HomeInternet of Things (IoT)Mexico targets foreign Industry 4.0 investment from Europe and Asia

Mexico targets foreign Industry 4.0 investment from Europe and Asia

Mexico’s is a fertile manufacturing economy that is ripe for automation, and primed for inward industrial investment. That was its message at Industry 4.0 trade fair Hannover Messe last week, as the nation prepares to go to the polls to elect a new president.

Mexico has enjoyed an unprecedented period of macro-economic stability, with trade and foreign investment booming. In 2017, nearly 16 per cent of its GDP ($1.14 trillion) came from manufacturing. The country is the third largest exporter of computers in the world; it shifted high-tech goods, including computers, telecoms gear and healthcare equipment, worth $409 billion last year.

According to President Enrique Pena Nieto, the country has had the largest number of patents granted in the region; 220,000 Mexican students have graduated in science, technology, engineering and mathematics subjects.

Its ‘foreign direct investment’ (FDI) record is tied to US economic policy, invariably, but it has broadened its international appeal and spread its risk. “Mexico’s economy is very integrated with the US economy. Trump is worrisome, but nothing has actually changed [for Mexico],” said America Garcia, an undersecretary for industry, commerce and services for the state government in Nuevo León.

“We will continue to grow with the US, but we have also been turning to Europe, Korea, Japan and China. It’s important to have these partnerships. We want Asian and European people to come to Mexico and invest.”

Mexico was the country partner at Hannover Messe last week. Siemens, the largest presence at the show, has a long history with the country. Bosch announced in Hannover it will invest €100 million (US$120m) in a smart factory for automotive parts in Celaya, in Mexico, creating 1,200 additional jobs by 2020. Other Mexican Industry 4.0 exhibitors in Hannover include Inmersys, Lumed and SinLlave, involved in industrial VR applications, digital healthcare and digital security, respectively.

Nuevo León, in the country’s north, has the highest GDP per capita in Mexico; 426 FDI projects have been announced between 2013 and 2017, variously in automotive, advanced manufacturing, logistics and computing. The state is home to over 150 industrial parks, the most in the country. “We’re growing at double the rate of the whole of Mexico,” said Garcia.

He added: “The automotive cluster in Nuevo Leon is one of our main innovation hubs. Kia is there, and our neighbouring state has Ford and Chrysler, which are less than 50 miles away. We’re also seeing growth in the software cluster, which mainly consists of small businesses. They have been growing steady, securing contracts in the United States, and also bringing work to Mexico from their bases in Texas and California.”

Garcia is confident the state, and the country as a whole, will retain its magnetism for foreign industrial investment, regardless of the new national government in July. “Business attracts business and we are confident that with any president, we can still get FDI,” he said.

The Mexican government has said it wants to be among the top 10 countries in the Economic Complexity Index, cementing its place as an innovator in industry 4.0, by 2027. As it stands, it ranks only as an “emerging” economy, number 23 out of 25, on the Economist Intelligence Unit’s ‘automation index’, produced with Swiss industrial firm ABB.

Heather Delaney, founder of GSVLabs, a mentor organisation for Mexican start-ups, said at Hannover Messe Mexico is rising up the ladder as a centre for innovation, however.

“Over the past couple years, there has been a growing trend in exciting new startups coming out of Mexico. In the past start-ups had a view on taking over the US, but lately I have seen many companies looking to better the lives of their own citizens and industries,” she said.

Many of its start-ups are naturally inclined to boost the country’s manufacturing base, she said. “I have seen a growing number of founders looking at the traditional manufacturing, and even shipping, processes and realising that there is an easier way to loop it all together.”

She added: “It has been an absolute joy watching start-ups realise that their own country is full of talent. A number have a keen interest in making sure what they are doing has a lower impact on the environment. It’s a nice change seeing technology interested in moving forward but clawing back a clean environment with less waste.”

Deutsche Telekom
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