Will The Next “Silicon Valley” Be In Mexico? It’s Very Possible.
Mexico is quickly becoming the center of the technology boom in Latin America, and is quickly positioning itself to spread its technological prowess far beyond those boundaries. With half of its population being under the age of twenty years old, the number of students attending University has blossomed to nearly 3 million students. Tecnologico de Monterrey, a prestigious university in Jalisco, produces 85,000 IT graduates a year alone. Mexico is pumping out highly talented entrepreneurs and engineers faster than ever before from over 80 universities whose sole focus is engineering.
The situation at hand is an interesting one. As Manuel Emilio Morato Mungaray, a huge proponent of the Mexican tech scene noted,
“Mexico is a very traditionalist country, it’s a country that is very rooted in the past. They don’t have access to the mind frame of Silicon Valley where it’s like, oh, I can conquer the world. Here, people say, ‘No, I can never be a Mark Zuckerberg’”.
The key to Mexico moving into a position of power in the tech sector lies solely in opportunity. Mexico already possesses a long established and rich business culture, which is actively involved in providing support to the growing tech areas. Their $1.3 trillion economy may be on its way to being the fifth most powerful economy in the world, and the Mexican government has worked to help nurture the tech businesses of its nation. In 2013, the National Entrepreneur’s Institute was funded, and the government provided about $658 million in funding to entrepreneurs and startups. Additionally, in just the past two years, about 300 startups based out of Guadalajara received over $120 million in investment from venture capitalists based in the United States.
But of course, it’s not all fundraisers and booming business; Mexico’s technology realm still faces a number of challenges. For one, individual Mexican entrepreneurs have expressed that they are finding the the funds they can raise often caps at just 500K, due to a combination of US competition and a climate of corruption. There is also the issue of talent flight. Companies in the actual Silicon Valley have the means to offer higher salaries and more established opportunity than the Mexican technology scene can offer right now. Because of this, Mexican developers are not always keen on staying in Mexico.
There are individuals working to even the playing field though. Dave McClure, of 500 Startups, took over LatAM Startup Accelerator, and opened the first 500 Startups on Mexico in 2012, with the intention of bringing international startups to Mexico. Santiago Zavala, another Mexican hackathon organizer, partnered with David Weekly to create Mexican.Vc (recently acquired by 500 Startups) to connect Mexican entrepreneurs to venture capitalists. He also works to fly mentors and investors to Mexico, explaining to them how their investments could go so much farther, based on how cheap it currently is to do business in Mexico. The goliath online retail company, Amazon, is even getting in on the Mexican tech business. They recently opened a small version of their company in Mexico.
Global financial and technological domination are absolutely possible for Mexico. There will undoubtedly be many more exciting developments coming from the ever-growing tech scene. But it will not be easy. Leaders in the tech scene are going to have to work hard to determine how to retain talent, get even more investors interested, and to develop their own tech-business culture. If Mexico can differentiate itself from Silicon Valley, there is a huge opportunity for unprecedented success and growth for the nation as a whole.