Case study Mexico
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Case study Mexico Presentation Transcript

  • 1. Mexico’s Public Policy to Develop the IT-ITES Sector  CLAUDIA IVETTE GARCÍA ROMERO  Director General for Domestic Commerce and Digital Economy  Ivette.garcia@economia.gob.mx  Tel. 52296100 Ext 34100  SUBSECRETARIA DE INDUSTRIA Y COMERCIO May 19 2011 Subsecretaría de Industria y Comercio
  • 2. Agenda 1.  Diagnosis of Mexican economy 2.  Fostering the development of the IT-ITES Sector 3.  Main National Initiatives 4.  PROSOFT Grants Found 5.  ConclusionsSubsecretaría de Industria y Comercio
  • 3. Mexico is the 14 largest economy in the world Nowadays Mexico is the 14 largest Economy in the world. According to recent forecasts from PricewaterhouseCoopers and HSBC Global Research, it is estimated that towards 2050 Mexico will be ranked as the 7th or 8th Economy, over countries such as France, Italy, Canada, Spain and Australia. Gross Domestic Product 2010 (billons of usd)Subsecretaría de Industria y Comercio
  • 4. Mexico is in an expansion phase, the GDP reached a growth of 5.5% Overachieving all expectations, the Mexican economy grew in a rate of 5.5% during 2010 showing the greatest dynamism over the last 10 years, fostered mainly by commerce which registered a growth rate of 13.3% and manufacture industry with a rate of 9.9%. GDP of Mexico (anual growth %)Subsecretaría de Industria y Comercio
  • 5. Mexico shows an increase of 77% in infrastructure investment From 2010 to 2011, the investment of infrastructure in Mexico shows a growth of 77%, thanks to this, more than 15 thousand kilometers of highways have been modernized. Infrastructure investment (thousands of millions of pesos 2011)Subsecretaría de Industria y Comercio
  • 6. Agenda 1.  Diagnosis of Mexican economy 2.  Fostering the development of the IT-ITES Sector 3.  Main National Initiatives 4.  PROSOFT Grants Found 5.  ConclusionsSubsecretaría de Industria y Comercio
  • 7. Why
fostering

the
development
of
the
IT‐ITES
 sector?
 GDP1
 IT’s
is
capable
of
raising
GDP
up
to
5%
 Country
compe33veness2
 There
is
a
posi8ve
correla8on
of
92%
between
the
adop8on
 of
IT‐ITES
and
the
compe88veness
of
na8ons
 Enterprise
produc3vity3
 The
use
of
IT‐ITES
along
with
high
level
business

prac8ces
can
 increase
up
to
20%
enterprise
produc8vity

 Knowledge
economy
 Knowledge
economy
offers
the
opportunity
of
compensa8ng
 the
disadvantages
in
costs,
migra8ng
to
value
added
services
 Salaries
and
economic
shed
 IT
sector
salaries
are
3
to

5
8mes
higher

than
manufacturing
 salaries
1. The Economist Industria y Comercio 2 IMCO; 3. McKinsey y London School of Economics) ; 4: Gartner Subsecretaría de Intelligence Unit),
  • 8. ¿Why thinking about Information Technologies? At international level we can observe a positive correlation between the information technologies and the economic performance of economies. Corelation between the use of IT and the competitiveness of economies 7.00 Suiza Switzerland 6.00 Competitiveness index 5.00 4.00 3.00 México 2.00 3 3.5 4 4.5 5 5.5 6 6.5 7 Use of IT Source: World Economic Forum. Networked Readiness Index 2010 y Global Competitiveness Index 2010.Subsecretaría de Industria y Comercio
  • 9. Size of the global IT market The ICT global market for 2011 it’s estimated to be 3.6 TUSD •  Approximately 25% of that total is produced through outsourcing •  IT services and software represent 50% of the total expense 4.5 Global IT outsourcing market 4 United States Rest of the world 3.5 3 2.5 36% 2 2009 1.5 2014 64% 1 0.5 0 Global IT market Source: Gartner 2011, A.T. Kearney Global Location Index, 2011Subsecretaría de Industria y Comercio
