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While the past two years greatly disrupted Mexico’s economy and business sectors, 2022 has been a year for innovation and competitiveness. The country, however, is undergoing a complex period as its slow economic recovery has been hindered by global challenges and price pressures. Despite the local and global hurdles, Mexico keeps moving forward and becoming a more attractive investment destination thanks to its embrace of blooming trends like fintech, sustainability, technology and logistics. The world is increasingly looking toward Mexico thanks to its ideal location, highly-qualified talent, stable political environment and numerous free trade agreements. These strengths have made Mexico the ninth largest recipient of foreign direct investment and are continuously generating numerous opportunities for investors. In recent years, Mexican companies and individuals have embraced the new tools brought about by the technological revolution, including 5G, fintech, backend-as-a-service and cryptocurrencies, among many others. Amid these turbulent times, the Mexican market keeps expanding and investing in sustainability and client centricity. However, the uncertain climate caused by the rise of interest rates, supply chain blockages, COVID-19 lockdowns and the Russia-Ukraine war calls for guidance during the turbulent times ahead. On May 11-12, 2022, experts from both the public and private sectors discussed the current state of Mexico’s business sector, evaluating the country’s economic outlook, fintech and e-commerce boom, sustainability trends and the transformation of logistics and manufacturing.
4
C on f e r e nc e I mpact
193
Breakdown by job title
companies
485
conference participants
32% CEO/ Director General 19% Manager 28% VP / Director 5% Business Developer 16% Founder/Partner/ President
52
speakers
07
sponsors
4,406 visitors to the conference website
Conference social media impact
Pre-conference social media impact
9,498 direct impressions during MBF 3.12% click through rate during MBF 6.34% conference engagement rate
15,691 direct pre-conference LinkedIn impressions 3.19% pre-conference click through rate 8.64% pre-conference engagement rate
Mexico’s leading B2B conference organizer introduces the world’s leading event networking platform. Delivering intent-based matchmaking powered by Artificial Intelligence that connects the right people. Network, no matter where you are.
251
Matchmaking intentions
participants
1969
matchmaking communications
89
1:1 meetings conducted
1,082 Trading Total
2,180
523 Networking 402 Investment 177 Recruitment
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C ompan y Att e ndanc e •
A3Sec
•
Doctoralia México
•
Acclaim Energy
•
Dux Capital
•
ADJUST (Mobile Measurement Partner)
•
EasyLex
•
Aidicare
•
EASYSEC
•
alkemy
•
ECN Automation
•
ALLVP
•
Embajada de Bélgica/AWEX Mexico
•
Altus Global Network
•
Embajada de Israel
•
AMBE Engineering LCC
•
Energy Industries Council (EIC)
•
Angel Ventures
•
ENGIE México
•
ANNIT
•
ENSO Fintech
•
aosenuma
•
Enterprise Singapore
•
Aquaculture Advisory
•
Envision Energy
•
Arcus
•
Eolis
•
ARIDRA
•
EPICA
•
Arista Technologies
•
EQUINIX
•
Arkangeles.com
•
ERM
•
Artha Capital
•
Exterran
•
ATFIL
•
Fermaca
•
Attraverssiamo
•
Fintual
•
AVANTARE CONSULTORES
•
Firm Forward, LLC
•
AWS
•
GBM
•
Baker Mckenzie
•
GC Móvil
•
Banco Azteca
•
GE Infrastructure Queretaro
•
Bankuish
•
Getin
•
Bayonet
•
Global Health Intelligence
•
Beetrack
•
Great Place to Work
•
Brella Ltd
•
Gruminex
•
Briq.mx
•
Grupo Apollo
•
Buenbit
•
Grupo Coppel
•
Business Finland
•
Grupo Médico Rossano
•
Cámara Nórdica de Comercio en México A.C.
•
Grupo SÍ Comunicación
•
Campa & Mendoza S.C.
•
GRUPO SURMAN
•
CANDO
•
Gus Chat
•
CANIFARMA
•
Hewlett Packard Enterprise
•
CAPWATT MEXICO
•
Hogan Lovells
•
Carbon Trust
•
HOMELY
•
Cargamos
•
Homie
•
casAgua
•
Hoocax
•
Castor
•
IA group
•
City Council
•
ICAN
•
Clara
•
ICM
•
Climate Bonds Initiative
•
icon Group
•
CLINICA RESPONSABLE OPERATIVA, S.C.
•
IDCA
•
Clivi
•
IPADE
•
CM Comunicación
•
IQSEC, S.A. DE C.V.
