Episode I- Jalisco and the Mexican Silicon Valley
Mexico has diverse economical regions that contribute to its greatness, at Mexpando we analyze the best options for each of our clients. In a series of articles, we will introduce the most important regions for economy and business along with a summary of relevant information to distinguish and present every one of them.
Jalisco in context
Jalisco, located in the western part of Mexico, has a great value to the country owing it to the excellent infrastructure, governmental planning, sustained development, and the diverse economic activities, standing out particularly in the high-tech industry because of its capital city Guadalajara.
Jalisco possesses geographical advantages as a consequence of the proximity with two of the most important commercial seaports of Mexico: Manzanillo and Lázaro Cárdenas. This region is attractively interconnected with an efficient network of roads by land with other main cities such as Mexico City and Monterrey and, it has two important international airports with many direct or connecting flights: the first being Guadalajara’s International Airport (the second largest cargo airport in Mexico) and the second being the Gustavo Diaz Ordaz International Airport of Puerto Vallarta (Secretaría de Relaciones Exteriores, 2022).
Note. Puente Matute Remus By Echauri Morales Arquitectos. (s.f.). [Photograph]
With a population of 8,348,151 inhabitants (Gobierno de México, 2022), Jalisco has the second largest metropolitan area in the country. This major metropolitan area is the city of Guadalajara, also known as the Mexican “Silicon Valley”, where for years the government and entrepreneurs have been working to transform the municipality into a technological destination for investment and achieved it inserting the area as a global power in digital transformation.
Economy and Business
The Guadalajara Metropolitan Area is stated as one of the most competitive regions, competing in different industries like trade, hotels, and restaurants, but leading in manufacturing and construction. This region is proud of its cultural inheritance, hence being number one in ranching, production of berries, agave (tequila), dairy products, etc. Agriculture and traditions are directly linked, since the city of Tequila, Jalisco is the birthplace of this distilled liquor and possesses the Designation of Origin. Also, this area is where the mariachi tradition was born and, although it is not the place of origin, the national sport of charrería is one of Jalisco’s pride traditions (Secretaría de Relaciones Exteriores, 2022).
However, this city’s objectives have changed for the last decade. In despite of its continuing growth as a manufacturing power, Guadalajara succeeded in positioning as a city of innovation, an important technological and software cluster and IT capital. A whole new ecosystem of tech startups has been established in the region, as it houses about 600 high-tech companies, more than 150 startups, 78,000 IT professionals, 35 design centers and 4 research centers (ConnectAmericas, 2015).
Between September 2016 and January 2020, the Guadalajara’s tech startup ecosystem we know started its journey. Jalisco is considered one of the main states for doing business in Mexico, along with Puebla and Estado de Mexico, where Guadalajara ranks number 15th as a capital city where it is easier to open a company, followed by Mexico City in number 18th (Vargas, Arias, & Echeverri-Carroll, 2020).
According to StartupBlink (2022), the startup ecosystem of Guadalajara ranks at number 3rd in Mexico and 3rd in Central America, with top industries in fintech, social & leisure and software and data.
This means that Guadalajara is more than an attractive market for international investment. Data shows that international sales of Jalisco were up to US$30.5B and a total of US$37.7B in international purchases in 2020, while at a national level, international sales were up to US$491B and US$503B in international purchases that same year. In Jalisco, the main exported products were telephones, data processing machines and units, motor cars and other vehicles mostly destined for the United States (Gobierno de México, 2022).
The goals of international investment in Guadalajara are changing towards innovation. Mexico is recognized as a top country for global investments in manufacturing and nearshoring practices. However, the Mexican Silicon Valley aims to transform the region's business. An excellent example of this innovative transformation is Manuel Ávalos and his work in IBM México as an inventor, where he helped grow the number of patents in the Technological Campus of IBM in Guadalajara. IBM has registered as patents technologies in diverse fields like Artificial Intelligence, cybersecurity, storage in the cloud, and one of Manuel Ávalos projects, a technology for detecting breast cancer from microcalcifications that appear on mammography images (Riquelme, 2018).
Ana Peña, an opinion writer in Business Insider Mexico (2021), stated that Guadalajara is now a high lever center of innovation because it is home to more than 700 high-tech companies such as Intel, Oracle and HP and, many technologies of the future are validated first in the centers of innovation and design of Guadalajara, like the chips used in 5G antennas.
Innovation
Being stated as the Mexican Silicon Valley did not stop the ambition and growth of this city. In 2012, the project of Ciudad Creativa Digital started as an initiative of the Massachusetts Institute of Technology (MIT) to create a digital industry complex to house multiple enterprises and institutions of the technological field (Ciudad Creativa Digital 2022). Carlo Ratti, professor of Urban Technologies and Planning Director of the MIT Senseable City Lab, believes this urban regenerating project will change the way of living and working with new technologies in Guadalajara.