  • 10. IT services are considered an strategic sector for Mexico High competitiveness and Develop of entrepreneurs Development of local market impact sectors and professionals (Continue to promote it’s (Attract investment and (Promotion for the creation of sane development) industry development) new enterprises) •  Manufacture of transport •  Commerce •  Agriculture, fruits and equipment. •  Housing flowers.Environmental Sustainability •  Manufacture of machinery •  Financial services •  Physical devices, Software and equipment. •  Investigation and (Clean technologies) •  Manufacture of electric and development services (I + electronic devises. D) •  Miner (excluding petroleum •  Architecture, engineering and gas). and design services •  Business Process •  Music, movies, radio and Outsourcing. television •  Food industry. •  Health services •  Tourism. Development platforms (Assure the development of platforms through the adequate regulation, bigger competition and investment) 1.Infrastructure 2.Telecomunications 3.Educational services Subsecretaría de Industria y Comercio
  • 11. Mexcio´s IT Sector - SWOT Positive •  Human Capital volume Positive •  Local market potential growth •  Geographical location •  Trade Agreements o •  S Government support •  Entrepreneurial culturelocal •  Foreign Software industry •  Development of high maturity expertise services supply •  Alignment of efforts Negative •  Local market Negative Negativos •  New players articulation •  Foreign financial crisis •  Quality of Human •  Human Capital leeks W Foreign T capital •  Mexico’s international imageInterno local •  Industry – academic •  Commercial policy in links •  Protectionist commertial policy •  Financing for in international market sectors industries •  Continuity of strategies Subsecretaría de Industria y Comercio
  • 12. 10 Year Vision PROSOFT Deployment PROSOFT World Launch: platform 2.0 class Public policy player 2002 2004 2006 2008 2010 2012 PROSOFT Productive Innovation Grants Fund chain and consolidation technology developmentSubsecretaría de Industria y Comercio
  • 13. Long Term National Public Policy - PROSOFT 2.0 Exports and investment Production level Human Capital •  15,000 MUSD IT Market Legal framework •  2.3% TI/PIB IT use diffusion Awareness Productivity & Innovation •  Latin American Leader Standards and Marturity (Quality) Employment Funding access •  625,000Subsecretaría de Industria y Comercio
  • 14. PROSOFT 2.0: Strategies and impact tools Investments and Productivity & Maturity and Human Capital exports Innovation Quality•  Mexico FIRST •  Mexico IT •  Clusters •  MoProSoft•  IT Talent •  IT Link •  Innovation •  PSP/TSP•  Labor standards •  IT Technology initiative Roadmap •  Technology parks Financing IT use diffusion Legal framework •  PROSOFT •  IT user projects •  Personal data fund •  Government Protection Law •  Warranty fund purchase •  Homologation •  Risk Capital power framework •  Trust seal for •  NOM 151 – electronic Data messages commerce safeguard Subsecretaría de Industria y Comercio
  • 15. Mexico’s IT Industry Profile 2,785 90,000 annual 27 IT Clusters enterprises graduates 600,000 303 centers with 24 IT parks employees quality levels 5% annual IT/GDP expense 4.15 BUSD rotation =1.7 exportsSubsecretaría de Industria y Comercio
  • 16. IT services exports •  In 2010, Mexico’s IT exports were 38% of it’s production, with an estimated growth rate of 16.6% for 2011. Local market and IT + BPO exports (BUSD) 12 13% 1% 10 14% 19% 4.15 8 3.16 3.72 2.51 6 1.99 4 6.34 6.72 5.82 5.90 5.00 2 0 2006 2007 2008 2009 2010 Mercado Interno ExportacionesSubsecretaría (1) Gartner, (2)Comercio Fuentes: de Industria y Estimación, Elaboración propia con datos de Atkearney y Select
