Mexico’s geographical strategic location, population size and Talent pool make it the preferred nearshore location for North America. But it is also known as Latin America port-of-entry, because it’s one of the top two largest economies in the region and it is Spanish-speaking, as the vast majority of the region. So, the same city will support both strategies, right? No.
The availability of bilingual tech talent in Mexico is not uniform across the country. Mexico is a large country and it has regions that have more concentration of certain industries and companies that target them. Some cities are larger and attract more competition as well, creating an increase in salaries and benefits, which creates a more competitive environment for newcomers.
Talent Pool Size
A good starting point when selecting a location is the size of the available talent pool. Just by size, Mexico has several cities that are larger than the total population of other Latin American countries, like Panama and Costa Rica.
For bilingual talent, two factors came into play: The larger the population the higher the probability of finding bilingual talent and the proximity to the U.S. border.
| Rank | Metropolitan area | State | 2020 Census |
| 1 | Ciudad de México | Mexico City | +22 Million |
| 2 | Monterrey | Nuevo Leon | +5.3 Million |
| 3 | Guadalajara | Jalisco | +5.2 Million |
| 4 | Puebla | Puebla | +3 Milion |
| 5 | Toluca | Estado de Mexico | +2.3 Million |
| 6 | Tijuana | Baja California | +2.1 Million |
| 7 | León | Guanajuato | +1.8 Million |
| 8 | Querétaro | Querétaro | +1.5 Million |
| 9 | Ciudad Juárez | Chihuahua | +1.5 Million |
| 10 | Torreón | Coahuila | +1.5 Million |
with the United States, it’s important to note that Mexico is the sole country that These two factors also came into play as to how attractive the city is for foreign nationals who are relocating to Mexico. The larger the city and closer to the border, it will have more international amenities that will make an easier transition for them and their family.
While numerous countries in the Nearshore region may highlight their cultural connections shares a direct border with the U.S. Consequently, this proximity has resulted in a significantly stronger cultural influence over the years.
For example, residents of Tijuana are deeply intertwined with the United States. They frequently visit and often have family members living across the border. As a result, this cultural interaction has a lasting impact on them, shaping their language skills, knowledge of American pop culture, use of slang, and various other aspects of their lives.
In cities in border states, like Hermosillo or Monterrey, there is still a considerable cultural affinity with the United States, stemming from sources such as television, cultural icons, musicians, and sports teams.
This pattern of stronger cultural ties in the northern areas compared to the southern regions also extends to areas such as culinary preferences, vacation choices, and everyday conversations.
Industries
Selecting the right city, after location size, is the type of industry the company works in. For example, Guadalajara is known for its diversity and a pool of skilled graduates and experienced professionals excelling in software development. And with its large talent pool, should be the ideal location, right? Well, it depends.
If your company is a Systems Integrator that implements ERPs, Mexico City and Monterrey have a much larger talent pool than Guadalajara. Mexico City because of its size and Monterrey because is Mexico’s Industrial Hub, currently attracting most of the nearshoring foreign investment because its booming manufacturing industry. Just in 2023, Tesla, GM, and Kia Motors announced opening their Electric Vehicles production in that region. Which also bolsters the available talent for Industry 4.0.
But if you are a company that is looking to enter the Latina America Market and has an Enterprise Application built for Pharma Companies, then Guadalajara is a good option as well, as Mexico City and Monterrey. Foreign companies should research not just which competitors are already located in the city, but which industries are dominant as well.
Is Mexico City the right choice then? Not necessarily. Aside from the intense competition for talent in the city, if the foreign company insists on having their team work onsite at the office, they will face an exceedingly challenging task of convincing top talent to return to the office due to the city’s widely known traffic congestion. In contrast, in other cities, talent is more amenable to returning to the office, but this is not the case in Mexico City.
Cost-conscious companies can explore smaller cities, some of which are home to highly educated technical talent that often remains untapped, like Hermosillo, which is near the border. While taxes and regulations are generally consistent throughout the country, state-specific factors like payroll taxes and real estate costs can vary.
Conclusion
The advantage of Mexico is that it has plenty of good cities for opening an office, but this is also a disadvantage for foreign companies, as there’s no one-size-fits-all all answer for the best location.
Companies must engage in thorough research and scenario planning in collaboration with a local firm before settling on a specific city. A common approach involves establishing a central office with satellite branches in other cities. This strategy hinges on having a local presence in multiple locations and choosing cities with robust international airports, which should also be subject to careful research. Furthermore, it’s essential to recognize that tech talent has various opportunities, so if your brand lacks recognition or local presence, it’s imperative to devise a strategy that demonstrates your commitment and local presence.
Countries that have a strategic location have a well-established track record of offering soft landing programs to foreign businesses. Leveraging these programs is essential to sidestep prolonged learning curves and avoid unnecessary expenses.
