I remember an article published in a Mexican newspaper at the beginning of the year 2000, which proposed Guadalajara as the new Silicon Valley from Mexico. Indeed, since the mid 90s, technology manufacturing had been concentrated in the nearby area, which of course generated a significant economic impact in the city and state. Companies such as Motorola, Hewlett Packard, Nokia and others, now being more focused on the design phase, outsourced their manufacturing to Mexico.
I thought at that time that although the note was well intentioned, the comparison did not make sense, since Silicon Valley had been formed by pursuing leadership in the innovation and development of added value, while in Guadalajara manufacturing continued to be promoted, exploiting cheap labor, generating low value jobs.
At that time I started my second venture, Simiteland I decided to read a little about how this special place in the United States was created and if it was possible to recreate it in Mexico.
It turns out that in the 40s and 50s in California, Frederick Terman, Academic Director and Dean of the Stanford School of Engineering, began fostering an entrepreneurial culture, motivating his students and alumni to create new companies and innovate based on their studies. Among them, he supported William Hewlett and David Packard to form one of the first private technology firms, a model that he repeated with Varian Associates and other technology companies created by Stanford graduates, thus initiating an environment of collaboration between academia and industry that revolutionized the technological development and encouraged a boom period for innovation.
One of these companies, Shockley Transistor Laboratory (later Shockley Semiconductors) is credited with generating the Silicon Valley “boom.” The company was founded by a Terman student, William Shockley, Nobel Laureate in Physics and co inventor of the transistor, in 1956. In 1957, in a dispute between Shockley and his employees, many of them resigned and formed Fairchild Semiconductor, a company that It grew enormously until the mid 60s and from which the first spin offs of technology companies around the Stanford campus emerged, which in turn generated even more spin offs, starting a cycle that continues to this day. Success had been democratized, having talent addressing a real need in the market was all that was necessary to generate wealth and praise. And the market flourished. Silicon Valley had been created.
It did not take long for the money from the northeastern United States to realize the great generation of opportunities that was occurring in the region and they began to generate, locally, risk investment funds (Venture Capital) that in turn further encouraged investment. creation of new companies. The government at the local, state and national level added to this, generating incentives and alternative financing programs to strengthen the nascent entrepreneurial ecosystem.
It is precisely this stage that he details in his book “The Startup Game”, Bill Draper, undoubtedly one of the godfathers of the Venture Capital in United States. In it, Draper brilliantly describes the atmosphere of the late 60s and early 70s in Silicon Valley. He started a “fever” similar to that of a century and a quarter ago, in 1849, in the same territory: the gold rush. Only now it was talent, and not metal, that was sought. Money began to flow and a new industry was created with companies worth more than entire nations, a new stock market that today represents the largest volume of any stock market in the world, generating million dollar jobs for an entire region (from 1970 to today). , the state of California has been positioned as one of the 10 largest economies in the world).
Why is this relevant? Because making a comparison, Mexico is beginning to go through a similar moment. Having, apparently, safeguarded ourselves from a crisis that strongly affects the United States and Europe, Mexico is positioned among the first 10 economies with a hope for accelerated growth in the following years. In the midst of an employment crisis that has little by little translated into entrepreneurial activity, and with unprecedented support for the creation of an entrepreneurial ecosystem in which academia, government and industry collaborate strongly to promote innovation. A country where talent and opportunities abound, neighbor to the largest market in the world, and with government initiatives aimed at facilitating and providing greater possibilities of success to companies. new companies.
Let’s analyze just some of the government initiatives and their results in terms of technological development: in 2006, the government, through the Securities Market Law, created the SAPI (Sociedad Anónima Promotora de Inversión), which grants minority rights and is a more flexible vehicle with greater possibilities of going public, so encourages investment. This is not a minor change, and it has already begun to show definitive signs of a search for economic growth. In 2010 and 2011, many changes took place in economic matters: the procedures for opening companies were streamlined, the government support budget for technological development and innovation was doubled, and National Financial Institution (NAFIN) even created a fund of funds for investment investments. risk, which began an expansion of investment funds Venture Capital in Mexico.
In academic matters, thanks to the incubator program of the Ministry of Economy and the support for innovation from the National Council of Science and Technology (CONACYT), there are more than 500 incubators in universities in the country. Today there are dozens of business accelerators, where programs such as Techba stand out, promoted by the United States Mexico Foundation for Science (FUMEC) or Wayraprivate accelerator Telefónica Group that promotes projects related to information technologies (IT). In addition, innovation awards abound in Mexico, offered by large corporations such as American Express, Banorte, Santander, Intel, Dell and many others that have promoted applied research in academia, and the generation of technological projects that have already created today. countless companies.
Finally, according to Gartner, Mexico has positioned itself as the fourth optionafter India, China and the Philippines, as a global provider of IT services and, according to AT Karney, it is the sixth destination worldwide and the first in America to establish IT services companies, advancing enormous strides since the last decade, a time when we did not even appear as an option within the innovation map and development in information technologies
All this, coupled with a drop in the number of opportunities in the now depressed economies of the first world, has forced investment funds to look at us, making the growth of money flow not only internal, but also attracted from United States, Canada and some European countries. Mexico is today, after Brazil, the best option to invest in Latin America, or the best, if we consider the conclusions of the last G20 summit in Baja California, a few months ago.
Of course there is still much to do. For example, in Mexico there are very few options to raise money in the early stages of a new company. The interest in credit financing is still prohibitive and elitist, there are very few options to obtain angel or seed capital and the lack of going public, as well as the little activity of mergers and acquisitions, still inhibits investments in industries other than real estate or other tangible assets. This without taking into account, of course, the possible break in political and economic continuity in the post electoral year, a society that has yet to adopt entrepreneurship as something necessary and positive, a climate of insecurity that not only affects the flow of investment but also makes to think, even for the most nationalists, whether it is worth undertaking locally and a perception of corruption that affects the image of regulatory institutions and therefore the quality of Mexican products and services.
Even so, this is the first time, that I remember, in which a joint effort on the part of society, the academic world, industry and government in terms of business creation has really been perceived. It seems that the conditions are in place for accelerated growth in the technology sector In Mexico, growth that generates greater wealth, that distributes money better to society and that helps Mexico rise on the scale of global competitiveness.
Assuming that the political and economic leaders in the next six year term trust that continuing along this path is good for Mexico, and stay the course, we could be at the threshold of the change from a dependent and uninnovative economy to a developed, competitive and generating economy. of high value jobs for its population.
To conclude, I don’t think we can replicate Silicon Valley, I think geographically, politically and economically they have a lot of advantage over us, but I don’t think it’s necessary. We can create our own in Mexico innovation model, taking advantage, in addition to the current situation, of the Mexican idiosyncrasy. We are a happy, hard working people with an unbeatable creative capacity, characteristics that we maintain regardless of the adversities that have historically been presented to us. All we have to do is imagine what we could achieve with a little wind in our sails.
This is what those of us who make up the group are working for. entrepreneurial ecosystem Mexican. My bet is that we will achieve it in this decade. Which is yours?