  • 17. Achievements (1/2) States IT Companies Growth Rate IT-BPO Exports 35 3000 14% 4500 12% 4000 30 2500 10% 3500 25 2000 3000 8% 20 2500 1500 6% 15 4% 2000 1000 2% 1500 10 500 0% 1000 5 -2% 500 0 200 201 0 2002 2011 2 1 0 2002 2011 Compa 2002 2011 2095 2785 Growth IT-BPOStates 4 32 nies Rate -1% 13% 200 4,150 ExportsSubsecretaría de Industria y Comercio
  • 18. Achievements (2/2) IT Clusters IT Parks Quality Cience&Tech 30 30 Certified Graduates Centers 100,000 25 25 350 90,000 300 80,000 20 20 70,000 250 60,000 15 15 200 50,000 150 40,000 10 10 100 30,000 50 5 5 20,000 0 10,000 2002 2011 0 0 Quality - 2002 2011 2002 2011 200 201 Certifie 2 1 IT IT 4 303 0 27 0 24 d GraduateClusters Parks Centers s 65,000 90,000Subsecretaría de Industria y Comercio
  • 19. Mexico in the global market Analyst Recognition on MEXICO Gartner Mexico ranks as the fourth largest producer of IT services, after India, the Philippines and China Gartner Mexico is the only Latin American country to obtain a rating of "very good" in the evaluation of cost, when other countries had achieved only "good" AT Mexico is ranked 6 in the Global Services Location Index Kearney 2011, being the first country in North America, this is due to the availability of human capital and financial attractiveness (costs) KPMG Mexico is the most competitive location for the activities of Software Design, Back Office / Call Centers, Web and Multimedia.Subsecretaría de Industria y Comercio
  • 20. Mexico’s position in the global IT market México occuppies the 6 position in the Global Services Location Index 2011, beeing the first country of North America, this thanks to the disponibility of Human Capital and its finantial atractiveness (costs). 6Subsecretaría de Industria y Comercio
  • 21. Cost comparisson with other countries •  According to KPMG1, Mexico is the most competitive location for activities such as software design, back office / call centers, web building and multimedia. Saving percentaje regarding operating in the U.S. 60 50 40 30 53.4 20 34.1 31.7 10 4 12.1 11.2 0 Back Office / Call Diseño de Software Web y multimedia Centers México (lugar 1) Canadá (lugar 2)Subsecretaría deElaboración propia con datos de Competitive Alternatives, KPMG 2010 Fuente: (1) Industria y Comercio
  • 22. Location and customer satisfaction Customer
sa3sfac3on
of
IT
Services Type Satisfaction (%) 2008 Sameshore 82.4 Nearshore 81.5 Outsourcing 61.1 Offshoring 33.3 •  Customers of the companies offering IT services are more satisfied when they are working by companies relatively close (proximity and time zone) •  Therefore Mexico is the ideal supplier to markets such as USA, Canada and Latin America.Fuente:
The
State
of
Outsourcing
Industry
Report
2008,
Brown
Wilson Subsecretaría de Industria y Comercio
  • 23. Agenda 1.  Diagnosis of Mexican economy 2.  Fostering the development of the IT-ITES Sector 3.  Main National Initiatives 4.  PROSOFT Grants Found 5.  ConclusionsSubsecretaría de Industria y Comercio
  • 24. MEXICO FIRST •  Objective: Accelerate the availability of human capital with International Skills to proved IT and BPO services globally. •  Catalog includes more than 200 options of International Certifications •  39% average discount on Commercial List Price •  Goal per year: 12,000 certificationsSubsecretaría de Industria y Comercio
  • 25. MEXICO FIRST: Achivements Number of certifications Vs. Goal* 15,19815,000CertificationsGoal 7,500 5,800 3,690 1,500 2008 2009 2010* cumulative figures per year Subsecretaría de Industria y Comercio
  • 26. MEXICO FIRST – 2011 Indicators Technology Business English TOTAL Training persons 11,060 2,667 1,428 15,155
 Certified persons 7,348 2,133 0 9,481