•
Collective Academy
•
JOKR
•
Corev De Mexico SA De CV
•
Kannbal Consulting
•
CR LEGAL PARTNERS
•
KEB Hana Mexico
•
Credimotion
•
Koomkin
•
Crema
•
Krino
•
cumplo
•
Lealtad Verde
•
DIRECCION COMERCIAL
•
Lenovo Infrastructure Solutions Group
6
C ompan y Att e ndanc e •
LIP Ventures Boutique
•
Ritmo
•
L’ORÉAL
•
Rivers Systems
•
Maquia Capital
•
Riverside Resources Inc
•
Marcos y Asociados
•
Robit
•
McKinsey & Company
•
Rokk3r
•
MEDICE Arzneimittel
•
ROMO DE VIVAR V. IP SERVICES
•
Medikit
•
S*ARC
•
MeetingDoctors
•
SafeLink
•
Mexico Business
•
Salud Facil
•
MexicoView
•
Sánchez Devanny
•
Miranda Partners
•
Santamarina y Steta
•
Momlancers
•
SIETE ENERGY
•
Monific
•
Signifyd
•
Morada Uno
•
SkyAlert
•
Morgana
•
Solfium
•
Mozper
•
Someone Somewhere
•
Multiled
•
Startup Juices
•
Mundi
•
STP
•
Mureni
•
Stragia
•
NATURGY México
•
Stripe
•
NautechMX
•
SUMe, Sustentabilidad para Mexico
•
NAVIERA INTEGRAL
•
SUR / INSTITUTO DEL SUR URBANO
•
Navistar Mexico
•
syngenta
•
Nepanoa
•
Tala
•
NextStage
•
Tecnatom
•
NUBIX
•
Tekne
•
nutriADN
•
TRANSPLACE
•
Nuvocargo
•
Tribal Credit
•
Palenca
•
TuoTempo
•
Perfekto
•
UNIÓN DE CRÉDITO DEL SOCONUSCO
•
Pfizer México
•
UPS
•
PharmAdvice
•
Uxbilink
•
PR4YOU
•
vector casa de bolsa
•
Pragmatec
•
Vera & Asociados
•
Pretmex ( Busines online lending) - Lendera
•
Vetta | Corporate Startup Generator
Crowdleasing- ASOFOM-AFICO
•
Vexi. Tarjeta de Crédito
•
Prodynamics
•
Vinco
•
Public Power Utility
•
Von Wobeser y Sierra
•
PwC
•
VTEX
•
QbD
•
WhereIsMyTransport
•
Quartux Mexico
•
Willscot
•
RAMA MANTENIMIENTO INDUSTRIAL TOTAL
•
Workday
•
RER Energy Group
•
World Trade & Investment Group LTD
•
Revolut de México
•
WorldWise Coaching LLC
•
Ripio
•
X-ELIO
7
P rogram D ay 1
09:00
WHO DRIVES ECONOMIC GROWTH: THE ROLES OF STARTUPS, CORPORATIONS AND GOVERNMENTS
Moderator: Philipp Haugwitz, McKinsey & Company Panelists: Carlos Funes, Softtek Gerry Giacomán, Clara Kenneth Campbell, L’Oréal México Brenda Gisela Hernández, COFECE Santiago Cardona, Intel México 10:00
GETTING YOUR BUSINESS METAVERSE READY
Speaker: Marco Casarín, Meta 10:15
BEYOND SUSTAINABILITY: BUSINESS OPPORTUNITIES THAT HAVE A NET-POSITIVE IMPACT ON THE PLANET
Moderator: Adrián Sánchez, Lealtad Verde Panelists: Claudia De la Vega, Walmart Alicia Silva, SUMe 11:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:00
THE MEXICAN RIGHT TO PLAY
Speaker: Martin Toscano, Evonik Industries México 12:15
THE FUTURE OF “MADE IN MEXICO” MANUFACTURING
Moderator: Miguel Ángel Alcaráz, McKinsey & Company Panelists: Francisco Rios, Enterprise Singapore Alfredo Nolasco-Meza, SPYRAL Martin Toscano, Evonik Industries México 13:15
MANUFACTURING IN MEXICO: TURNING LOGISTICS IN A COMPETITIVE EDGE
Moderator: Carlos Ornelas, McKinsey & Company Panelists: Deepak Chhugani, Nuvocargo Óscar Del Cueto, Kansas City Southern México Wilfredo Ramos, UPS 14:00
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00
PERSPECTIVES ON MEXICO’S ECONOMIC OUTLOOK
Moderator: Carlos Fiorillo, Fitch Ratings Panelists: Alejandro Padilla, Grupo Financiero Banorte Adrián De la Garza, Citibanamex Jessica Roldán Peña, Casa de Bolsa Finamex Rodrigo Mariscal, Secretaría de Hacienda y Crédito Público 16:00
MEXICO CITY: OPPORTUNITIES FOR ACCELERATION OF MEXICO’S GROWTH ENGINE
Speaker: Fadlala Akabani, Mexico City Ministry of Economic Development 17:00
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
8
P R O G R A M D AY 2
09:00
GEN Z: GETTING TO KNOW THE LARGEST AND MOST DIVERSE GENERATION IN HISTORY
Speaker: Julian Coulter, Google 09:30
THE TECHNOLOGIES DRIVING THE INNOVATION REVOLUTION: CLOUD, DATA & 5G
Moderator: Alfredo Gutiérrez, Workday Panelists: Rodrigo Martineli, Rackspace Technology Chafic Nassif, Ericsson Julio Velázquez, Google Cloud México 10:15
DATA CENTERS, INFRASTRUCTURE AND SUSTAINABILITY
Moderator: Alejandro Salas, Mexico Business News Panelists: Josué Ramírez, IDCA Juan Carlos Casillas, Stulz México Amet Novillo, Equinix 11:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:00
CHALLENGES OF A POST-PANDEMIC BUSINESS
Speaker: Alejandro Colín, VTEX 12:30
WHY UX AND PAYMENT EXPERIENCE REALLY MATTERS FOR E-COMMERCE
Moderator: Armando Velez Médici, OPPO Panelists: Pablo Estévez, GUS Erick McKinney, Adyen Christian León, Signifyd Bernardo Bazua, Coppel 13:15
HOW TO STAND OUT IN A FINTECH BOOM
Moderator: David Lask, Tala Panelists: Loreto Zumalacarregui, Bnext México Andrea Picardi, Tribal Ricardo Godínez, Enso FIntech Mariana Franza, Ualá 14:00
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00
THE PARADIGM SHIFT IN THE B2B FINANCIAL SERVICES MARKET
Moderator: Iñigo Rumayor Belausteguigoitia, Arcus Panelists: Armando Herrera Reyna, Konfío Paulina Aguilar Vela, Mundi Guillermo Naranjo, Oracle 15:45
DISRUPTION IN THE INVESTMENT & VENTURE CAPITAL MARKET
Moderator: Hernán Fernández, Angel Ventures Panelists: Javier De la Madrid, GBM+ Luis Barrios, Arkangeles Anna Raptis, Amplifica Capital 16:30
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
9
C on f e r e nc e H ighlights INFLATION HIGHLIGHTS PRIORITIES FOR ECONOMIC DEVELOPMENT The pressure put on the Mexican economy
to successfully manage the economic
by international inflationary conditions
pressure of inflation,” she said.
must be handled by startups, corporations and regulators through a recentering of
Mexico’s private sector is being put under
Mexico’s most promising variables, such as
great pressure by inflation, said Santiago
its available talent, according to some of
Cardona, Mexico Country Manager, Intel.
the country’s top business leaders.
