Strategies to Boost Mexico’s Technology Hub

Q: What are your administration’s priorities regarding economic development? What will be your focus and which areas do you consider more relevant? 

A: We want to finish our six-year term with 5 percent growth in state GDP. Furthermore, we want to begin 2020 with growth of at least 3 percent. To achieve this, we are leveraging the key industries in the state mainly through investment but also by boosting exports. We are already national leaders in telecommunications and information technology. Now, we want to boost the use of electric vehicles by developing their production chain. We want to have at least one assembler of these types of vehicles. We have already drafted a development strategy at a state level and there are several other industries we will keep supporting, such as agricultural products and more traditional sectors like jewelry, textile and footwear

Another key pillar in Jalisco is the energy sector. During the first six months of this administration, we focused on developing the State Energy Plan to provide certainty to investors in the energy and fuels sectors. We focused on electric generation and some commercial schemes but mainly on cogeneration, which represents large investments. Our strategy has aligned to the environmental protection rules established in the Paris Agreement and we have the advantage of being among the states with the best solar radiation and strong winds. However, to succeed we also need to collaborate with the federal government to address the sector’s needs and ensure the needed distribution for everyone to access the energy generated. 

Regarding fuels, we are talking about transport networks, storage and distribution, not only of gasoline and diesel but also natural gas. The State Energy Plan also considers the transformation of the state's mobility, which will eventually move toward electrification. 

All these initiatives will lead us to 5 percent growth in GDP. We expect to be the best logistics hub in Mexico by leveraging our airport and building infrastructure around it to support its growth. We are also signing partnership agreements with big logistics hubs, such as the port of Laredo-Texas and the port of Manzanillo.

Q: How have the ratification of USMCA and the trade war between China and the US impacted Jalisco’s development?

A: At first, tariff threats made us accelerate our diversification strategy. Of course, all American investments are welcomed. We still have a strong agenda with the US, mainly with California and Texas, but we are looking forward to doing business with the Asian market. The tension between China and the US is making Chinese companies look at Mexico and specifically Jalisco when it comes to advanced manufacturing and automotive manufacturing focused on electric vehicles. We will see an influx of Chinese investment, which will be significant in reaching our GDP growth objectives.

Q: What strategies are you implementing to help digitalize SMEs? 

A: We have a digital transformation project for SMEs that is divided in three stages. The first is a cultural transformation or a digital evangelization because most of these companies, if not all of them, do not know what they ignore. In other words, they do not know they need to change and automate to join this transformation. We must change companies’ mindsets and we are relying on university students doing their social service to propagate this conversion. We are also working closely with the Mario Molina Institute, which belongs to Jalisco’s Ministry of Innovation. 

It is impossible to automate without order, which is why in the second phase we will establish a system of administrative management. The third phase of the project focuses on digitalization mainly regarding e-commerce. We also want to join the automotive manufacturing industry and all industry 4.0 efforts, which also forces us to develop the service sector to receive people displaced by automation. 

We have also created programs specifically designed to teach companies to export, including JALTRADE, which will now be the Foreign Trade Directorate. There, SMEs will get help to certify products and their value offering to enter international markets. Companies are also invited to international forums where they can offer their products on platforms like Alibaba or Amazon. We will give special priority to e-commerce in this administration without neglecting traditional retail. 

Ernesto Sánchez has as Bachelor’s in electronic engineering from ITESO and a Master’s in administration from Central Michigan University. He worked for IBM for eight years, six of them in the manufacturing area in Guadalajara