Positive Economic Outlook Sets Pace for Professional Services
Its timely release comes amid growing optimism over Mexico’s macroeconomic and political outlook. GDP growth has averaged 3.5 percent over the last year and the IMF predicts slower but steady growth in 2012-2013. A stabilized U.S. economy has also reinvigorated Mexico’s manufacturing exports and now looks to do the same for professional services. Likewise, global demand for ITO and BPO services shows little sign of slowing. Even though deteriorating conditions across the Euro Zone threaten economic growth in Asia, Mexico’s economic affinities lay more with the United States and Latin America. As global enterprises look to achieve additional cost savings, Mexico’s strategic geographic location will likely channel more outsourcing contracts into the country.
In response to these factors, Going Global notes that Mexico’s outsourcing industry is expected to grow by 10 to 15 percent in 2012, reaching 13 billion USD by year’s end. Domestic demand for application services management, technology infrastructure, mobile application development, and software testing among other services represents roughly 60 percent of total industry revenues. Driven by higher profit margins, domestic and multinational outsourcers will also look to aggressively expand their Mexico-based offerings in 2012.
Government Initiatives Empower New Markets to go After IT Services
Mexico’s traditional locales for IT services including Mexico City, Monterrey, and Guadalajara will remain outsourcing hotspots in 2012. Additionally, continued government support for the sector will push vendors and enterprises to seek out new geographies. Since 2004, Mexico’s Ministry of the Economy has spent close to one billion U.S. dollars on an aggressive industry promotional strategy. This funding has empowered cities like Queretaro, Hermosillo, and Aguascalientes to take a strategic approach toward promoting their regions and to fund training and education focused on information technology and business related fields.
Telecommunications Costs and Labor Shortages Pose Conquerable Challenges
Despite the optimism, challenges to the market remain. Going Global identified conservative business attitudes as an inhibitor to IT innovation and entrepreneurialism in Mexico’s IT start-up culture. Mexico’
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