Under these circumstances, businesses either have to sell more or become more
Inflation will likely continue to be the most
efficient, if not both. Companies should
important aftershock of the pandemic, as
focus on becoming more efficient since
shortages and bottlenecks will still hamper
this process is more likely to be under their
the ability of markets to heal themselves
control, said Cardona. “To adapt in the
from the damage sustained throughout
business world, technology has to be part
the last two years, said Brenda Gisela
of the process and our companies have to
H e rn á n d ez , P re sid e nt C o m m is sio n e r,
implement digital tools to transform and
COFECE. The US and the EU disagree on
adapt to an inflationary environment,”
the type and degree of intervention that
said Cardona. Both the pandemic and the
governments should make on economic
inflationary processes that it triggered
competition to bring down prices. The
are significant as accelerators of Mexico’s
Mexican government is attempting to find
digitalization, he added.
a middle road. “The federal government has implemented measures to reduce
Technological adoption, however, cannot
the impact of inflation. The commission
be separated from the matter of talent,
considers it a priority to follow these
according to Carlos Funes, Mexico CEO,
recommendations, focus on eliminating
Sof ttek . B usinesses’ adoption of new
obstacles and support small business and
technologies will only be as good as
consumers,” said Hernández.
th e te ch skill trainin g p roto cols th at companies had in place to take advantage
Companies are caught in the middle of this
of those technologies. For companies it is
process, said Hernández, and must wrestle
essential to invest in both the acquisition
with a difficult choice between passing
a n d d eve l o p m e n t of t a l e n t , h e s a i d .
on price increases to the consumer and
As these investments increase, talent
risking losing market share, or absorbing
retention and incentives for employees
the shock of these price increases and
also become increasingly relevant and
lowering their profit margins . “ This is
competitive for business leaders. These
an at ypical situation that ser ves as a
investments need to grow until they have
kind of test or filter; companies that can
macroeconomic impacts on inflation itself,
successfully do more with less will be able
said Funes: “One of the main factors that can impact inflation is investment, which
“Inflation will likely continue to be the most
has to be constant in different markets.”
important aftershock of the pandemic, as
Technology and talent are the two pillars
shortages and bottlenecks
that will define the ability of Mexican
will still hamper the ability
business leaders to manage this current
of markets to heal themselves from the
crisis, said Philipp Haugwitz, Associate
damage sustained throughout the last
Partner, McKinsey & Company.
two years”
Brenda Gisela Hernández President Commissioner | COFECE
If talent acquisition is essential, then Mexico’s position as a source of abundant talent makes it an ideal country to
10
C on f e r e nc e H ighlights overcome the obstacles of inflation, said
such high inflation levels becomes obvious
Kenneth Campbell, Mexico President and
when compared to Mexico’s.
CEO, L’Oréal. This, in addition to other elements, made Mexico an investment
This inflationary environment puts startups
wqwwand potential: “Mexico has a unique
in an interesting position. Mexico’s startup
geopolitical position and the door to the
ecosystem was still at an early, if promising,
biggest consumer market in the world,
stage, especially when compared to the
while also catering to a local market with
US, where the top five companies in the
high potential,” said Campbell. He also
stock market are now all former startups,
cautioned against alarmism, highlighting
said Gerry Giacomán, Co-Founder and
the fact that Mexico’s macroeconomic
CEO, Clara. “As a result of low investment
variables continue to be stable and
in star tups in Mexico and the region ,
favorable when compared with other
development has been slow, which also
countries, especially since the pandemic’s
does not help to boost an innovative
nearshoring boom made the US turn to
environment.” Through venture capital
Mexico when it would have previously
funding, startups can help other companies
turned to its partners in Asian economies.
do more with less by taking a long-term
Campbell also noted the adaptability of
approach to their business strategy and look
Mexico’s economy by virtue of its past: as
beyond quarterly results to predict demand
Germany and the US inch closer to double
and help the market react to the volatility
digit inflation rates, their inexperience with
of an inflationary environment, he added.
PREPARING BUSINESSES FOR THE METAVERSE Innovation is a constant and the world is
teleworking and enriching the vir tual
continuously transforming amid technological
experience. It also aims to provide services
upheavals. Companies leading the way
that will amuse and teach individuals through
forward must undergo testing, learning
immersive experiences. The metaverse could
and failing before finally succeeding. The
also transform the digital selling experience
challenge is making this cycle agile, fast and
by changing how value chains are generated.
as inexpensive as possible. Meta has taken
This technology could promote interaction
this responsibility seriously and aims to give
and reduce digital literacy gaps to enable
businesses the power to build as it brings the
everyone to be part of the digital economy.
world closer together, said Marco Casarin, Country Manager México, Meta.
While the metaverse offers numerous p ro j e c te d b e n e fi t s , b u s i n e s s e s m u s t
“The Metaverse will allow us to connect
be prepared to fully capitalize on this
differently, in a virtual space, increasing the
u p c o m i n g te c h n o l o g y. M u l ti n a ti o n a l
quality of interaction,” said Casarin. The
technology company Meta is offering
upcoming metaverse is an ecosystem that will
several tools to increase profitability,
generate value chains and create moments
explained Casarin. These include a video
that will positively change the world, he
strategy to suppor t marketing plans ,
added. It will allow users to move fluidly in
which has benefited SMEs in particular.
virtual and augmented reality, taking the
About 54 percent of consumers want to
experience of social interaction to another
see branded video content. In Mexico, 40
level and adding value to people and their
percent of audiences rely on video over
communities. Meta is working to support the
any other media tool and Mexico is one of
co-creation of interoperability that allows
the seven countries that create more video
users to create intellectual property.
content. However, Mexico is still lagging in digital media and marketing investment.