 RESOURCES (MXP) Project SE IP TOTAL Technical $ 102,000,000 $ 189,429,719 $ 291,429,719 English and $ 30,000,000 $ 55,716,470 $ 85,716,470 Softskills TOTAL $ 132,000,000 $245,146,189 $377,146,189Subsecretaría de Industria y Comercio
  • 27. IT Clusters Analysis of competitiveness Maturity and Competitiveness ObjetiveSubsecretaría de Industria y Comercio Fuente: Estudio de Competitividad de Clusters, 2008
  • 28. Certifications in Quality Certification methods to evaluate the performance of companies: 302 IT Firms with Quality certifications Worldwide First place in PSP Certified Developers INGLA CHINA Title EGIPTAUST INDIA Chart TERR 1% CORE O RALIA 2% A 1% 1% AJAPON 2% 1% 8% MEXICO TSP/PSP National initiative EUA 50% 34% •  Objective:To Accelerate the process to achieve higher levels of quality through high-performance people and high performance teams Subsecretaría de Industria y Comercio
  • 29. IT Roadmap   The IT Roadmap is a planning tool with the participation of representatives from industry, academy and government, whose purpose to develop Mexico’s Global Expertise Vision Mexico as a leading player in advanced manufacturing automation IT solutions Vertical Expertise Electric –Electronic Aerospace Automotive Medical Devices Milestones What, where, value, where? Actions PlayersSubsecretaría de Industria y Comercio
  • 30. IT Roadmap Global IT spending in the manufacturing sector for 2011 is estimated at 446.6 BUSD Electric –Electronic Automotive Medical Devices Aerospace Global Exports •  The industry expects •  It´s estimated that by Ninth aerospace industry §  2° TV´S growth of 12.5% 2014 the market value supplier of U.S. (2009), §  2° Refrigerate and annually through reaching 9.760 md, and the sixth in the Freezer. 2013. which would mean an European Union (2008). §  3° Cell Phones annual growth of 9.9% R&D Centeres: •  Tenth global exporter Aerospace enterprises by • General Motors of medical equipment activity(%) 10% • Chrysler in 2009. 10% • Delphi technical Center 80% Manufactura MRO Ingeniería e I&DSubsecretaría de Industria y Comercio
  • 31. IT
Roadmap
for
advanced
manufacturing
(Model)

 Goal: Mexico as a leading player in advanced manufacturing automation IT solutionsMilesto 1 2 3 nes 4 axes Axes 3 axes 3 axes 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Supply & Demand Supply &Demand 6 projects Actions Survey Survey 5 projects 4 projects Communication StrategySubsecretaría de Industria y Comercio
  • 32. Agenda 1.  Diagnosis of Mexican economy 2.  Fostering the development of the IT-ITES Sector 3.  Main National Initiatives 4.  PROSOFT Grants Found 5.  ConclusionsSubsecretaría de Industria y Comercio
  • 33. Fondo PROSOFT General ojective: Contribute to the development of the information technologies sector, seeking it’s growth in the long term in Mexico favouring international competition. Specific objectives a)  Promote exports and investment attraction. b)  Raise the quantity and quality of Human Capital. c)  Promote the adoption of a legal framework that contributes use and production of IT. d)  Foster the approach between IT users with enterprises from the IT sector located in the country. e)  Create a broad base of enterprises and IT sector groups, and at the same time raise their competitivity. f)  Promote the enterprises achievements regarding international levels of process capacity. g)  Raise the options and possibilities of access to financial resources for the IT sector.Subsecretaría de Industria y Comercio
  • 34. PROSOFT Fund 2004-2010 (Million MXP) Año 2004 2005 2006 2007 2008 2009 2010 TotalesPROSOFT 139.70 192.49 428.61 438.24 631.98 525.09 624.94 2,981.05States 42.49 108.03 232.94 283.75 414.12 306.90 297.55 1,685.78Enterprises 60.42 366.91 763.78 831.81 1,022.51 904.21 951.14 4,900.78Academy 3.46 13.32 14.62 60.29 125.37 9.28 5.35 231.69Others 3.45 72.99 31.57 85.56 104.12 8.64 - 306.33Total 249.52 753.75 1,471.52 1,692.53 2,344.11 1,754.12 1,878.98 10,144.53Projects 68 181 334 487 494 360 160 2,084 2011 Federal Budget: 677 million MXP Subsecretaría de Industria y Comercio
