Resilient Economy and a World of Opportunities in JaliscoBy Ernesto Proal | Fri, 02/12/2021 - 09:17
Jalisco’s economy is one of the most diverse in Mexico. From agriculture to semiconductor design, the state has evolved a very sophisticated business ecosystem in which several types of businesses have either evolved or migrated here and flourished. This diversity has also given Jalisco significant resilience against economic crises. There are at least three elements that comprise the basis for the current configuration of the state’s economy: the culture (attitude) of the people of Jalisco, the geography and natural environment of the state and the talent present in our population.
Traditionally, the people of Jalisco have been recognized as entrepreneurial, innovative and creative. This innovation and creativity is evident by the fact that the most famous Mexican traditions were born in Jalisco, like mariachis and tequila, icons of the Mexican culture. Lately, the creative spirit of our people, embedded in our DNA, has attracted huge R&D centers from companies such as chipmaker Intel Corp. and automotive electronics giant Continental, with hundreds of engineers inventing the future of technology. That same spirit has also given rise to several new local companies and even industries, such as technology startups in the software industry that are growing fast and the biggest number of micro-breweries of any state in Mexico.
Geography and nature
Jalisco’s location, in the central west part of Mexico and close both to the center and to the Pacific ports, has historically made Jalisco and especially its capital city, Guadalajara, a natural hub for the trade routes between North America and the Far East. In the past, this gave Guadalajara a strong commercial vocation, which is still present in its very strong commerce and services sector, represented by one of the strongest and best managed chambers of commerce in the country. Guadalajara’s geographic proximity to Mexico’s main seaport in terms of capacity (Manzanillo, 300km south of Guadalajara), and home of the second-biggest airport in Mexico for cargo (soon to be the first, after the second runway is completed in 2022), has attracted a significant number of logistics operations, recently bolstered further by the explosive growth of the e-commerce business models that rely on logistics for product delivery. Among others, FEDEX, Amazon, Mercado Libre and Walmart have established logistics warehouses around the city.
Also, the state government is actively working with our neighbor state, Aguascalientes, to complete the railway between our capital cities. This segment of around 200km will save almost one full day in transportation of products between the ports of Manzanillo and Laredo, Texas. It will also reduce the time and cost for shipments (via railway) of heavy products such as cars. These are factors that will only increase the states’ competitive advantages for these industries.
As for the rich natural environment of Jalisco, including excellent weather with mild winters and good levels of rainfall in the summer, it has allowed the evolution of a strong agricultural sector that has positioned Jalisco as the No. 1 producer of food in the country. This industry is present in the northeast of the state (the “Altos” region) with products such as corn, vegetables and milk. It is also growing a great deal in the south, with berries being cultivated inside greenhouses.
Jalisco also has one of the best levels (hours per year) of direct sunlight in the country. Besides helping agriculture, this fact has attracted the installation of vast numbers of photovoltaic cells for electricity generation, both on rooftops (Jalisco is No. 1 at the national level for number of rooftop solar panels) and the installation of huge solar generation facilities, such as Potrero Solar by Spanish company FRV, with a peak capacity of 270MW, located in the Altos region.
In this regard, Jalisco’s State Energy Strategy aims to assure energy availability at competitive prices while complying with the COP21 (Paris Agreement) commitments. Finally, the tourism industry has also taken advantage of this natural diversity, from Puerto Vallarta on the Pacific, a true tourist mecca, to several “magic towns” with themes that range from mountain escapes to religious sanctuaries.
We understand that the main ingredient needed to keep evolving and developing our economy is the talent of our population. Because of this, the state decided to boost education, especially higher education, through a structured approach by establishing a Ministry of Innovation, which is mainly responsible for managing the development of talent through a network of state-owned technology education campuses (the Mario Molina Institute) that offer degrees in engineering and technology adjusted to the needs of the growing high tech and advanced manufacturing industries.
Currently, Jalisco universities and technology institutes graduate 10,000 new engineers each year, with about half of them in IT-related degrees. Also, the Economic Development and Innovation ministries work together on specific projects to continue developing this talent value offer, as evidenced by the new Semiconductor Development Institute.
All of the above have allowed Jalisco to build strong resilience against economic downturns. As an example, the state was first in Mexico in generation of new jobs during the recovery period after the COVID-19 shutdowns, and also attracted as much foreign direct investment in the first nine months of 2020 as the whole of 2019, a number that itself is bigger than the FDI that landed in 2018.
So, welcome to Jalisco. A true land of opportunities.