The metaverse aims to influence lives in
For that reason , C asarin urged CFOs ,
many ways, for example by transforming
CEOs and other business leaders to start
11
C on f e r e nc e H ighlights establishing digital and modern marketing
of brands and allows businesses to easily
strategies, which would allow companies
integrate catalogs.
to be resilient, flexible and adaptable. Video platforms generate community and
Marketing Mix Models (MMM) can also help
Meta offers the largest video platform that
industries to boost the cycle of innovation,
can help any brand to generate videos,
learning and failure, said Casarin. With the
said Casarin.
outbreak of COVID-19 businesses had to adapt to industry changes and explore scalable solutions to gain competitive
“The Metaverse will allow us to connect
advantages by understanding the true
differently, in a virtual space, increasing
va l u e of th e i r m a r keti n g c a m p a ig n s ’
the quality of interaction”
impact on business outcomes. There is a
Marco Casarin Country Manager México | Meta
large amount of data available but more than 50 percent of it is not analyzed and, consequently, it is useless. If data is not correctly analyzed, companies can lose up to 64 percent of the cost per conversion
Conversational business is also a key
improvement.
communication tool in Mexico as nine in every 10 citizens use WhatsApp. Customers
Businesses cannot wait until the metaverse
expect businesses to communicate with
fully evolves to start experimenting and
them through instant messaging channels.
investing in it, they must adapt and be
Using this platform or similar ones to
prepared for the potential opportunities
connect with audiences expands the reach
that the metaverse will offer.
SUSTAINABILITY IS A NON-LINEAR PROCESS The private sector is being increasingly
Achieving this economic model will be
pressured by investors and consumers alike
possible by revaluating business practices,
to ramp-up and accelerate sustainability
a capacity that was demonstrated amid
initiatives as a means of creating a green
the accelerated digital transformation.
circular economy. This c all to ac tion demands that companies reassess their
Similarly, it will require companies to place
entire business model and practices, a
sustainability at the center of business
transition process that should not be
development if they are to make substantive
expected to unfold without complications,
and sustained contributions to society and
according to industry experts.
the environment, said Claudia de la Vega, Director of Corporate Affairs Mexico and
“Businesses are starting to realize that
Central America, Walmart. As companies
the business as usual has an expiration
e m ba rk on this inte rse c tive process ,
date. Companies today more than
however, they should not expect it to be
e ve r u n d e r s t a n d t h a t s u s t a i n a b i l i t y
linear, warned de la Vega. “There will be
is a must have and that they have to
setbacks, but companies should not be
b e e nv i ro n m e n t a l l y c o n s c i o u s to b e
dissuaded from becoming a regenerative
part of the solution,” said Alicia Silva,
company to restore our planet for future
President, SUMe.
generations.”
Climate change has become an
Ultimately, business as usual is obsolete,
omnipresent challenge for governments,
said Silva. This is reflected in an upsurge
private industry and consumers, all of
in green investments, which grew by 36
which will play a critical role in forming
percent in 2020 according to the CCFV
a sustainable circular economy in Mexico.
in Mexico, as reported by MBN. After two
12
C on f e r e nc e H ighlights years overcoming challenges ranging
priority by companies, said Adrián Sánchez,
from public health and the accelerated
CEO, Lealtad Verde. Some businesses fear
digitalization of daily life, people and
changes to consumer behavior because
companies alike are poised to successfully
they might cause friction but companies
lay the groundwork towards Net Zero. For
have forgotten that consumers are also
companies, that starts with identifying
looking at their role in the road towards
how they contribute to the production of
sustainability, he added. Surveys outline
carbon emissions and waste locally and
that climate change is a major concern
through their entire supply chain.
for consumers but they do not know how or where to begin tackling this problem,
This information is central to the development
presenting a substantial opportunity for
of a sustainable roadmap that can be
leaders in this space.
achieved through incremental changes, an increasingly common prerequisite for
Fear of transition is real; people are really
raising capital and attracting investors. This
concerned that it will not be possible to undo
points to an institutional shift that demands
the environmental damage that has been
accountability and engagement throughout
done. Demand for sustainable products
the entire organization. With added-value
has increased but now there should be a
clearly established, companies stand to
focus in making these products accessible
benefit from the agency that can be provided
so low-income households can take part
by ESG professionals. These experts can
in the transition.Short-term, sustainable
help companies be pragmatic about the
decisions will not be as remunerative as this
development of strategic roadmaps and
is a long game. As a result, every single
more importantly, avoid potential setbacks.
business decision needs to be evaluated from a lens of sustainability, a process that
Complementary to these efforts, consumer
has been highlighted as doable during the
education should be considered a parallel
accelerated digital transformation.
BREAKING DOWN MEXICO’S ADVANTAGEOUS POSITION Several key factors paint Mexico’s economy
in t h e E U ,” s a i d To s c a n o . M ex i c o i s
in a positive light despite the crises that are
strengthened by its young population, with
defining a post-pandemic world, according
a national average age of 29 years old. The
to an in-depth analysis presented by Martin
population is also expected to be 84 percent
Toscano, Mexico President, Evonik Industries.
urban by 2030. Over 60 percent of Mexico’s workforce is concentrated in the services
The first one of these factors is Mexico’s
sector and its minimum wage is highly
demographic structure, which is “very
competitive at a global level, said Toscano.
different to competing population pyramids
These and other variables reveal the many
13
C on f e r e nc e H ighlights benefits that companies can expect to
which have remained stable and healthy
enjoy when betting on the reliability of
despite current political discourse, according
Mexican workers.
to Toscano. In fact, Mexico remains the world’s 9th overall largest recipient of FDI.
A younger population means a higher
While some risk factors endemic to Mexico
potential for training, education and talent
remain, they are not new and have failed to
development, which Toscano claimed applies
trigger a significant FDI decrease. As the
significantly to Mexico in its post-pandemic
commercial relationship between the US
phase. “In Mexico, demographic availability of
and China continues to be redesigned and
young talent is an important factor to further
redefined, Toscano says that Mexico will
develop the labor force, especially when
continue to benefit from the US’s desire to
considering how the pandemic developed
reduce its dependence on Chinese imports.
the dual education options available to
This is an example of the “China Plus One”
companies and employees.” Toscano also
strategy, through which companies avoid
noted that Mexico’s key per formance
investing only in China, he added. This
indicators (KPIs) were very positive, in
strategy has benefited other countries such
alignment with other aspects of his analysis.
as Vietnam. In this sense, Mexico remains at
According to Toscano’s breakdown, Mexican
the center of an active trade environment,
growth forecasts have returned to pre-
and the current nearshoring boom that the
pandemic levels in large part thanks to the
Latin American country is enjoying is likely to
success of its export industries and markets,
remain constant, leading to sustainable and
which enjoyed “solid and noble growth.”
reliable growth.
