Nearshore Americas

Monterrey Accelerates its Leadership as “LATAM Software Capital”

Rather than being recognized purely for its manufacturing industry, the northern Mexican state of Nuevo Leon is increasingly becoming known for its support of new businesses from the knowledge industry.

This is the consensus of many of the big players from the ICT sector currently operating in Monterrey, the capital of Nuevo Leon. They attribute Monterrey’s success to its good work ethic, discipline, focus on quality control and enterprise and its ability to generate high quality human capital.

The recent Softmty convention, held by the Nuevo Leon Software Council (Csoftmty), centered on how the future of smart businesses lies in analytics and mobility. It also highlighted how governmental collaboration, the private sector and initiatives from higher educational institutions are helping drive the organization.

According to information from Csoftmty, there are currently over 400 ITC companies operating in Nuevo Leon; generating over 14,000 jobs and registering annual sales figures of nearly US$2,000 million.  From 2004 to 2011 alone, the industry created over 11 thousand new positions, with an invoicing average per job of US$40,000.

According to Csoftmty President Eduardo Ruiz Esparza, the organization’s evolution has been significant. Starting off, ten years ago, with only 15 businessmen, it has grown to include over 200 members. “We were the first advisory board to the government of the State of Nuevo Leon,” he said.

Csoftmty currently works with a wide range of initiatives, including the implementation of a strategy to help businesses enter the U.S. market, collaborating closely with universities in order to generate human talent, and collaborating with the government, giving access to the funds needed in order to train and certify said talent, such as MexicoFIRST.

“While initiatives are there to be taken advantage of by the members of the Board, they are also open to the industry as a whole.  If there are businesses that do not currently belong to it, but would like to participate, we allow it because our work is for the state of Nuevo Leon as a whole,” Ruiz Esparza stated.

A Mature Ecosystem

According to Alejandro Camino, Marketing and Communications Vice President at Softtek, Monterrey’s software sector has seen significant growth over the last few years. “We have tripled in size in the last few years, and this growth has also been reflected in other organizations. While not all have grown at the same rate, we are seeing maturity in the software ecosystem,” he remarked.

According to Camino, Nuevo Leon – and in particular Monterrey – will play a key role in the industry due to the fact that information technology is no longer limited only to large organizations or IT departments, but has infiltrated the products and services provided by businesses. “When you add this to business tradition and enterprise, some really interesting opportunities are born,” he said.

“Nuevo Leon has come to be seen historically as the software capital, not only for Mexico, but for the whole of Latin America, and there are a variety of factors supporting this view,” stated Rolando Zubiran, Nuevo Leon’s Economic Development Secretary. He explained that the state registers the most scientific, technological and innovative patents every year, as it has an academic function directed at producing engineers specializing in software.

Without a doubt, the Nuevo Leon Institute for Innovation and Technology Transfer (I2T2), headed by General Manager Jaime Parada, has played a key role in the innovation process. This institute is responsible for the scientific, technological and innovative support programs and policies for the academic, industrial and business sectors. “In 2009 we created the Research and Innovation Technology Park (PIIT) to strengthen the scientific-technological infrastructure,” Parada explained.  The PIIT currently has over 3,300 scientists working in 35 research centers spread over 110 hectares. Half of these 35 centers are public research centers for universities, while the other half are technology and research centers for local and global businesses.

“We also look to strengthen human talent by providing scholarships for Master’s degrees and doctorates. Over the last three years we have sent over 500 people to study at some of the best universities in the world,” Parada stated.

The Strengths

When interviewing representatives from some of the businesses that form part of Csoftmty, and questioning them as to the main factors contributing to the growth of the software and ICT industry in Monterrey, the general consensus was that the availability of qualified human resources from leading universities was the contributing factor.

“The big advantage for the state is that it has four good universities: the Autonomous University of Nuevo Leon (UANL), the Monterrey Higher Educational Technological Institute (ITESM), the University of Monterrey (UDM) and the Regiomontana University (U-ERRE). Combined they have over 150,000 students enrolled,” indicated Parada, from I2T2. “They also have 15,000 students currently enrolled in Master’s degree and doctorate programs.”

According to Csoftmty, on average, over 6,000 new engineers graduate from universities in Nuevo Leon every year, and just over 1,700 are related to the IT fields. Moreover, some 8,000 new technicians graduate every year, with 6,000 specializing in IT.

“The role of the universities is to generate talent,” said David Garza, ITESM’s Dean of the Monterrey Metropolitan District. Looking to reinvent itself and keep at the cutting edge of progress, this educational institution recently launched a strategy known as Tec XXI. “It is a new educational model, based on the idea that students will be at school for four years and will work for businesses that are yet to be created, using technologies that have not yet been invented and will work to resolve problems that haven’t even arisen yet. We prepare students to enter that world,” Garza explained.

He also highlighted the importance of knowledge and discipline in the IT world. Garza is of the opinion that while it is important for students to learn terms and how to use to tools, they should also look to develop skills involving critical thinking, problem solving and verbal and written communication, both in Spanish and English.

ITESM is one of the universities that collaborate directly with Csoftmty through the Nuevo Leon IT Talent Development Institute (IDTI). This institute offers a 20-week program helping IT graduates to familiarize themselves with the latest information and also helping develop IT skills in students graduating in other subjects. According to Csoftmty, IDTI is currently able to train 500 graduates a year, and there is room to increase this if the need arises.

According to Alejandro Camino from Softtek, other factors contributing to Monterrey’s success are its ‘entrepreneurial’ culture and its knowledge of how to conduct business in the United States market. “Another point in its advantage is its close proximity to the United States, as well as the good level of English of the graduates and professionals,” added Guillermo Safa, General Manager at Csoftmty.

Repercussions from the wave of violence that swept through Nuevo Leon towards the end of the last decade are still being felt, despite the fact that it currently enjoys a generally peaceful environment in its capital. “Regaining trust takes time, but the reality is that insecurity levels have dropped by around 70 percent,” stated Rolando Zubiran, Nuevo Leon’s Economic Development Secretary. “The fact that the (travel) warning has been lifted in Canada and Japan for example, as well as by the U.S. Department of State, propitiates the existence of a commercial relationship.”

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Reaping the Benefits

The Monterrey Software Board will continue to emphasize the development of the market, businesses and infrastructure, along with the sustainability of and access to economic funds to strengthen the ICT industry in Nuevo Leon.

“I would really like innovation to become part of companies’ modus vivendi,” said Csoftmty President Eduardo Ruiz Esparza. “I believe they have made steps in this direction, but it still hasn’t penetrated all companies. Many follow traditional models and they still haven’t made the transition to generate business and service models that result in real value. I would love it if the next Angry Birds, WhatsApp or Amazon could be invented here.”

“We have worked hard to ensure there is sufficient human capital and to get financing for service providing businesses,” added Guillermo Safa. “We have worked on establishing these foundations with a view to growth. I would like to see us reaping the rewards for what we have sown; that our efforts be reflected in increased sales. We should start focusing more on positioning, commercial support and ensuring that the machinery needed to generate innovative, enterprising human capital works perfectly.”

Norberto Gaona

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