Nearshore Americas

Exclusive Report: Groundbreaking Analysis of Mexico Outsourcing Landscape

After nine months of research and analysis, Nearshore Americas releases today a special 40-page reportGoing Global: The 2012 Investor’s Guide to Mexico’s Business and Technology Services,” providing exclusive analysis of the risks and opportunities in Mexico’s export services. Drawing on buy-side and vendor-side interviews, various data sources and proprietary market surveys, the comprehensive analysis provides a telling outlook on the country – for 2012 and beyond.  

Positive Economics

The report’s release comes amid growing optimism over Mexico’s macroeconomic and political outlook.  GDP growth has averaged 3.5 percent over the last year and the IMF predicts slower, albeit steady growth in 2012-2013. A stabilized U.S. economy has also reinvigorated Mexico’s manufacturing exports and now looks to do the same for professional services.  Likewise, global demand for ITO and BPO services shows little sign of slowing.  Even though deteriorating conditions across the Euro Zone threaten economic growth in Asia, Mexico’s economic affinities lay more with the United States and Latin America.  As global enterprises look to achieve additional cost savings, Mexico’s strategic geographic location will likely channel more outsourcing contracts into the country.


In response to these factors, Going Global notes that Mexico’s outsourcing industry is expected to grow by 10 to 15 percent in 2012, reaching 13 billion USD by year’s end.  Domestic demand for application services management, technology infrastructure, mobile application development, and software testing, among other services represents roughly 60 percent of total industry revenues.  Driven by higher profit margins, domestic and multinational outsourcers will also look to aggressively expand their Mexico-based export business in 2012.

Government  Empowers

Mexico’s traditional locales for IT services including Mexico City, Monterrey, and Guadalajara will remain outsourcing hotspots in 2012.  Nevertheless, continued government support of the sector will push vendors and enterprises to seek out new geographies.  Since 2004, Mexico’s Ministry of the Economy has spent close to one billion U.S. dollars on an aggressive industry promotional strategy.  This funding has empowered cities like Queretaro, Hermosillo, and Aguascalientes to take a strategic approach toward promoting their regions and to fund training and education focused on information technology and business related fields.

Telecommunications Issues

Despite the optimism, challenges to the market remain. Going Global identified conservative business attitudes as an inhibitor to IT innovation and entrepreneurialism in Mexico’s IT start-up culture.  Mexico’s business sector is also highly concentrated within a handful of state run monopolies and large business conglomerates.  This limits domestic market opportunities at the small-to-medium enterprise level, but also raises the cost of doing business.  Telecommunications in Mexico are among the most expensive in the OECD with 3G coverage limited to urban centers.  Labor force quality and availability is also highly variable across Mexico.

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Nevertheless, with continued public and private sector cooperation, these challenges should not stand in the way of Mexico’s growing competitiveness in the industry.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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