Texas-Mexico economic ties and trade in transition
Tech industries are playing an increasingly bigger role in Texas-Mexico economic relations.
.Among border states, Texas is the undisputed leader in cross border trade with Mexico. Texas-Mexico economic cooperation is clearly visible through an examination of the volume of traffic passes through Texas commercial land ports on its way to and from its southern neighbor. Although percentages may have risen in recent years, according to the U.S. Bureau of Transportation Statistics,in 2010 sixty-seven percent of truck crossings that transacted across the US-Mexico border did so through Texas. As for rail, the percentage was even higher at eighty-six percent.
A significant percentage of Texas-Mexico economic ties are directly related to Mexico’s maquiladora industry. While manufacturing activity in Mexico delivers significant economic gains for the U.S. in terms of exports of American raw materials, components and sub-assemblies that are incorporated into finished products south of the border, as well as from transportation and distributionactivities that manufacturing and movement of goods from Mexico to US consumer markets creates, Mexico, in turn, benefits as a recipient of foreign direct investment (FDI) from companies seeking to benefit from a skilled workforce, as well as a favorable geography and cost structure found in Mexico. Historically, Texas-Mexico economic cooperation has been composed of activity that has taken place in traditional industries such as textiles and automotive, for example. Today, however, as Texas increasingly moves toward becoming a leading high-tech location for US business, its long-time economic partner and geographic neighbor, Mexico, is making the transition to play a key role in capitalizing on the changes that are taking place.
Lone Star State tech start ups now view tapping into Texas-Mexico economic ties as an important factor to take into account when devising strategies to ensure their success. While new technologies might develop as a result of R&D done by firms located in Austin, or as a result of activities that take place in business incubators in places like San Antonio and El Paso, Texas high tech start ups can look to Mexico when they launch product and require manufacturing in volume. The combination of Texas’ growing high tech preeminence and Mexico’s increasingly well trained young, plentiful and globally competitive workforce is propelling Texas-Mexico economic ties and trade to a new, nore sophisticated level. This is not the case in manufacturing, however.
iTexico is an IT solutions company that is based in Austin. It’s CEO, Anurag Kumar, is bullish on the tech talent that is available in one of Mexico’s largest cities, Guadalajara. Kumar’s research on the Mexican IT market has demonstrated that the country is home to “half a million IT professionals, making it (Mexico) the fourth largest” source of information technology professionals in the world.
Once upon a time, companies looked toward looked toward the Far East for low-cost manufacturing solutions and other services. Such is not the case in this day and age. Tecma’s president and CEO, Alan Russell, points out, with accuracy, that because of wages that are rising at a rate of up to twenty percent annually, and higher shipping costs and longer shipping times now time is better than the present for executives and the businesses that they pilot to take advantage of historically solid Texas-Mexico economic ties.
The original source article for this post can be found at techcrunch.com
Photo credits: Heisenberg Media