Offshoring future hinging on external factors, Canieti says

- Wednesday, March 2, 2011

Offshoring future hinging on external factors, Canieti says

Future challenges to Mexico's offshoring industry will come more from external economic and social factors rather than internal issues, the president of Mexico's IT association Canieti, Santiago Gutiérrez Fernández, told BNamericas.

Mexico's IT service exports will surpass the Philippines' shipments and become the world's third largest by 2013 as long as the country can avoid pitfalls such as economic turbulence, Gutiérrez said.

"The factors are more exogenous than endogenous to the IT sector," he said. "The first is the continuation of the macroeconomic policies that allow Mexico to maintain political and economic stability."

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"The second element that could be an obstacle is the path that the global economy ends up taking, and also the protectionism that countries implement during the next 2-3 years. We are living times of significant challenges and competition between countries."

Gutiérrez warned that the local IT industry is susceptible to the so-called "currency wars" and the fallout that they may bring.

"We are not free from the risk of having things go off track because of inflationary matters or temporary shortages - now in particular in energy and food - and also because of commercial wars that have been based on incorrect instruments such as exchange rate," he said.

An additional thorn in the side of the IT industry is the continued drug violence, which is creating a climate of uncertainty and skittishness, according to Gutiérrez.

UPSIDE

Mexico continues to raise eyebrows of industry observers such as international consultancy AT Kearney, which recently ranked the country as top in Latin America and sixth globally in its latest Global Services Location Index study.

The survey, which showed Mexico advancing five positions over the previous version, identified the best countries for offshore services based on the availability of human resources, business environment and financial resources.

"Government, industry players and academia have collaborated closely in recent years to promote Mexico's advantages for information technology," Gutiérrez said, pointing to initiatives such as software industry development program Prosoft, which has a US$65mn budget for 2011.

The existence of Nafta will continue to encourage investments by US tech giants, while Indian firms are also expected to increase their incursion into the Mexican market during the next few years.

Canieti expects Mexico's total ICT industry to expand roughly 11-12% in value terms this year, after posting similar growth rates in 2010, the executive added.