Is the Yucatan Moving Towards An IT Boom?

The Yucatan Peninsula is enjoying increased interest from software developers and nearshore clients as talent looks to move from the pricier, more established areas and seed a growing IT community. While infrastructure and incentives still need to develop, the Yucatan has the potential to expand Mexico's burgeoning IT sector.

While Mexico City and particularly Guadalajara have garnered the lion’s share of interest in IT investment in Mexico over the last few years, other parts of North American country are also starting to stake their claim. The Yucatan Peninsula, with its thriving tourism hot spot of Cancun, seems to set to diversify its portfolio with an increased focus on IT.

The Yucatán Peninsula, a region of southeastern Mexico, comprises the Mexican states of Yucatán, with a population of 1.5 million over the age of 15, Campeche, with an over-15 population of under 650,000, and Quintana Roo, with an over-15 population of 1.1 million. Cancun, Campeche and Merida are among the key cities in the area. Together the states represent just under 8 percent of Mexico’s total GDP, but total foreign direct investment across all three states sits at less than one percent of the national total, according to investment promotion agency ProMexico.

From Party Capital To IT Mecca?

Much of the new interest in the area is centered on party capital Cancun with its beautiful beaches and exciting nightlife. Matt Edwards, International Sales and Marketing Manager of CancunIT, a Cancun-based software development company, said it is true that there are a growing number of Mexican programmers heading to Cancun. He explained that this is due to various factors. “The number of technology companies are growing, which is attracting more people to the area,” Edwards said.

Edwards highlighted that Cancun is a cosmopolitan city, welcoming visitors both national and international with a safe, multi-lingual environment, with the majority of people living here speaking English, Spanish, and other languages.

“It is a very accessible city, from anywhere else within Mexico, or around the globe, with direct flights to all the principal cities in US, Canada, UK and Europe. Cancun is also in a very similar time-zone to the US and Canada, which makes it very accessible to clients for nearshoring with no communication issues,” he added.

Increasing Interest

Outside of the Yucatan word of the uptake of technology investment and interest is slowly spreading. Clemente Gonzalez of Triolabs, which is based in Aguascalientes, has heard some chatter about the potential trend, although he has never really thought of it in that way. “I’ve heard about some companies opening in Campeche and Yucatan and an emergent ecosystem on IT. This is because government policies and incentives have increased in the last years as an effort to push this industry as a compliment to tourism activities, but I never thought this was a trend,” he said.

Edwards emphasized that one of the other main attractions to Cancun is the excellent quality of life that can be enjoyed here. “Cancun is a beautiful city, with a lot of natural beauty to be experienced, and also there is the complete tourism infrastructure, with many hotels, restaurants, natural and theme parks, casinos etc,” he said.

Building an IT sector, though, requires more than just a beautiful place, wiling people and a booming tourism industry. “Technology-wise, here in Cancun we have 12 universities that are offering courses leading to certifications in the Information Technology industry, and there is a large community of technology companies that are part of group CANIETI, which in English is the National Chamber of Electronics, Telecommunications, and Information Technology,” he said.

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Interest is growing and with it so is investment in infrastructure and incentives. “This year the Microsoft Innovation Center (MIC), Cancun was opened, and there are currently two projects to open technology parks, one by the government and one privately,” Edwards said.

Smaller Places, Bigger Interest

Octavio Luna Bernal, a Cancun-based Senior Software Developer, explained that there is a large hub of programmers in Playa del Carmen, about 50km south of Cancun. “There are a lot of freelancers, digital nomads working for startup companies,” he said.

He explained that Cancun software development is being delivered by companies that exist as “software factories”, doing business with US customers but hiring the developers under Mexico’s labor laws. He attributes this to the rise in nearshore demand.

Luna said that Akumal and Tulum, small towns to the south, about 100km from Cancun, also have a community of bloggers and IT entrepreneurs that run their businesses remotely.

He added: “As far as I can see this year we noticed a rise in the offers that US are opening to hire remote developers first hand. I am not quite sure if this is for Cancun only; I’ve seen offers for Puerto Vallarta, Los Cabos and Aguascalientes as well.”

Although these growing pockets of IT activity indicate a demand to move away from the established Mexican IT locations, there are challenges, chief among them the lack of the same infrastructure, incentive culture, and support. This type of development — which Guadalajara has epitomized in recent years — needs to follow the demand in order for the Yucatan region to really realize its potential. Early adopters will benefit from a nomadic, entrepreneurial culture that has already taken root, but may struggle with the lack of access to support and infrastructure enjoyed in more established regions.

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