Guadalajara, Mexico
Tech company cluster
Why choose Guadalajara?
First of all, Mexico has many advantages over other Latin American countries because of its close proximity to USA. In general, you find that Guadalajara has low labor costs, educated people, good infrastructure, low material costs, State incentives, and a stable and growing economy. If relative low cost and close proximity to home are important, than Guadalajara is worth considering.
Cluster of innovation
Guadalajara is often called the "Silicon valley" of Mexico, becase of the number of companies there....a cluster. Therefore, it is relatively easier to find high tech employees, and suppliers.
Trade agreements
Mexico has a trade agreement with the USA and Canada (NAFTA), which is good for manufacturing industry in Mexico.
Infrastructure
the infrastructure is more than adequate and is improving every month.
Proximity to the USA
The proximity in flight time is also important. As the price of oil increases, the shipments from far-away places become more expensive, so the comparative advantage of cities in Mexico should increase as the cost of oil goes up and up.
Expat Lifestyle
Guadalajara is a relatively safe and friendly location for expatriates to live. On weekends, you can go to Vallarta or Cabo during the weekends, and it’s a close flight back to the USA for family visits. In addition, there are many big Tech companies already there, so the expat community is large and diversified.
Government Incentives
Because they already have lots of business, its unlikely that Guadalajara will give your company many incentives to move there...as was seen when Intel considered Guadalajara, but was not offered significant incentives.
But, the situation is transparent, and you wont expect to see changes in the deal in future administrations.
Labor Unions
Mexico has strong labor unions, which was a deal-breaker for Intel...which chose to put its plant in Costa Rica instead.
That said, however, companies (like IBM, Flextronics) can outsource their workers at different levels and this is done in numerous high tech companies.
Education system
The education is good quality, and there is a large pool of skilled engineers.
Electricity
Electical power in the 1990's was only $.02 per kilowatt hour, which was significantly cheaper than Costa Rica's rate even after the special incentive of $.05.
Local content laws
Ever since the beginning of the 90’s, there has been a series of new legislation easing local content laws.
Hurricane -safe
Guadalajara is safe from the line of Hurricanes. (unlike many other central american cities)
Safety
For companies such as Intel which are shipping very valuable trucks full of very expensive goods, security is very important.
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