  • 35. PROSOFT Grants Fund: Simplified supports distribution process IT enterprises Universities IT Users Banks Procesess Target entities Intern mechanism of operation of Promoting organisms DGCIED analizes and sends feedback Executive Board resolution Approoved projects Sign Agreement with beneficiaries Payments to the beneficiaries throughSubsecretaría de Industria y Comercio the PO’s
  • 36. PROSOFT Grants Fund: support areas and investment 1.  Training and certification 2.  Technological equipment Project investment 3.  Enterprise quality certifications 4.  Use of IT and related services 5.  Innovation 6.  Commercialization 7.  Studies PROSOFT 8.  Professional services 25% 9.  Events 10. Creation and strengthening of Beneficiary financing mechanism Federal 50% 11. Acceleration of public policy Entity 25% Basic mix of contributionsSubsecretaría de Industria y Comercio
  • 37. PROSOFT grants fund. Relative importance of expense areas Rela3ve
importance
of
expense
areas
 within
the
PROSOFT
grants
fund Training Technological equipment and fitting Profesional services Events Use of IT and interlinked servicesSubsecretaría de Industria y Comercio
  • 38. Parametric model The score of the different variables, and the integrated score of every support application will help the executive board to prioritize the projets in it’s aprobation process.Subsecretaría de Industria y Comercio
  • 39. X Score calculation Is it found in the project? Final Element Si=1 Value value No=0 adjustment Innovation
 0.200
 Certifications of Human 0.150
 Capital
 Specialized jobs created
 0.150
 Productive project
 0.100
 Organizational 0.100
 certifications
 Promoting Organism 0.100
 investment
 IT users projects
 0.075
 Successful continuity
 0.075
 Academy – Industry 0.050 linked projects Sum (total score) (value 0 and 1)Subsecretaría de Industria y Comercio
  • 40. Is it found on the project? Element Si=1 Value Final Value No=0 adjustment Strategic vocation 0.50 Strategic action 0.50 Sum (total points) (value between 0 and 1)Subsecretaría de Industria y Comercio
  • 41. Is it found in the project? Element Si=1 Value Final Value No=0 adjustment Is the project linked 0.40 to the World Bank project Industry projects 0.35 Strategic vocation 0.25 Sum (total points) (value between 0 and 1)Subsecretaría de Industria y Comercio
  • 42. Agenda 1.  Diagnosis of Mexican economy 2.  Fostering the development of the IT-ITES Sector 3.  Main National Initiatives 4.  PROSOFT Grants Found 5.  ConclusionsSubsecretaría de Industria y Comercio
  • 43. Concluding Remarks 1.  The global outsourcing market of IT services continues to grow, and Mexico has the qualifications and potential to increase it’s share in such market, where today it competes strongly. 2.  The efforts and strategies on the years to come will be focused on the specialization in strategic subsectors that could foster the country’s positioning among the global supply. 3.  Mexico seeks to cooperate in regional strategies that would allow to foster international practices through the use of the IT  personal data protection, investments in the productive sectors, Knowledge transfer and investments.Subsecretaría de Industria y Comercio
  • 44. Mexico’s Public Policy to Develop the IT-ITES Sector  CLAUDIA IVETTE GARCÍA ROMERO  Director General for Domestic Commerce and Digital Economy  Ivette.garcia@economia.gob.mx  Tel. 52296100 Ext 34100  SUBSECRETARIA DE INDUSTRIA Y COMERCIO May 19 2011 Subsecretaría de Industria y Comercio