And the benefits of proximity add up, says Eduardo Ruiz Esparza Flores, president of CANIETI, a Mexican IT trade group working with the Mexican government to promote the country as an outsourcing destination. He is also CEO of RFID Native, which builds radio-frequency identification systems.
"There are over 300 flights a day" between the U.S. and Mexico, Flores noted during an interview at the Gartner Symposium ITxpo. Bandwidth costs on software projects also add up, so the closer your programmers are to corporate headquarters, the better.
"We are looking for complex and network-needed projects with high response requirements," he said.
The language barrier is easily hurdled, according to Flores, and in many areas, U.S. executives can stay in the U.S. and commute down to work.
Three years ago, the Mexican government launched a program, called Prosoft, to promote the country's tech industry. The goal is to increase the size of the Mexican IT industry to $15 billion annually by 2013. Two weeks ago, the government launched an advertising and recruiting campaign for Prosoft.
Mexico, however, isn't cheap compared with the larger Asian nations when it comes to outsourcing. Mexico's contract-manufacturing industry was hit hard when China ramped up as a manufacturing powerhouse.
Still, Mexican labor is cheaper than American labor. Newly minted Mexican engineers make around $1,200 a month, Flores said, about a third of what young engineers earn in the U.S. Intel has about 1,000 employees in Mexico, he added. Freescale also has development operations.
Technology also remains a popular subject with students in the country. Mexico has around 400,000 students studying IT-related subjects in universities and technical schools. Roughly 60,000 of them graduate from these programs annually. The Monterrey Institute of Technology, which used Massachusetts Institute of Technology as its model, remains the country's premier technical university.
