Nearshore Americas

NSAM Whitepaper Says Mexico Better than India for U.S. Outsourcing Buyers

In its latest whitepaper, Nearshore Americas says Mexico could be a better option than India for outsourcing service buyers in the United States. The advantages Mexico offers far outshine India’s benefits, says the report titled “Superior Positioning: A Fact-based Analysis of Why Mexico Outperforms India for Software Services.”
Unlike Mexico, India is far away and lacks cultural affinity and time-zone alignment with the United States. Mexico’s disadvantage is the bad press, which has often portrayed this Spanish-speaking country as violent and dangerous to visit.
India is currently the biggest outsourcing service provider, largely due to its huge army of technology workers. The report says India appears to be focusing more on larger turnover than innovation. “India appears to have hit a wall: The focus is now on the commodity business, and innovation is lacking,” says the report. “Unlike workers in the United States or Mexico, Indian workers can be reluctant to question approaches, test their understanding, and challenge assumptions.”
Thanks to NAFTA and geographical proximity, visiting Mexico is far easier for the U.S.-based service buyers. The whitepaper, which is sponsored by NearShore Technology, a provider of next-generation IT services, also offers important comparisons with Eastern Europe and China.
Mexico’s infrastructure, according to the report, is expanding like never before. President Enrique Peña Nieto has committed to spending US$300 billion on transportation and communications infrastructure during his six-year term, which ends in late 2018.
Shining light on growing infrastructure and ICT capabilities in the Mexican cities of Puebla and Mérida, the report examines how Mexico is combining its advantages with its expanding pool of technology professionals.
Since 2012, Mexico has been graduating on average 130,000 engineers and technicians a year from universities and specialized high schools, more than Canada, Germany, or even Brazil. As well, there are almost 29,576 science graduates. As there is high unemployment among educated workers, there is little or no pressure on wage inflation.
Moreover, Mexico’s population is young compared to both developed and developing nations, says the report, adding that the total median age for Mexico is 26, compared to 37 in the United States. There are 15.6 million Millennial internet users between the ages of 15 and 34 in Mexico.
Mexico is also now reporting the fifth-fastest internet connection speeds in the Americas, behind only the United States, Canada, Uruguay, and Chile. Mexico’s IT services sector is expecting sales of US $6.2 billion in 2016, with analysts anticipating the figure to grow to US $8.2 in 2019.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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