While Toscano did mention the issue of
Moreover, COVID-19’s overall impact on
inflation, he also made clear that its effect
Mexican markets was relatively “minimal”
on the international comparison was minimal
w h e n c o m p a r e d to o t h e r c o u n t r i e s ,
considering the fact that it was affecting
said Toscano. Mexico remained “almost
other “more developed economies” just as
completely open when compared to the
much, if not more. Inflation is also being
EU” throughout the pandemic. The growth
increasingly affected and exacerbated by
enabled by this measure allowed Mexico
the war in Ukraine, from which Mexico is
to gain a new position in global market
shielded, said Toscano.
rankings. For example, Mexico became the top four manufacturer of auto parts in the
Mexico also remains competitive thanks to
world, taking over a position previously
its foreign direct investment (FDI) levels,
held by Germany.
14
C on f e r e nc e H ighlights MEXICAN MANUFACTURE NEEDS UPDATES TO REMAIN COMPETITIVE The current context of uncertainty is
arise. The combined capabilities of the
changing manufacturing, which is being
industrial internet of things (IIoT), cloud
affected by customization demands from
computing, robotic process automation
consumers, geopolitical issues, inflation and
and artificial intelligence (AI), among other
technological changes, among other trends.
tools, have greatly improved manufacturing
Moreover, global trade perspectives show a
over the last few years. Manufacturers who
clear shift toward regionalization, according
embrace digital capabilities capture growth
to consulting firm McKinsey. Mexico stands
and protect long-term profitability.
to benefit from this transition but to do so the country needs to update its practices and
The companies that have put AI at the
capitalize on its free trade agreements (FTA).
core of their business have become market disruptors through the discovery of all-
“Mexico is now a global manufacturing
new business processes and commercial
player,” said Martín Toscano, President and
propositions that are often overlooked by
General Manager, Evonki. Currently, Mexico
the human eye. AI can help manufacturers
is the fourth auto parts producer in the world,
achieve the greatest degree of product
he added. While in 2021 Germany’s auto parts
quality within their processes . This
production amounted to US$87.22 billion,
technology can be used in manufacturing
Mexico closed the year with production
n e ural n et works , machin es a n d de e p
valued at US$94.78 billion, as reported by
learning, among others.
MBN. Digitalization and e-commerce have been essential to achieving this. E-commerce
However, there are still challenges to
has seen the same growth during the past two
ove rc o m e to f u l l y p o s i ti o n M ex i c o ’s
years as it experienced 20 years ago.
m a n u f a c t u r i n g i n d u s t r i e s . M c K i n s ey calls manufacturing companies that
“The manufacturing processes that we are
have successfully adopted technology
currently witnessing are completely different
“lighthouses” but “in Mexico only Henkel
from those of 20 years ago,” said Francisco
is considered to be a lighthouse and, with
Rios, Business Director, Enterprise Singapore.
the use of technology, it has achieved
Two decades ago, the manufacturing sector
tangible impacts in terms of productivity,
was one of the most important in the country
flexibility and sustainability,” said Miguel
and during the past six months, manufacturing
Ángel Alzaráz, Partner, McKinsey.
has regained some of the importance it had in the past, according to Ríos. This renewed
While the challenges are many, the sector
importance comes in part thanks to the shift
is well on its way to embrace digitalization.
from a “just in time” manufacturing process
“ I n M exico, we a re a c tive ly wo rkin g
to a “just in case” view, he added.
towards industry 4.0,” said Toscano. The manufacturing industry in Mexico knows
Production processes have been transformed
where to head and both the public and private
as advances in manufacturing technology
sectors are working together to achieve these goals. The road to industry 4.0 has obstacles
“The manufacturing processes that we are currently witnessing are completely different from those of 20 years ago”
Francisco Rios
Business Director | Enterprise Singapore
such as the need for digitalization, the lack of 5G infrastructure, limited awareness about cybersecurity and the need to identify relevant topics for education programs. However, numerous companies have made great strides in Industry 4.0 adoption. In Mexico, 54 percent of automotive companies
15
C on f e r e nc e H ighlights have active or in-development AI projects
The road toward Industry 4.0, however,
and one in every three companies uses
i s n ot s tra ig ht fo r wa rd . “ We f a ll i nto
IIoT to be more efficient and improve its
the trap of focusing only on assembly
capabilities, according to PwC. Meanwhile,
manufacturing and we are not developing
66 percent of Mexican companies have big
p ate nt s n o r n ew te c h n o l o g i e s ,” s a i d
data analytics projects.
Nolasco. To truly be successful, Mexico needs to be more than a manufacturing
To successfully transition to Industr y
hub; it needs to be an active developer
4.0, Mexico must start looking at similar
of technology and innovation, but this
markets, said Ríos. Developments achieved
can only be done through investment.
in Southeast Asia can be applied in Mexico
“ Th e establishm e nt of R& D ac tivities
since the region faces similar challenges.
requires resources to export ideas and
“Mexico can benefit from a partnership
concepts,” said Toscano. Mexico must
with companies from Singapore to
invest in training people in the STEM field
take advantage of their technological
as the human factor is the most important
developments,” said Rios.
element, according to Nolasco.
