Navigating the Path to Industry 4.0 in MexicoBy Jorge Rave | Tue, 08/17/2021 - 09:00
New technologies are not just creating opportunities for businesses, they are changing the ways in which goods are produced. Despite the many challenges the COVID-19 pandemic has imposed on our healthcare system, the economy and our everyday lives, Export Development Canada (EDC) in Mexico has observed a powerful trend toward automation and data exchange within the country’s manufacturing sector. This trend is also known as the Fourth Industrial Revolution or Industry 4.0. As these changes reshape the business landscape, Mexican manufacturers must think strategically when determining where to focus and invest.
Take for example the Mexican automotive industry which, considering its impact on exports, production, employment, and attracting foreign direct investment (FDI), has become of strategic importance since the inception of the North American Free Trade Agreement (NAFTA). According to Invest in Mexico, a state-led initiative to promote foreign investment, the automotive industry now contributes 20.8 percent to the country’s manufacturing GDP and is the main net foreign exchange generator. Moreover, Mexico ranked seventh in light-vehicle production globally, with 2,072,699 light vehicles manufactured in 2020, and the largest export market for US and Canadian autoparts, according to the International Organization of Motor Vehicle Manufacturers (OICA).
To remain competitive, Mexican businesses will have to lean into opportunities presented by Industry 4.0. According to EDC’s Global Trade experts, our Mexican manufacturing clients are ready and keen to explore new avenues for automation, both at home and abroad. That’s where EDC can help. Thanks to EDC’s Business Connection Program, Mexican firms have access to innovative Canadian solutions in the automotive sector and beyond to accelerate their growth. For over 20 years, this program has not only benefitted Canadian businesses but it has supported diversity in the supply chains of Mexican businesses as well.
While there is no one-size-fits-all approach to success in this new competitive landscape, there are foundational business practices that will help Mexican manufacturers achieve their goals. For example, contrary to popular belief, Industry 4.0 sees investment in human resources as a fundamental component of business transformation. This starts with strategic recruitment strategies, as well as continuous skill development and training opportunities for employees. As part of our role as Canada’s Export Credit Agency (ECA), we are committed to helping our Canadian and international manufacturing clients build a culture of innovation and continuous improvement, so that they can not only attract new investment opportunities but also top talent – and retain it.
Another key ingredient to remain competitive in manufacturing processes and solutions is research and development (R&D). Businesses in Mexico and in Canada can start by leveraging national programs such as those offered through federal and local government institutions and associations. That being said, some innovation is best achieved by outsourcing technologies and services – domestically or internationally – to strengthen a company’s competitiveness.
For this reason, Canadian innovation is beginning to play a significant role in the North American manufacturing ecosystem. The Canadian advanced manufacturing sector, which includes the fields of robotics, automation, 3D printing and Information and Communication technologies (ICT), benefits from one of the best R&D environments in the world and a readily available wealth of talent. Canadian firms are industry leaders in advanced manufacturing and are proven allies when it comes to exporting and implementing advanced technologies.
To dive deeper into each of these areas and to navigate the path to Industry 4.0, a great place to start is by consulting industry resources made available by government and industry institutions, such as Innovation, Science and Economic Development Canada (ISED), the Trade Commissioner Service (TCS) and EDC. These organizations provide valuable knowledge, industry contacts, financial solutions and business opportunities – both at home and abroad – to help businesses along their innovation journey for the benefit of North America.