Mexico has always been an interesting option for U.S. based companies looking for more affordable labor costs. However, over the past few years it seems many decided to go the offshoring route towards countries in Asia and the Middle-East. This, though it seemed like a trend that would not easily change, saw a major shift as the U.S. – China relations took a nosedive, and labor prices hiked up in some of the major Asian offshoring destinations. On top of that, Intellectual Property concerns arouse making American companies weary of keeping their business interests back east.
Nearshore was Coined and Mexico was Back in the Radar
With all that in mind, the American industry turned back to their long-time partner in search of better market conditions which they found in spades with a number of political, social, economic, and even public health issues that converged.
- Lower Labor Costs: Over the past years, labor costs have consistently increased in China and other neighboring offshore markets. Adding to that, with new government regulations American companies have seen their supposed savings evaporate when working there. However, Mexican wages have remained at the same level and quality has risen, making it an excellent source of software development talent.
- Covid-19: It has been trying times with the global pandemic, forcing people into their homes and bringing entire economies to a halt. However, some good has come out of the lockdown. Companies that weren’t sure how well their operations would manage off campus, were forced to test out and execute protocols to maintain productivity. What they realized was that people were actually very effective working from home. This debunked the theory that nearshore wasn’t viable due to workers being far away.
- Closeness: It became evident that offshore destinations were cumbersome and not efficient enough. From widely varying time zones and little to no contact with offshore teams, to massive language and cultural barriers, countries on the other side of the globe presented huge complications. Mexico, on the other hand, has been a business ally and partner for so long that people have found English proficiency paramount for their career development. Furthermore, any trip to meet the team was practically out of the question, especially in these pandemic days, while Mexico is only a short flight away.
- USMCA and IP Protections: With the enactment of the United States-Mexico-Canada Agreement (USMCA), U.S. based companies have a newfound interest in nearshore markets. Mexico now offers American businesses Intellectual Rights Protections (IPR) like no other agreement around the world does. Additionally, U.S. companies gained access to the Mexican and Canadian markets duty-free, as well as, other markets that Mexico has entered through other Free Trade Agreements.
- Talent: Mexico is by far one of the most technologically ready and savvy markets in the Latin American pool, graduating a great amount of students with tech-based degrees.
Developers.Net Can Help You Explore the New Software Development Hub
It is increasingly clear why so many American companies are opting for the Mexican nearshore market. From its proximity to the new political and economic set of rules put into play, Mexico is without a doubt the best alternative.
If you’re interested in taking advantage of everything that the Mexican nearshore market has to offer, with a business model that offers you much more than any other, contact us today!
Learn more about what Developers.Net can do for your business here
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