The trend of establishing Global In-House Capability Centers (GICCs) closer to home is accelerating, with Mexico solidifying its position as the top choice for the Americas. According to global research firms including Everest Group, ISG, and others, these strategic hubs — specializing in areas like IT, finance, and R&D — are attracting companies seeking improved efficiency and control. Gartner selected Mexico as the best nearshore location for North America as far back as 2017. So what new factors are contributing to the current boom?
Navigating Uncertainty
During the pandemic, companies were pressured to be more cost-efficient and do more with less — so they tested new regions, technologies, and workforce setups, building more resilient organizations in the process. One outcome was that geographical operative hubs minimized the risk of centralization and allowed companies to benefit from more than one talent pool. Setting up engineering teams in Mexico, compared to the US, provides over 60% in cost savings.
Location, Location, Location
Mexico shares almost 2,000 miles of land border with the US, so travel times from Mexico are comparable to those between US cities. Today, there is a nearshoring phenomenon driven by the revamped USMCA Trade Agreement and the US-China trade tensions. For this reason, Mexico has become the top trading partner of the US — and recently, for the first time in 20 years, the US buys more from Mexico than from China.
Analysts recommend, in different order, India, China, Mexico, the Philippines, and Poland as the best places to build world-class GCCs. But when the question is where to build the best nearshore center for North America, the consensus #1 answer is Mexico.
SMEs Have Joined the Trend
The cost and risk of opening foreign operations is substantially lower than it used to be. Strategically located countries now have attractive soft-landing options that foreign companies can benefit from — so there’s no longer a need to hire a top-4 consulting firm or commit early to a large headcount with a BOT contract.
Mexico has options by industry: the Shelter model for manufacturing, and the Subsidiary-as-a-Service for tech companies. This model enables companies to substantially lower the cost of the foreign operation by using the vendor’s economies of scale and minimizing risk exposure — while still owning the operation. It’s proven especially well-suited for PE-backed portfolio companies.
Forbes noted that “if a company wanted to operate its own offshore captive 15–20 years ago, it required 1,000–2,000 people. The economics are now down at 30–40 people.” While large corporations often struggle with bureaucratic inertia, SMEs thrive on agility and adaptability — running multi-function regional offices of 20 to 60 people, with the option to scale. ISG calls these Micro Capability Centers: “critical elements of innovation: agility, scalability, cost-efficiency and versatility.”
Talent Size and Quality
Mexico has the best of two worlds when it comes to talent: world-class academic institutions and the size of its population. A delivery center needs talent, not industrial machinery — so the size of the candidate pool matters greatly. Finding specialized candidates from a pool of 130 million people is a fundamentally different exercise than selecting from a country with 10 million.
Mexico houses over 1,250 higher education institutions that produce 110,000 STEM graduates a year, including renowned institutions like Tecnológico de Monterrey, Universidad Nacional Autónoma de México, and the University of Guadalajara. Out of the 400 top universities in the LATAM region, Mexico claims 63 of them.
This is why tech companies like Ascendion are opening 1,500-person centers in Monterrey just for AI Engineering. The influx of foreign companies continues to develop top local talent — Mexico currently has approximately 332 active AI companies, 55% of which were founded in the last five years.
In Conclusion
Today, companies are adding core and critical capabilities in their cost-efficient regional centers — capabilities that cannot be outsourced without risking company knowledge walking out the door. Large corporations have taken cues from SMEs and are using soft-landing strategies to significantly reduce local expenses and risks. Labeling these simply as “Global Capability Centers” understates their multifaceted functions: Global IT Services, Sales Offices, regional PMOs, and more.
Yes, Mexico continues to be the best option in the region for North America — but it doesn’t mean it should replace India. Each country offers distinct advantages; the right combination depends on your specific needs and the goal of creating a decentralized supply chain. Close to 60% of Everscale customers have offshore centers in India, but Mexico adds talent for customer-facing roles in North America — and the same team can support the entire Latin American continent. These foreign multi-function centers are scalable, cost-efficient, and versatile. SMEs that are always looking to do more with less may be leading this trend, but they won’t be alone for long.