MEXICO’S MANUFACTURING POTENTIAL STIFLED BY CHALLENGES Mexico has the potential to become a global
The COVID-19 pandemic upended traditional
manufacturing hub but lacks important
supply chains across the world and exposed
c apabilities related to infrastruc ture,
various vulnerabilities and inefficiencies that
d i g i t a l i z a t i o n a n d d i ve r s i fi c a t i o n o f
are largely tied to a lack of digitalization. These
productive capacity. Bridging these gaps
challenges echoed through the manufacturing
will be fundamental if Mexico is to seize the
sector, which came to compound inflexible
nearshoring opportunity emerging from
operating practices, e-commerce’s sudden
the reconceptualization of global supply
exponential growth and rising commodity
chains, according to industry experts.
prices. Ultimately, this resulted in logistical congestion and bottlenecks that hurt entire
“ Relations between the US and China
industrial sectors and end-consumers
have deteriorated as they compete for
alike. Altogether, in the post-pandemic
global hegemony. This has manifested
reality, it has become observably clear that
vulnerabilities along their supply
geographically disaggregated supply chains
chains, which represents an important
are no longer viable. Instead, it is likely that
oppor tunity for Mexico,” said Deepak
economies will defer to geographic units
Chhugani, Founder and CEO, Nuvocargo.
for the production and transportation of
16
C on f e r e nc e H ighlights goods, representing a significant nearshoring
and logistics innovation to digitize data from
opportunity for Mexico, said Óscar del Cueto,
Mexico’s logistics hubs, making the country’s
President, General Manager and Executive
supply chains more competitive. Ultimately,
Representative, Kansas City Southern México.
an important aspect of this transformation involves streamlining processes at the
Before Mexico can begin to capitalize on this
border, which will require public and private
investment, it will first need to prioritize the
investment, said del Cueto.
development of domestic competencies, starting with infrastructure. Mexico needs to
Another element of this strategic development
prioritize strengthening the connectivity and
involves the diversification of Mexico’s
security of its internal infrastructure across
manufacturing capacity and its export
railroads, roads and ports. Addressing this
portfolio as a means of reducing risk, said
issue highlights the importance of federal and
Wilfredo Ramos, President Mexico and Latin
local state support, as these governments
America District, UPS. Currently, Mexico’s
approve and oversee the development of
manufacturing capabilities are concentrated
infrastructure projects and have the power
mainly in automotive manufacturing, but the
to improve security along these avenues.
country has the capabilities and investment
As it is, security is the highest cost for the
attractiveness to expand into new frontiers.
transportation of goods in Mexico and it is
Bridging this gap will be challenging but
of immediate concern given that investor
Mexico should be able to extract value from
confidence is directly tied to it. This was a
its standing free-trade agreements with its
concern that resonated with transportation
northern neighbors, which have expressed
workers who staged protests that crippled
interest in exporting their manufacturing
the national railroad network in 2021 and
to Mexico. At the moment consultants lack
congested roads earlier this year.
sufficient information to guide this process step-by-step, but these issues are not
A parallel development is the digitization
different to the ones they first encountered
of processes to improve traceability and
when US businesses decided to export their
expedite international exports, which are
manufacturing process to China, said Carlos
plagued with time-consuming bureaucratic
Ornelas, Associate Partner, McKinsey &
customs. Logistical companies in Mexico
Company. Ultimately retroactive feedback
are racing against the clock to modernize
between these partnerships can give way
and digitalize their internal process to
to a fruition of a North American industrial
gain market supremacy. They must also
manufacturing unit.
cope with the surge of e-commerce and prepare for the influx of business expected
These three elements highlight a starting
to come from US manufactures. To support
point for Mexico to begin building up as
these efforts, the Mexican Transportation
needed to attract investment and partners,
Institute (MIT) announced plans to develop
key steps in the achievement of its ambition
a national intelligence center for transport
of becoming a manufacturing hub.
17
C on f e r e nc e H ighlights SIGNIFICANT GLOBAL UNCERTAINT Y TO HINDER MEXICO’S GROWTH Mexico is going through a complicated
T h e ra isi n g of U S i nte re s t rate s will
time as its slow economic recovery has
also heavily influence Mexico’s growth
been hindered by global challenges and
capabilities, according to Alejandro Padilla,
price pressures. The sobering realities
Chief Economist and Managing Director of
that surround the countr y ’s economy
Research, Grupo Financiero Banorte. Padilla
must be weighed against a landscape
believes that these rates will continue to
of prevailing anxiet y and uncer taint y
rise at a comparatively accelerated pace
i n t h e g l o b a l m a r ke t s , a c c o r d i n g to
throughout 2022, despite the US economy
some of the country’s most renowned
demonstrating its resilience and flexibility
economic experts.
through high rates of job creation in the last few months. Padilla believes that other
M exico’s ongoing economic recover y
central banks around the world, including
is going through a difficult phase, said
Mexico’s, are likely to follow the US Federal
Adrián de la Garza , Chief Economist,
Reserve’s cue and even go beyond it, raising
Citibanamex. Pressure is mounting on
interest rates even more aggressively. In this
a number of key supply markets, which
context, Mexico’s healthy export markets
include semiconductors, grains and various
must play a role in cushioning some of the
other commodities. All of this poses a
rougher effects of these indicators. “Exports
number of significant risks that could
will be the main driver for economic
decrease Mexico’s growth forecasts or cast
recovery. Mexico has to analyze the current
a shadow of doubt over those being too
environment to see where it can have a
positive in their predictions. International
competitive advantage. The opportunities
circumstances are complicating an already
to grow are there. Mexico has a lot of
complex national situation. “The recovery
potential, not only geographically but also
outlook is complicated due to the Russia-
demographically,” said Padilla.
Ukraine conflict and the recent lockdowns in C h in a . Fro m th e b e g in n in g of th e
Mexico will likely follow the global trend of
geopolitical conflict, we saw increasing
weak growth rates that spell out a longer
p r i c e s o f r a w m a te r i a l s n e e d e d f o r
and more drawn out economic recovery
production,” said de la Garza.
process following the pandemic , said
18
C on f e r e nc e H ighlights Jessica Roldán Peña, Chief Economist,
of the government seeks to protect that. If
Casa de Bolsa Finamex. Banxico’s ability to
the conflict continues or escalates, then the
maneuver beyond the aggressive agenda
plan contemplates an effort to increase the
of the US Federal Reserve is quite limited,
production of grains in the country.”
she added . “Central banks in diverse economies, including Mexico, are expected
Mexico’s economic plan also contemplates
to raise interest rates to maintain inflation
an adjustment of the Federal Roads and
at acceptable levels. The challenge for the
Bridges (CAPUFE) highway tolls and of
domestic economy this year is for internal
rail transportation fees. Through these
d e m a n d to re m a in s te a dy a n d a fl o at
changes, Mexico’s growth capabilities will
and, in that sense, we do have the good
continue to depend on the degree to which
news of consumption having returned to
the country can compete as a commercial
pre-pandemic levels.” The weakness of
par tner as the US - China relationship
Mexico’s growth rate is not necessarily
continues to transform. “There is a clear
linked to Mexico’s current government
intention from the US and Latin-American
administration, said Roldán, because it has
countries to compete against China in
been an issue for the country for the past
offering the highest national and regional
30 to 40 years. During that period, Mexico
added value,” said Mariscal.
struggled to significantly go beyond an annual growth benchmark of 2.5 percent.
