Many American Fortune 1,000 companies, such as Disney, Ford, Western Asset Management, and Starbucks have singled out Mexico as a destination for nearshore digital innovation. Companies like these have large in-house software development teams and yet, still have a need to outsource some projects. For them, it’s critical that where they outsource has the same time zone, language, and reduced travel time. Even American tech unicorns such as Carvana, Affirm, and Rappi are looking to Mexico and Latin American to execute software development for their products. According to KPMG, 42% of international outsourcing is tied to North and South America and businesses that specifically outsource software development in Mexico save 43% on average.
The deep and growing technical workforce of the region has drawn much attention. Many of the students exiting Mexico’s top universities are graduating with technical degrees and strong English language skills. 20% of college grads are receiving engineering degrees and over 80,000 students graduate from IT-related programs yearly. Mexico City is evolving into one of the largest tech hubs in Latin America and is the most populous city in North America with over 21 million people. Another major tech hub, Guadalajara, has been referred to as the “Silicon Valley of Latin America”. With the hi-tech sector accounting for 60% of the total exports and large investment from the Mexican government, big tech corporations, and venture capitalists, the tech infrastructure of the region is booming. Mexico’s IT and software development sectors have been growing at a rate of 10-15% annually as more organizations invest in the region. Mexico ranks fourth amongst the largest IT services providers with an outsourcing industry estimated to be worth around $12 billion a year and growing.
There are many attributes that make Mexico an advantageous option for outsourcing operations. Most of Mexico’s technical services providers operate on Central Time allowing for communication to take place on your schedule. Mexico’s proximity to the US is beneficial for travel because the technical hubs are no more than a few hours by plane from many major US cites with hundreds of flights daily. The convenience of travel is further enhanced by USMCA (formerly NAFTA), which provides reduced visa restrictions and the bonus of virtually eliminating tariffs for many goods and services. Working with nearshore operations in Mexico can even provide a business the opportunity to understand the region and make inroads for possible expansion or growth in the Latin American market.
At Orion, we have a proven track record in providing technology services in Latin America. For Starbucks we helped develop their mobile app and online ordering service for both North and South America. We were able to meet their high standards and the mobile app is one of the top five rated food and beverage applications in all of Latin America. We are continuing to expand our full service development services from the region. As a global organization, we implement a global-local, or glocal, talent management strategy. With major delivery centers around the world, we are a nearshore strategic partner in any major market, co-innovating with our clients on their schedule.