These are the entities that have favorable conditions to attract investment related to nearshoring. They have more qualified labor, better working conditions and better infrastructure. However, access to water as a basic input is a challenge.
According to the report by the Mexican Institute for Competitiveness (IMCO), Nearshoring: Priorities for regional development, the number of plants dedicated to treating industrial wastewater relative to the amount of water granted for industrial use in a region reflects the sufficiency of the infrastructure to reuse water resources and guarantee their sustainable supply. In this regard, Campeche and Baja California Sur had the best performance in the matter, while Veracruz, Nayarit, Chihuahua, Coahuila and CDMX showed an insufficiency.
In addition, the supply of reliable and competitively priced electricity is one of the guarantees that companies must have. The lack of qualified labor, poor public transportation and insufficient infrastructure for wastewater treatment are the main obstacles that hinder investment and economic development in Oaxaca, the State of Mexico and Zacatecas.
In Aguascalientes, the difficulties are linked to the availability and infrastructure of water; for Coahuila, the command of English or the regulatory framework are more pressing problems.
In contrast, Oaxaca, the State of Mexico and Zacatecas present challenges to attract investment due to the lack of qualified labor, poor public transportation and insufficient infrastructure for wastewater treatment.
IMCO researchers highlight that, in recent years, nearshoring has been pointed out as an important opportunity to increase the attraction of investments focused on promoting industry. However, to realize this opportunity, the different regions of the country face some structural challenges in various key issues.
In this regard, IMCO determined 21 variables related to the labor market, basic inputs, housing and the regulatory environment in the entities.
The research shows that in the four axes analyzed: housing and services; labor market; basic inputs and regulatory environment, Nuevo León, Aguascalientes and Coahuila have a better performance than the rest of the entities and have facilities to take advantage of the trend of relocation of productive chains. In contrast, Oaxaca, State of Mexico and Zacatecas are entities whose structural conditions make it difficult to attract investments and the increase of economic activities linked to nearshoring.
For Grupo Base, nearshoring is a golden opportunity that is not being fully exploited. It is estimated that Mexico is receiving only between 10% and 20% of the foreign investment flows from the relocation of companies. In addition, these investment flows are very focused on some federal entities and manufacturing subsectors.
Investment decisions are long-term. Once a company has decided to migrate its production to another country, it will take between 15 and 20 years for it to consider moving it again. “If Mexico does not take advantage of the current opportunity of nearshoring, it will have left aside the possibility of greater formal job creation, growth in gross fixed investment, increased productivity and greater economic growth for many years.
Nuevo León, Aguascalientes and Coahuila have favorable conditions to attract investment related to nearshoring. They have more qualified labor, better working conditions and better infrastructure. However, access to water as a basic input is a challenge.
In Aguascalientes, the difficulties are linked to the availability and infrastructure of water; for Coahuila, the command of English or the regulatory framework are more pressing problems.
Oaxaca, the State of Mexico and Zacatecas present challenges to attract investment due to the lack of qualified labor, poor public transportation and insufficient infrastructure for wastewater treatment.
Source: lasillarota
