It is not unreasonable to think that the next Silicon Valley could be in Mexico, be it in Guadalajara, Querétaro or in the country’s capital.
More and more businessmen and companies are betting on Mexico to catapult industries that are the spearhead of global technological development. The media recently reported the arrival in Guadalajara of the artificial intelligence company of the Silicon Valley pioneer, Thomas Siebel, with a view to recruiting engineers and data scientists in a development center that is incorporated into the information technology sector, that is advancing by leaps and bounds in western Mexico.
The interesting thing about the news is that it is not an isolated case. Venture capital investment in Mexico is reaching extraordinary levels: in 2021, according to information from the Transactional Track Record, there was a 294% increase in this type of investment in startups compared to the previous year. This coincides with growth in industries such as fintech, artificial intelligence and information technology.
Therefore, it is not unreasonable to think that the next Silicon Valley of Latam could be in Mexico, either in Guadalajara, Querétaro or in the capital of the country. This of course can bring great benefits, but it will also require major efforts to achieve it.
Silicon Valley in Mexico: Innovation and development
In his book Industrial Development in Mexico (Routledge, 2019), Monterrey-born researcher Walid Tijerina accurately portrays the efforts that were needed for Aguascalientes, Monterrey, and Querétaro to become high-calibre industrial clusters. Time and planning were required, as well as joint work between the Government and the private sector.
However, the size of the mission was only matched by the size of its fruits. Since it brought with it positive spirals of innovation and development. To the extent that the ecosystem was ideal for privileging technological progress -both national and international companies-, spaces for exchange and collaboration were consolidated within the industries that later ran aground on the implementation of highly creative ideas.
Something fundamental about this type of industrial articulation is that they end up generating a trickle and economic spillovers for more sectors of society. Through the generation of jobs and the arrival of enabling technologies, little by little other companies can flourish taking advantage of the leverage offered by these clusters.
In addition, as more companies from an expanding industry cluster in a region, more and better prepared talent is required, which offers an opportunity for neighboring educational institutions to strengthen their offer.
A Mexican Silicon Valley could well generate these positive spirals in which entrepreneurs can take advantage of the context to exploit their creativity, channel their ideas and collaborate to solve the region’s problems. The conjunction of talent, industry and innovation could lead Mexico to become a benchmark worldwide.
What are we missing?
To a large extent, the initial impulses of entrepreneurs need to be supported more vigorously. That they have access to multiple and flexible financing. Encouraging all forms of financing is vital so that new proposals do not die in the first years of life.
In addition to this, support and networking spaces are key so that entrepreneurs can promote and support each other, based on their experience and knowledge, because who knows an entrepreneur better than another entrepreneur?
The next Silicon Valley may well be in Mexico. But if something can be learned from history and previous success stories, it is that collaboration, innovation, creativity and, above all, sources of financing are needed. Will the country be able to accompany fledgling companies on their way to a huge transformation? The elements are in place for it to be so.