The world “has become more regional than global af ter the pandemic ,” said
The war in Ukraine is impacting some
C arlos Fiorillo, Managing Director for
unexpected commodities such as ammonium
Latin America Business & Relationship
sulfate, an essential component of commercial
Management, Fitch Ratings . This fac t
fertilizers, according to the analysis of Rodrigo
u n d e r sco re d M exico’s b et o n th e
Mariscal, Head of Economic Planning Unit
nearshoring boom and will positively
and Chief Economist, SHCP. This, in turn, is
im pa c t exp or t ma rket s , contin uo usly
impacting Mexico’s growth. “Mexico is an
increasing the country’s growth rate and
important importer of fertilizer commodities;
the pace of its economic recovery.
25 percent of this one comes from Russia, for example, so the recent economic plan
An issue that could hinder Mexico’s growth rate is the political uncertainty surrounding
“Exports will be the main driver for economic recovery. Mexico has to analyze the current environment to see where it can have a competitive advantage. The opportunities to grow are there. Mexico has a lot of potential, not only geographically but also demographically”
investment in the energy sector. “The recent government policies create uncertainty in the energy sector and the industry in general, which is not favorable in the short term for investment,” said de la Garza. While Mariscal minimized the impact of this uncertainty, Roldán warned that it could have a widespread effect since the
Alejandro Padilla
energy sector “might seem small in terms
Chief Economist and Managing Director of Research | Grupo Financiero Banorte
of investment percentage but its impact is economically transversal.”
VALLEJO -I TO REAWAKEN MEXICO CIT Y’S KEY INDUSTRIAL ZONE Since its inception, the Vallejo industrial zone
the government of Mexico City wants to
has been a reference of industrialization in
restore Vallejo’s industrial might and turn
Mexico City. While the industrial zone lost
it into a world-class industrial region, said
its prominence in the 1980s and 1990s,
Fadlala Akabani, Minister of Economic
19
C on f e r e nc e H ighlights Development, Mexico City Ministr y of
capacity and introduce new technologies for
Economic Development.
better safety and management procedures.
Located in the municipality of Azcapotzalco
The second action line focuses on
in the north of Mexico City, the Vallejo
urban planning through the new Urban
neighborhood has a long history of industrial
D evelopm e nt Pa r tial Program , which
production. Until the 1960s, Vallejo was an
will renovate about 163 properties that
attractive industrial hub that accounted for 7
re p rese nt 6 1 0, 5 3 4 m 2 . It s g o a l is to
percent of the country’s manufacturing GDP.
preserve industrial land use and boost urban
However, a process of deindustrialization
development by 2050.
caused by the closure of the “March 18” oil refinery, the earthquake of 1985 and Mexico’s
The third action line focuses on research
opening to international free trade in the
and innovation. In 2021, 16,760 science,
1990s, led Vallejo to lose its manufacturing
technology, engineering and mathematics
focus . To restore the neighborhood ’s
(STEM) students graduated from universities
industrial capabilities, the local government
in the region, greatly strengthening the
is pushing forward the Vallejo-i initiative,
region’s capabilities in artificial intelligence,
which aims to breathe new life into the
automation of manufacturing systems,
industrial capabilities of Mexico City.
logistic s and supply chain , precision mechanics, manufacturing systems, data science, computing, robotics and electronics
“Currently, the Vallejo industrial zone hosts 1,008
systems. “These students graduated from
economic units, offering 47,528 jobs in 17
12 higher-level education institutions,
different sectors, including pharmaceutical,
including Universidad Tecmilenio Ferrería,
processed food, beverages, cleaning
Universidad Autónoma Metropolitana
products, electronics and machinery”
and Centro de Investigación e Innovación
Fadlala Akabani
Tecnológic a del Instituto Politécnico
Minister of Economic Development | Mexico City Ministry of Economic Development
Nacional,” said Akabani. R&D efforts will focus on sustainability, Industry 4.0, entrepreneurship and waste processing. Some projects will take place
“Currently, the Vallejo industrial zone
in the Transfer Station and Selection Plant
h ost s 1 ,0 0 8 e co n o mic unit s , offe ring
for Recycling and Utilization of Urban Solid
47, 5 2 8 j o b s i n 1 7 d i ff e r e n t s e c t o r s ,
Waste and the Center for Technological
including pharmaceutical, processed food,
Development and Innovation (CDIT). This
beverages, cleaning products, electronics
transfer station is the most modern and
and machinery, “said Akabani.
complex water recycling plant in Latin America, said Akabani, and can process
In 2019, Mexico’s City government launched
1,400 tons of solid waste per day. The CDIT
the Vallejo-i strategy to attract investments
is the first data center in Latin America
related to Industry 4.0, clean energies, data
with an ICREA Level III Certification. In
centers, logistics and industrial corporate
Dec . 2021 , Mexico City Mayor Claudia
services. “We want Vallejo-i to renovate
Sheinbaum announced an MX$12 billion
Vallejo’s industrial vocation,” said Akabani.
(US$571.7 million) investment in the CDIT,
To achieve this goal, the Vallejo-I strategy
as reported by MBN.
focuses on four action lines. The first is improving the neighborhood’s infrastructure
Vallejo-I’s fourth action line is economic
improvement by reinforcing roads and
development, overseen by the Ministry of
rehabilitating water and sewage networks.