Parque Morelos was known to be the heart of Guadalajara; this historic center is now where the ambitious project of Ciudad Creativa Digital continues to expand. In 2015, the project became alive again after many years of stagnation, resulting in a historic inversion of 4 billion pesos (approx. USD 200 Mio.) and creating more than 400 new jobs. Some of the companies that are present are leaders in digital media are: Mango Films, Semillero, Ool Digital, Tecnológico de Monterrey, AMBER, FFFRAME, El Heraldo de México TV, Plai (Plataforma Abierta de Innovacion) and Grupo PiSa Lab (Ciudad Creativa Digital Oficial CCD (2021).
Note. Ciudad Creativa Digital By Notisistema (s.f.) [Photograph]
The city of Guadalajara has benefited from the immense support that exists from the government and diverse programs dedicated to innovation and entrepreneurship. A quite interesting distinction that is relevant to point out is, that the subsidies are focused in technological and innovative sectors with the objective of having startups with export competitiveness. Such entities are: The Secretary of Innovation Science and Technology (SICyT), The Secretary of Economic Development (SEDECO), The State Council of Science and Technology (COECYTJAL), The Jalisco Fund for Business Development (FOJAL), The Jalisco Institute of Information (IJALTI), Scientific, Technological and Innovative Entrepreneurship Consortium and, the project of Ciudad Creativa Digital (Vargas, Arias, & Echeverri-Carroll, 2020).
The journey of Guadalajara’s urbanization and growth is an impressive example of the capabilities this country possesses. The efforts that could be made for promoting the industry and investment are endless in each region. To summarize, the success of Guadalajara is owed to the local talent, which is the result of the high level of education and the great investments in infrastructure projects.
Ciudad Creativa Digital. (2022). Retrieved from https://ciudadcreativadigital.mx
Ciudad Creativa Digital Oficial CCD. (2021). Distrito Creativo Guadalajara. Retrieved from Youtube: https://www.youtube.com/watch?v=XSSF8YPBaDo
ConnectAmericas. (2015). Guadalajara, the Mexican Silicon Valley. Retrieved from https://connectamericas.com/content/guadalajara-mexican-silicon-valley
Echauri Morales Arquitectos. (n.d.). Puente Matute Remus. Guadalajara, Jalisco [Photograph] Retrieved from https://echaurimorales-arquitectos.com/portfolio/puente-matute-remus/.
Gobierno de México. (2022). Data México. Retrieved from About Jalisco: https://datamexico.org/en/profile/geo/jalisco-jc?redirect=true
Jalisco Gobierno del Estado. (2022). Charrería: Orgullo de Jalisco. Retrieved from https://www.jalisco.gob.mx/es/gobierno/comunicados/charreria-orgullo-de-jalisco
Notisistema. (n.d.). Ciudad Creativa Digital [Photograph] Retrieved from https://www.notisistema.com/noticias/ciudad-creativa-digital-esta-ocupada-en-un-95-por-ciento/.
Peña, A. (23 de august de 2021). Guadalajara: cuna de tequila, mariachi y el Silicon Valley mexicano. Retrieved from Business Insider Mexico: https://businessinsider.mx/opinion-guadalajara-silicon-valley-mexicano/
Riquelme, R. (09 de january de 2018). Patentes, testimonio de madurez de la comunidad técnica: IBM México. Retrieved from El Economista: https://www.eleconomista.com.mx/empresas/Patentes-testimonio-de-madurez-de-la-comunidad-tecnica-IBM-Mexico-20180109-0107.html
Secretaría de Relaciones Exteriores. (04 de april de 2022). Jalisco in your pocket. Retrieved from https://embamex.sre.gob.mx/sudafrica/images/economica/JaliscoInYourPocket.pdf
Secretaría de Turismo del Gobierno del Estado de Jalisco. (2022). Jalisco: Cuna del mariachi. Retrieved from Visit Jalisco: https://visitjalisco.com.mx/jalisco-cuna-del-mariachi/
StartupBlink. (2022). The Ecosystem of Guadalajara Startups. Retrieved from https://www.startupblink.com/startup-ecosystem/guadalajara-mx
Vargas, M. I., Arias, A. d., & Echeverri-Carroll, E. (2020). Las startups de base tecnológica y rápido crecimiento en la ZMG. Zapopan: Universidad de Guadalajara. Retrieved from https://www.cucea.udg.mx/include/publicaciones/coorinv/pdf/Lasstartupsdebasetecnologica.pdf
[Photograph of agave in Jalisco] (n.d.) Retrieved from https://wallpaper.dog/jalisco-wallpapers