president of Oracle’s Mexico Development Center confirmed Guadalajara’s universities are “very, very good,” noting that they have even “changed their programs to satisfy the needs of developers.” Cortes was equally enthusiastic, declaring that local talent is “good” and “strong,” and suggesting that “engineers in Mexico are more creative than in Asia.”

Abedrabbo added that Guadalajara is “one of the best places to live and work in Mexico,” which means it attracts even more graduates from Mexico City and Monterrey looking for a stable career path.

Ideal Location

Guadalajara’s proximity to the United States is another massive plus point. The city is only two hours ahead of the West Coast and a short direct flight from California, a relief to  many of the visitors who admitted that time differences with India or even Brazil have greatly hindered the ease of doing business.

Office space in the Software Center leased by IJALTI goes for just $17 US per square meter per month, often with desks and chairs included.

Low Costs

Another key point is that operating costs are low in Guadalajara, with a “definite advantage in terms of salaries compared to the United States,” Abedrabbo noted. He also hailed the “incredible support” that municipal, state and federal governments provide foreign businesses. Government incentives include tax breaks, subsidized real-estate facilities, reduction of certain fees and funding of workforce training, Gutierrez explained.

One such example came from Margarita Solis, general director of IJALTI (Jalisco Institute of Information Technology Services), a non-profit initiative supported by government, private industry and the University of Guadalajara. IJALTI supports the industry by unlocking public funding for projects and providing temporary landing space in a high-tech business cluster for big companies setting up their Guadalajara operations, she explained. Office space in the Software Center leased by IJALTI goes for just $17 US per square meter per month, often with desks and chairs included.

Once companies expand and move out of the Software Center, an ideal location would be one of several vacant spaces in the Andares business zone currently undergoing heavy development, Enrique Cortes noted.  The visitors were taken on a guided tour of the Oracle and HCL offices in one of the many office blocks in this modern area of the city’s Zapopan district.

Several of the visitors expressed an interest in opening up call centers, and Guadalajara’s Periferico ring road provides several perfect locations, with universities in close proximity, numerous public transport links, and office space going for just $5 US per square meter per month.