A digital buzz is growing louder in Monterrey, Mexico’s premier manufacturing town.
Tata Consultancy Services (TCS) opened its first office in Monterrey, the capital city of Mexico’s northern state of Nuevo Leon. Though this is TCS’s ninth office in the country overall, it marks its first incursion into the Mexican north. The company has offices in Guadalajara (Jalisco), Queretaro and Mexico City already, all of them territories within or surrounding Mexico’s central region.
Monterrey is known mostly as a manufacturing hub. The auto industry has a very strong presence in the city, thanks in great part to the wealth of technical talent available locally (and regionally), as well as the fact that Texas is but a two-hour drive from town.
Nevertheless, Monterrey has been garnering a reputation as one of Mexico’s fastest growing digital cities, catching up with well-established tech strongholds like Guadalajara, Tijuana and Mexico City.The arrival of TCS is expected to accelerate that process, building on an ecosystem which already includes strong players in Nearshore IT such as Infosys, Softtek and Globant, as well as strong contenders like Simpat and OnePhase.
Changing the Tune
Monterrey is strictly linked to manufacturing in the speeches of mos public officials. This time, though, the city’s name was uttered alongside words such as “innovation” and “digitalization.”
“Companies like Tata match what we’re looking to build in this state: to promote entrepreneurship and new technologies,” stated Nuevo Leon’s governor, Samuel Garcia, during the offices’ opening.
“Every AI company; every automation, digitalization and IoT businesses; you’re all welcome here,” Garcia added.
Local entrepreneurs expect the city’s launch towards digitalization to pick up. Luis Hernandez, Executive VP of Administration at Cemex –one of TCS’s biggest clients in Monterrey– stated that the landing of TCS will “strengthen Nuevo Leon’s digital ecosystem”.
TCS already has a vision in which it will become a catalyst for innovation in the state. Rajeev Gupta (TCS’s Head in Mexico and of nearshoring operations in Latin America) and Marcelo Wurmann (CEO of TCS in Latin America) spoke of the company’s plans to develop talent locally and become a part of the state’s digital ecosystem.
“We are here, in Monterrey, to stay, and our conviction is to generate an impact through innovation and talent development,” said Rajeev Gupta, TCS’s Head in Mexico and leader of the company’s nearshoring operations in LATAM.
In spite of the enthusiasm for the local talent, TCS might find steep competition in town. As reported previously, the hunt for tech talent in Monterrey is getting hotter. Representatives of the local IT industry have noticed big players like Amazon, Google and even Tesla waltzing into the city and bagging scores of tech graduates.TCS already has 700 associates from Monterrey working in a remote scheme. The company plans to close 2023 with a headcount of 1,000 in the city. For Mexico overall, they’re aiming for 2,500 associates this year.
A New Economy
Mexican authorities gave signs of more digitally-oriented ambitions. In his speech, Foreign Relations Secretary –and potential presidential contender– Marcelo Ebrard spoke of two of his recent visits to Mumbai and underscored the relevance of what he described as “an economy of data and ideas.”
Back in 2022, Ebrard met with then TCS CEO Rajesh Gopinathan. According to the Secretary, Gopinathan made a strong argument for Mexico as a platform for the nearshoring of IT services, heralding a future filled with opportunities given the country’s position in terms of geography, economics and trade relations.
Mexico has managed to build a respectable reputation in the US as a hub for IT outsourcing. In spite of very little public spending in tech and innovation programs (less than 1.3% of the federal budget for 2023 and barely 0.35% of total GDP), its tech industry achieved a yearly growth of 7% in 2022.Mexican tech businesses have learned not to complain, though. They know that public support will come –if at all– from local authorities, not federal ones. And even then, they’ve taken a DIY attitude towards the development of their own industry.
While TCS’s landing in Monterrey won’t transform the city overnight, it will add to a growing ecosystem which mixes tech services and the manufacturing of goods for export to the US market.
In time, Monterrey could achieve the elusive dream of economic diversification and become a bona fide digital city.
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