In today’s global economy, nearshoring has become a vital strategy for companies seeking competitive advantages. Regarding nearshore technology services, Mexico appears as one of the choices for Canada and the US.
Canada’s diverse Information and Communications Technology (ICT) sector is experiencing unprecedented growth. As revealed by recent studies, 30% of small and medium-sized businesses in Canada plan to invest in software within 2023. Furthermore, the tech sector is projected to grow by an impressive 22.4% during 2021-2024, and by 2026, Canadian ICT sector spending will reach C$142.6 billion.
The Information and Communications Technology Council (ICTC) estimated that by 2025, Canada will require an additional 250,000 highly skilled professionals to work in IT. However, based on the last five years of data from Stats Canada, the country only graduates around 20,000 IT and Computer Science professionals yearly, not nearly enough to keep up with demand. One of Canada’s strategies to respond to this discrepancy in demand and supply is to create an accessible immigration pathway for digital nomads, particularly software engineers, data scientists, technology product managers, and other key professionals. The future of Canada’s tech industry will rely on innovative immigration strategies like this one.
Even with the talent gap, the technology industry in Canada remains strong. It continues to flourish, and the country is regarded as a global leader in technology and one of the best places in the world to pursue an IT career. There are abundant opportunities for various IT roles, and IT professionals are well-compensated in Canada. Here are some facts about two essential cities in the tech industry:
- Montreal is home to nearly 180,000 professionals focusing on AI and MedTech and attracts significant AI investments, with over $2 billion announced since 2016.
- Vancouver is hailed as the new tech hub with world-class talent and industry know-how in digital media, VR, and AR. British Columbia has over 10,000 tech-centric companies and 100,000+ employees in the province.
In addition to seeking immigration solutions, the gap between available local talent and opportunities has Canada looking to other countries for outsourcing, primarily Mexico. When considering potential investments, Mexico stands out as a country for several reasons:
- Potential and Talent: With a population of 132 million, there are millions of conceivable candidates to hire, assuming talent is evenly distributed worldwide. In 2009, there were 60,000 engineering graduates every year. Now there are close to 150,000 – compared to 80,000 in the US.
- Education: Mexico boasts a vibrant and dynamic educational system, including renowned universities that produce skilled IT professionals. These institutions provide a steady talent pipeline, ensuring a constant supply of qualified individuals for various technology roles.
- Immigration Policies: Mexico’s flexible immigration policy further enhances its appeal as an investment destination for Canadian companies. With streamlined processes and favorable regulations, companies can easily access the talent pool in Mexico and establish a strong presence in the country. At Wizeline, we have people from 33 different countries working in Mexico.
- Proximity and Partnership: The strategic proximity between Canada and Mexico contributes to the strong commercial relationship among these countries. As trade partners, both can gain from this privileged commercial alliance. The Agreement between the United States of America, Mexico, and Canada (USMCA) has facilitated trade and investment opportunities, allowing seamless collaboration between the three nations.
Specifically, the trade relationship between Canada and Mexico has experienced consistent growth, with substantial bilateral trade figures in 2020. The bilateral trade between the two countries amounted to approximately USD 34.7 billion. Canada exported vehicles, machinery, mineral fuels, and plastics to Mexico while importing vehicles, electrical machinery, agricultural products, and medical instruments. On the other hand, Mexico exported vehicles, electrical machinery, mineral fuels, and machinery to Canada while importing mineral fuels, machinery, electrical machinery, and plastics.
The IT industry in Canada has extensive trade engagements with countries, including Mexico. IT industries have opportunities if they invest in Mexico’s dynamic market with thriving startup and venture-capital ecosystems. Canadian Technology Accelerator (CTA) started in Mexico City in 2019 and connects Canadian companies to the tech hub and leverages Mexico’s proximity for Canadian ICT exports. With projected steady growth in Canada’s ICT market until 2025, investing in Mexico allows expansion and capitalizing on emerging trends like cybersecurity, cloud services, and AI. Canada’s commitment to supporting AI research positions it as a valuable partner for Mexico’s AI initiatives. By investing in Mexico’s IT industry, Canadian companies can foster innovation, establish strategic partnerships, and seize opportunities in Mexico’s tech landscape.
In conclusion, Mexico offers Canadian executives an exceptional investment opportunity by leveraging nearshore technology services. With its large population, abundant talent pool, flexible immigration policies, and strategic commercial relationship with Canada, Mexico is the perfect destination for investment. By exploring further collaboration, outsourcing nearshore services, and building strategic partnerships to accelerate talent attraction in specialized areas, Canadian businesses can tap into Mexico’s potential and unlock numerous benefits for their growth and success.