Landing SMEs in Aerospace Value Chains in Mexico and Abroad

While the Mexican aerospace industry has experienced double-digit growth rates in the last years, there are still several challenges to counter for Mexican SMEs to get onboard global supply chains.

“It is necessary to develop an aerospace industry with a strong national capital, which means developing SMEs,” said Jorge Gutiérrez, Dean of UNAQ, during the “Opportunities for Mexico’s SMEs in the Local Manufacturing Chain” panel of Mexico Aerospace Forum 2018 that took place on Wednesday at Sheraton María Isabel in Mexico City. Roberto Corral, Vice President and General Manager of Innocentro agrees and underlines that SMEs are the powertrain for company development in various countries including Germany. “The secret for SMEs to take the next step in their advancement is that they start developing their own products,” he adds.

Eugenio Marín, CEO of TechBA Madrid-Montreal and TechBA Aerospace, points out that industrial diversification is a huge challenge for SMEs. He points out that the main issue is usually not technical capacities or even access to capital, but in the mindset of Mexican SMEs. “The Mexican manufacturing industry is used to waiting for large foreign companies to come and buy their products and sometimes even lack a commercial department,” he points out. “SMEs need to look forward to become global companies.” On the other hand, Claire Barnouin, Executive Director of Monterrey Aerocluster, says Mexico must learn how to sell its engineering capacities because the country offers several advantages in that regard. “The country needs to go from a scheme where SMEs lack control over component designs to one in which they develop more added-value projects,” she points out.

Marín points out that a study carried out by TechBA discovered that there are about 182 SMEs in Mexico that are interested in entering aerospace value chains. He adds that 90 percent of these SMEs are not hindered by the lack of capital or experience to engage in aerospace processes. For instance, he says 74 percent of the SMEs studied do not understand how to integrate into the aerospace supplier base and up to 82 percent have no aerospace clients. “We expect to help them achieve that in less than three years,” points out Marín. “Our job is to help companies fill these gaps.”

He adds that Mexican SMEs face the challenge of a lot of idle capacity that usually means a cost of opportunity. In lieu of this situation, TechBA has created a series of transfer centers where SMEs can reach aerospace clients in order to develop one-stop-shops.

Looking ahead, Marín says TechBA is in talks with the new federal administration to create FONAERO, which will be a fund destined to support the development of SMEs. “We need to boost the penetration of SMEs in the aerospace supplier base,” he underlines. In this area, Gutiérrez adds that the triple-helix does not work without companies’ capacities, but that the absence of public policy with a long-term perspective also weighs on the development of SMEs. Corral adds that without the support of public authorities it will be difficult for the industry to develop beyond the attraction of OEMs’ FDI. Barnouin points out that it is necessary that the new government carries on the efforts that have been made previously.

Similarly, Eugenio underlines that Mexico’s aerospace industry is competing against the world. He points out that while nations such as China have developed their industries through offset policies, Mexico remains a competitive country despite lacking these incentives.

In terms of the role of universities in supporting SMEs’ development, Gutiérrez underlines that there are over 30 academic institutions training technicians, engineers and researchers for the aerospace industry and developing aerospace technology. Barnouin underlines that these institutions have the role of training the labor of the future. “In comparison, aeroclusters must offer academic institutions a feedback on the competences that talent needs to develop,” she points out.