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Program for the Development of the Software Industry, PROSOFT

Program for the Development of the Software Industry, PROSOFT. Sergio Carrera Riva Palacio Director General of Domestic Commerce and Digital Economy Ministry of the Economy Government of Mexico. Mexico’s Economy Overview. Total population: 104 million GDP: 625 BUSD (world’s 10th economy)

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Program for the Development of the Software Industry, PROSOFT

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  1. Program for the Development of the Software Industry,PROSOFT Sergio Carrera Riva Palacio Director General of Domestic Commerce and Digital Economy Ministry of the Economy Government of Mexico

  2. Mexico’s Economy Overview • Total population:104 million • GDP: 625 BUSD (world’s 10th economy) • U.S. second trade partner (Canada 1st) • Largest FTA’s network worldwide (including NAFTA, EU, and Japan) • 4th country in number of airportsand 1st in daily flights to and from the U.S. • 7th exporting economy • Ranked 5th in per-capita foreign direct investment received • Largest spanish speaking population (U.S. – 5th) • Best country in Latin America in terms of technological accomplishment, according to the UN

  3. PROSOFT Mexico’s IT industry policy Goals (2013) • To accomplish an IT services annual production level of 15 billion USD • To reach the OECD’s average IT expenditure as an economy • To position Mexico as the leading IT powerhouse in Latin America

  4. PROSOFT – Mexico’s IT industry policy Strategies • Promotion of exports and investments in the sector • Enhancement of human capital capabilities • Adequation of the digital economy legal framework • Development of the IT domestic market • Stregthening of the local industry • Achievement of world class process capabilities • Promote cluster development countrywide

  5. State governments participating in PROSOFT Aguascalientes Baja California Guanajuato Jalisco Morelos Nuevo León Puebla Sinaloa Sonora Yucatán

  6. Human capital Highest IT undergraduate level workforce in Latin America (+100,000) 30% of current undergraduate total enrollment in IT related fields Abundant non-IT undergraduate level workforce for BPO and call centers available nationwide (lawyers, BA’s, CPA’s, HR) Infrastructure Broadband services available nationwide World class telecommunications services in main cities Sectoral experience for multinationals Manufacture Financial services Government Telecommunications Mexico’s ITES industry value offer

  7. Mexico’s ITES industry value offer Total project cost advantage (nearshore approach) Quality and process capabilites Legal framework • Reduced flight cost and time compared to the Asian region • Enhanced productivity in the solution of real time problems • Smaller amount of professionals at customer’s facilities • Electronic signature and invoice • Data protection and privacy • Intellectual property rights • In all cases, the legal framework is compatible with U.S. legislation • 3 CMM-5, and +15 CMM-4 and 3 companies • (+53 currently engaged in model implementation and assesment) • ISO-9000 adoption widely spread

  8. Mexico’s ITES industry value offer Cultural Affinity Country Environment • Compatible business environment and legal framework • Deep knowledge of the American consumer • Direct access to the U.S. Hispanic market • Political stability • Low geopolitical risk • NAFTA • (investment protection, IPR, visas, market access) • Preferential market access with the U.S., Canada, EU, Japan, and Latin America

  9. PROSOFT support for export oriented companies • Manpower training and certification • Software & equipment • Infrastructure • Process implementation and certification • Standards certification • Technology transfer and royalties • Supplier development programs • Education/training tailor-made programs with universities Cash grants on a 50% basis of total costs for: Additional grants from State governments apply

  10. PROSOFT incentives for foreign companies establishing ITES operations in Mexico • The same type of cash grants given to export oriented companies apply • Tax breaks for R&D activities • Local governments incentives (availability differs from state to state): • Payroll & Estate tax exemption • Preferential rates for land acquisition or leasing. • Simplified red tape

  11. PROSOFT grants – Sep/Dic 04 69 221 Projects supported Companies qualified for grants: • 95 companies engaged in improving their process capabilities • +1,200 IT professionals engaged in training and certifications • + 200 professionals engaged in PMI training and certification • 5 facilities for operations in embedded software, semiconductor & hardware design, and multimedia content development supported • Cash grants • worth 20 milion USD

  12. Concluding remarks • Nearshore approach • Compatible legal framework and business environment • Political stability • Competitive total project cost • Tailor-made programs to develop supplier capabilities 1. Mexico’s ITES value offer has advantages over other options: 2. Mexico’s workforce pool for BPO activities is abundant and readily available nationwide 3. Mexico’s IT industry has extensive experience working with U.S. based companies

  13. Program for the Development of the Software Industry,PROSOFT Sergio Carrera Riva Palacio Director General of Domestic Commerce and Digital Economy Ministry of the Economy Government of Mexico

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