Mexico’s Large Cities Hold Tech Potential

Mexico’s sprawling cities are host to large populations with the potential to support and develop technology hubs. The Latin American powerhouse boasts an impressive number of cities with populations larger than 500,000 — and the IT sector should take note.

Behind the Data

Population data differs from source to source, but Mexico’s position as having a significant number of larger cities with more than 500,000 population is supported by more than one source. According to Index Mundi, 78.1% of the total population is urbanized.

PopulationLabs created a statistical graph and listing of the population of Mexico’s cities. It cited 36 cities as having populations of half a million or more. CityPopulation on the other hand lists 35 Mexican cities as housing over 500,000 people. Both studies indicate that Mexico is home to 10 cities that have over a million residents.

Mexico tops even Brazil when it comes to the number of large cities with populations in this category; Brazil has 34. Argentina, on the other hand, has just nine.

What It Means

The figures demonstrate the scale and girth of Mexico and its potential to deliver on talent. Already in 2012, the enrolments at Mexican universities had trebled and interest in engineering and technology has been especially significant. The Claim by President Felipe Calderon at the time was that “Mexico graduates 130,000 engineers and technicians a year from universities and specialized high schools.”

It also means that other large cities could follow the example of Mexico City and Guadalajara, in cultivating tech hubs to serve the BPO and ITO sectors. Large cities — especially on the scale of Mexico — mean an appetite for jobs and the tech sector is a particularly attractive option for young people graduating from local universities. They are also likely to have developed (or be in a position to develop such) infrastructure to support tech hubs.

While there is no study that directly relates population size to tech sector growth, Forbes Magazine recently examined the cities in the US with the greatest tech job growth. Only two of the top ten, which includes Austin, San Jose, San Francisco and Houston, have populations less than half a million.

Larger population bases translate into larger pools of potential talent as well as other benefits that can support the growth of technology sectors in those areas. A Wall Street Journal report pointed to the fact that America’s traditionally suburban tech sector is increasingly moving to large urban areas. While Mexico is a different proposition, its large urban bases make for attractive ground for the tech sector.

Our Take

Large population centers alone are not enough to guarantee tech growth, but Mexico is poised to continue growing as a tech center for delivery of services around the world. Capitalizing on its large population centers, the variety of potential location for tech development, and the increasing number of tech graduates it produces, the country could challenge even the top three IT outsourcing destinations in the world.

Mexico is currently ranked fourth in ISG’s Outsourcing Viability Index, behind India, China and Ireland. It holds the same spot in the 2014 Global Services Location Index (GLSI), also behind India and China, with Malayasia snapping up third place.