Economy in Mexico: 2008
The economy in Mexico is free market that recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is one-fourth that of the US; income distribution remains highly unequal. Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Mexico has 12 free trade agreements with over 40 countries including Guatemala, Honduras, El Salvador, the European Free Trade Area and Japan, putting more than 90% of trade under free trade agreements. In 2007, during his first year in office, the Felipe Calderon administration was able to garner support from the opposition to successfully pass a pension and a fiscal reform. Calderon has stated that his top economic priorities remain reducing poverty and creating jobs.
SOURCE: 2008 CIA WORLD FACTBOOK
Mexico’s Silicon Valley
Guadalajara, the second largest city in Mexico, has become a hot spot for manufacturing and engineering services in the electronics industry. It is obviously much more cost effective for American companies rather than outsourcing halfway across the world.
“They say Guadalajara has become Mexico’s Silicon Valley. That’s because so much engineering has grown in the area,” said Eric Miscoll, senior consultant at Technology Forecasters. “Freescale Semiconductors alone has hundreds of engineers in Guadalajara.” According to the Secretaria de Economia of Mexico, there are 700 companies with manufacturing in Guadalajara. They include among them IBM, HP, Flextronics, Solectron and Benchmark.
That's, in part, because the Mexican government has invested heavily in R&D and design engineering in an attempt to move up the value chain in electronics manufacturing. Further, the government offers a 30 percent new tax credit for companies’ spending on engineering and technology.
Some other foreign corporations that now call Guadalajara home are General Electric, Motorola, SCI, Kodak, Siemens.