Basing Strategy on Industry NeedsBy Jan Hogewoning | Thu, 04/02/2020 - 19:34
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 the growth of the local economy. We acknowledged that entrepreneurs and not the government are the main local employment generators. Similarly, 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 and academic institutions with the government in an organizational leadership role.
We approached industry chambers, clusters, unions and representatives from educational institutions and stablished 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, Tecnológico de Monterrey 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 the human capital demands from our industries with what was 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 on different subjects, truck driving or carpentry. These training programs significantly increase wages and quality of life. Because these skills are in demand, many reach 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 take a basic reading and comprehension test and If they pass, then they become eligible for training. I do not see a problem with rising 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: What are the main challenges you face in achieving your goals?
A: One big challenge is to improve regulation. There are three regulatory orders: federal, state and municipal laws. Because they often function independently, regulatory matters can be time-consuming for both the government and companies. The first step is to define what companies need and what they have set in place. Then you need to provide a simplified process for application and verification for various permits and protocols. Lastly, the process needs to be digitalized for swift processing and better oversight. A second aspect is self-regulation. There are thousands of companies that are operating outside the regulatory framework. They operate without licenses, without the right conditions for workers or without complying with environmental standards. It is important that we ensure they get to know what the regulations are and that they get the time to put in place the measures to meet them.
Another challenge is to ensure that necessary infrastructure is in place so that established and new companies have everything they need to be productive. This includes aspects such as power generation, electricity grids, water treatment, drinkable water sources and transportation for workers. In this particular area, we have worked with experts from different chambers, including construction, housing development and industrial parks. Working together means we can apply specific zone strategies in a sensible manner.
Q: What are your main 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 we 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