Mex Prosoft

Program for the Development of the Software Industry, PROSOFT Sergio Carrera Riva Palacio Director General of Domestic Commerce and Digital Economy Ministry of the Economy Government of Mexico

Mexico’s Economy Overview  Total population: 104 million  GDP: 625 BUSD (world’s 10th economy)  U.S. second trade partner (Canada 1st)  Largest FTA’s network worldwide (including NAFTA, EU, and Japan)  4th country in number of airports and 1st in daily flights to and from the U.S.  7th exporting economy  Ranked 5th in per-capita foreign direct investment received  Largest spanish speaking population (U.S. – 5th)  Best country in Latin America in terms of technological accomplishment, according to the UN

PROSOFT Mexico’s IT industry policy Goals (2013)  To accomplish an IT services annual production level of 15 billion USD  To reach the OECD’s average IT expenditure as an economy  To position Mexico as the leading IT powerhouse in Latin America

PROSOFT – Mexico’s IT industry policy Strategies 1. Promotion of exports and investments in the sector 2. Enhancement of human capital capabilities 3. Adequation of the digital economy legal framework 4. Development of the IT domestic market 5. Stregthening of the local industry 6. Achievement of world class process capabilities 7. Promote cluster development countrywide

State governments participating in PROSOFT Aguascalientes Baja California Guanajuato Jalisco Morelos Nuevo León Puebla Sinaloa Sonora Yucatán

Mexico’s ITES industry value offer  Human capital  Highest IT undergraduate level workforce in Latin America (+100,000)  30% of current undergraduate total enrollment in IT related fields  Abundant non-IT undergraduate level workforce for BPO and call centers available nationwide (lawyers, BA’s, CPA’s, HR)  Infrastructure  Broadband services available nationwide  World class telecommunications services in main cities  Sectoral experience for multinationals  Manufacture  Financial services  Government  Telecommunications

Mexico’s ITES industry value offer Total project cost advantage Quality and Legal framework (nearshore approach) process capabilites •Reduced flight cost •3 CMM-5, and +15 •Electronic signature and time compared to CMM-4 and 3 and invoice the Asian region companies (+53 currently •Data protection and •Enhanced productivity engaged in model privacy in the solution of real implementation and time problems assesment) •Intellectual property rights •Smaller amount of •ISO-9000 adoption professionals at widely spread •In all cases, the customer’s facilities legal framework is compatible with U.S. legislation

Mexico’s ITES industry value offer Country Cultural Environment Affinity •Political stability •Compatible business environment and legal •Low geopolitical risk framework •NAFTA •Deep knowledge of (investment protection, the American IPR, visas, market consumer access) •Direct access to the •Preferential market U.S. Hispanic market access with the U.S., Canada, EU, Japan, and Latin America

PROSOFT support for export oriented companies  Manpower training and certification  Software & equipment  Infrastructure Cash grants on  Process implementation and a 50% basis certification of total costs for:  Standards certification  Technology transfer and royalties  Supplier development programs  Education/training tailor-made programs with universities Additional grants from State governments apply

PROSOFT incentives for foreign companies establishing ITES operations in Mexico  The same type of cash grants given to export oriented companies apply  Tax breaks for R&D activities  Local governments incentives (availability differs from state to state): 1. Payroll & Estate tax exemption 2. Preferential rates for land acquisition or leasing. 3. Simplified red tape

PROSOFT grants – Sep/Dic 04 221 69 Companies qualified for grants: Projects supported  95 companies engaged in improving their process capabilities Cash grants worth 20 milion USD  +1,200 IT professionals engaged in training and certifications  + 200 professionals engaged in PMI training and certification  5 facilities for operations in embedded software, semiconductor & hardware design, and multimedia content development supported

Concluding remarks Nearshore approach Compatible legal framework and 1. Mexico’s ITES value offer has business environment advantages over other options: Political stability Competitive total project cost Tailor-made programs to develop supplier capabilities 2. Mexico’s workforce pool for BPO activities is abundant and readily available nationwide 3. Mexico’s IT industry has extensive experience working with U.S. based companies

Program for the Development of the Software Industry, PROSOFT Sergio Carrera Riva Palacio Director General of Domestic Commerce and Digital Economy Ministry of the Economy Government of Mexico

Mex Prosoft

by Walid Hakiri

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Mex Prosoft

by Walid Hakiri

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