Nuevo Leon, Basing Strategy on Industry NeedsBy Jan Hogewoning | Wed, 07/08/2020 - 06:57
Q: How did you devise the strategy for the state’s economic development?
A: Our strategy emerged from many consultations with stakeholders across different industries and other economy-related agents. We found that there were many issues that were not being properly addressed. Regarding economic development, the role of the federal government is to establish bilateral treaties with other countries, establish tax policies and devise subsidiary plans to stimulate growth and employment. The state government, however, has to come up with a strategy that encourages growth of the local economy. We acknowledged that entrepreneurs and not the government are the main local employment generators. Universities and technical schools and not the government are the institutions best suited to impart education for the population. Therefore, we devised a three-dimensional model that brings together the private sector, academic institutions and the government.
We approached industry chambers, clusters, unions and representatives from educational institutions and established a dialogue about important subjects. Together, we defined 10 economic factors for economic growth that could enhance the economy’s performance. Taking care of these factors allows us to improve the economic environment week by week and month by month. In collaboration with the Strategic Planning Council of Nuevo Leon (CONL), we came up with a plan that will stay in place even when the government administration changes. The first strategic plan was drawn up three years ago and goes as far as 15 years. Every three years it is updated. The plan is compiled with the contribution of economists from various institutions, such as COPARMEX, the Monterrey Institute of Technology and the University of Nuevo Leon.
Q: What role does the education system play in your strategy?
A: We have an excellent educational system in the state already, but we needed to improve the correlation between what industries demand from human capital and what is taught at schools. Some trades and specializations have greater demand than others. Our educational institutes reacted by introducing new programs or modifying current ones. At the same time, we re-orientated scholarships to in-demand degrees to stimulate enrollment in these areas.
Our state has the highest average salary in the country, but there are still many people with very low wages. In response, we built a program to help people who are paid very little to take training courses for different subjects, such as a technicians, truck drivers or carpenters. These training programs significantly increase wages and quality of life. Because their skills are in demand, many come out with a salary higher than those trained at the best private schools. In some cases, people have not completed elementary or secondary school, but we have found a way around this by allowing them to sit through a basic reading and comprehension test. If they pass, then they become eligible for receiving training. I do not see a problem with raising salaries, even though it may push certain sectors, such as textiles, out of our region. It shows that people in our state are getting a better life.
Q: Speaking specifically of the automotive sector, what vision do you have here?
A: Nuevo Leon hosts both Mexican and international automotive companies. KIA is the main OEM but there are many companies that make components for cars. There is a lot of communication not only within the automotive cluster but also with parties such as the Monterrey Institute of Technology. Some companies have reinvented their product portfolios to meet a changing global demand. We believe it is important to connect small and medium-sized businesses to larger companies so they can learn and potentially receive funding for expansion. At the same time, we try to bring together universities, technical schools and automotive companies to cooperate toward solving the market’s needs. Overall, the idea is to improve the value chain offering and reach a higher percentage of nationally produced goods.
Q: What are your principal objectives for the next few years?
A: Our goal is to be the most advanced state in all of Latin America by 2025. One potential threat to our competitiveness is that developed countries are able to produce things at a lower cost because of the increased prevalence of autonomous robotic manufacturing. However, we have great talent here in Nuevo Leon and are moving in the right direction. In addition, we have the benefit of a strong collaboration between our many economic stakeholders.
Roberto Russildi has a Bachelor’s in chemical and systems engineering and an MBA from the Monterrey Institute of Technology. He was appointed Minister of Economy and Labor of Nuevo Leon in 2018 after being Minister of Sustainable Development of the state