Mexico emerges great destination for Indian BPO firms

The Latino country is eyeing for $8 billion revenue from information technology services by 2030 For most people, Mexico doesn't equate with a home for high-tech companies. However, with a likely shift in the world economic superpowers in the future, the 'Latino' country is eyeing for $8 billion revenue frominformation technology services by 2030.

The global markets for IT services and business process outsourcing (BPO) is posing strong growth despite challenging conditions worldwide. According to Gartner, the revenues of $748 billion in 2007, is set to grow 9.5 percent in 2008, while the Everest Group estimates the present BPO market to be values at $28 billion is expected to grow up to $280 billion by 2012.

In this context, Mexico is set to fully take advantage of the growth prospects for these markets. Talking to CIOL at the BangaloreIT.biz 2008, Ricardo Alvarez, executive director of International Promotion, Mexico says, "Mexico is has already signed free trade agreements with 44 countries and is the second largest NAFTA country. India has always been the key strategic partner in many industrial sectors and would like it to expand in the IT front as well."

Alvarez says, "Goldman Sachs report indicates India and Mexico are likely to emerge big as world's economic superpowers and so need to work together in this regard. We can do so much together with India in IT despite the present financial crisis."

As per the report, China will top the list as the 'Economic Superpowers' by 2030, followed by USA, India, Brazil, Mexico and Russia.

With a privileged geographic location right next to the world's largest IT market, Mexico offers abundant qualified human resources and strong support. "These are among the many reasons why the government estimates that these sectors will export $8 billion by 2030," adds Alvarez.

Now with US economy tottering and President-elect Barack Ombama posturing against outsourcing, Mexico sees itself as alternative destination Indian IT Inc can explore for furthering their business.

With more than 1,200 software, BPO and IT services firms, Mexico generated revenues of $4 billion in 2007 growing at 36 percent annually (including IT oursourcing) of which $3.1 billion were exports, he adds.

Home to ten Indian IT firms, Mexico is rolling the red carpet for more Indian IT firms to set up shop there. Sasken, Mphasis, Sutherland, Hexware, Infosys, TCS, Wipro, Aricent, iGate and Mindtree have logged their presence in Mexico from 2005. "Our purpose in participating at IT.biz is to diversify our markets and establish better IT ties with India, he says.

Mexico's need of IT service professionals is expected to double from 41,000 in 2007 to 89,000 in 2013 and BPO professionals triple from 50,000 in 2007 to 155,000 in 2013, he said, adding it has 23 regional IT clusters in 20 states. For promoting IT in the country, Mexico First initiative is being rolled out with $100 million spend over the next five years, Alvarez adds.

Mexico, he said, was pushing Mexico City, State of Mexico, Jalisco, Nuevo Leon, Puebla, Sonora, Sinaloa and Veracruz, as fast-growing IT industry destinations for nearshore outsouring with advantages like time-zone alignment, lower costs, fast and simple visa regime, ease of software and hardware procurement, and legal and IP protection.

Recognizing the importance and economic potential of the software, IT services and BPO industries, the country has set up Prosoft — federal flasghip programme for the IT sector to provide financial assistance to IT investment and development. TechBA — business incubator and Mexico IT to provide information and advice to foreign firms keen on doing business in Mexico.