Economic Development. “We encourage
Efforts will also focus on expanding the cargo
once -a-month business networking
station Pantaco to increase its container
between companies in Vallejo from the
20
C on f e r e nc e H ighlights l o g i s ti c s , m e t a l wo r k i n g , e n e r g y a n d
“Vallejo’s industrial area has not evolved into
c h e m i c a l i n d u s tr i e s , a m o n g oth e r s ,”
a world-class real estate development. We
said Akabani.
must help industrial parks evolve into digital parks and welcome new types of companies,
The Ministry of Economic Development
such as data centers,” said Claudia Esteves,
signed a special collaboration agreement
Executive Director, AMPIP, to MBN.
with the Mexican Association of Industrial Pa r k s (A M P I P) th at will su p p o r t th e
In Mar. 2022, the Ministry of Economic
attraction of foreign direct investment in
Development (SEDECO) and the Ministry
Mexico. Through this agreement AMPIP
of Education, Science and Technology
will approach companies and provide
(SECTEI) signed an agreement with the
information in a wide variety of languages
Association of Real Estate Developers (ADI)
to help them identify the best location to
to boost the participation of the real estate
establish their operations.
sector in the Vallejo-i industrial zone.
GOOGLE: GEN Z IS RESHAPING CONSUMPTION Generation Z, the first true digital natives, is
America, according to the World Bank.
reconstructing the way that people connect,
From within these markets, they have played
interact and consume on the internet.
an important role in the development and
Understanding their driving incentives and
adoption of electronic commerce.
behavior in this digital landscape will be quintessential to the formation of business
Their connectivity represents over half of
strategies, according to Julian Coulter,
Mexico’s internet activity, with 84 million
Country Director México, Google.
daily users according to a study by the Internet Association Mexico. As such,
“Of the 84.1 million internet users in Mexico,
they will play a significant role in the
49.9 percent belong to Gen Z. They are the
internet and digital platforms of the future.
ones who will determine the future of the
Pinning down this generation has not been
internet,” said Coulter.
straightforward as it is one of the most diverse in history. Nevertheless, they are
B orn b et we e n 1 9 97 a n d 2012 , G e n Z
predominantly characterized by values
only represents 32 percent of the global
related to inclusivity, driven by a sense of
population. Nevertheless, they influence
accountability to contemporary issues and
91 percent of household decisions. This
live to be creative, according to a consumer
generation represents one of the most
report by GWI.
relevant business opportunities because it is the first to grow hand in hand with the
Gen Z is preoccupied with sociopolitical
internet and digital platforms, said Coulter.
issues ranging from inclusivity to climate
Furthermore, while they represent over
change, with 46 percent affirming their
40 percent of the global labor force, they
concern for these ongoing issues, more
are mainly concentrated in Asia and Latin
than any other generation. They consider gender fluidity to be the standard and are constantly challenging stereotypes
“Of the 84.1 million internet users in
as means of dismantling institutional
Mexico, 49.9 percent belong to
disparities. They also value mental health
Gen Z. They are the ones who will
and creativity, with 51 percent engaging in
determine the future of the
at least one creative daily activity, of which
internet”
they have chosen video content as their
Julian Coulter
favorite medium. A joint study by Google
Country Director México | Google
and YouTube found that 80 percent of Gen Z published at least one video online
21
C on f e r e nc e H ighlights during the last year, thereby making them
they have learned something new on the
authentic content creators.
platform. These incentives have allowed YouTube to achieve the greatest market
Gen Z is using casual content creation to
penetration among Gen Z in Mexico and
push their cultural relevance and values.
Latin America, according to Reuters.
In the last year, 5 4 percent of Gen Z respondents tried a new camera filter while
Gen Z has been linked to three main passions:
filming, 52 percent participated in at least
music, gaming and sports. Music is in their
one social media challenge per month and
DNA , said Coulter, as the generation
34 percent created at least one meme in
consumes on average 18.4 hours of music a
the last year. One of their favorite digital
week, as they consider it to be fundamental
platforms is YouTube, which they have
to their emotional wellbeing. Furthermore,
deferred to both express their creativity
through gaming , one in three G en Z
and learn . From this librar y of video
respondents discovered new music while
content, 80 percent of Gen Z respondents
playing video games.
have expanded their knowledge base and 68 percent refined and or developed
Video games also play an important role in
new skills for the future, according to the
the daily life of Gen Zs, who consider gaming
same study.
more than a hobby and have used these spaces to create digital communities. This
In Mexico, YouTube plays an important
is a market on the rise in Latin America, as
role in the daily life of over 56 million daily
reflected in the more than 800 billion videos
users above the age of 18, according to a
of video games, 90 million hours of streaming
study by Comscore. According to a Google
and 250 million content videos on the topic of
Topshop study, 76 percent of Mexicans
gaming. Video streaming of sporting events
say that YouTube makes them happier, 78
is helping people connect to live experiences
percent recognize the added value that the
from afar, a market with significant potential as
platform provides and 87 percent claim
reflected on a growing consumer preference.
A MAP TO THE 5G REVOLUTION The introduction of 5G networks and services
chief drivers of job creation and its impact
will transform the structure and capabilities of
will not be limited to the tech sector, he
a wide spectrum of industries, according to
added. Because of this incentive and many
industry experts, especially given the fact that
others, 5G could be the secret ingredient
the pandemic made businesses more reliant
that finally closes Latin America’s digital
on cloud-based data transmission.
divide. This achievement will put cloudbased services in the hands of populations
5 G will b e o n e of th e b a c k b o n e s of
that will be new to this type and degree of
digitalization processes throughout Mexico
access, allowing them to contribute and
and Latin America, according to Chafic
innovate the digital space and economy. “5G
N a s sif, N o r th L ATA M a n d C a ri b b e a n
technology has more capacity and will help
President, Ericsson. 5G will be one of the
us to reduce the digital gap in Latin America, where there are a lot of people who still lack
“5G technology has more capacity and will help us to reduce the digital gap in Latin America, where there are a lot of people who still lack access to the internet”
access to the internet,” said Nassif. For this promise to be fulfilled, more promotional efforts are needed so the private sector can inform governments
Chafic Nassif
of the extensive returns of spending in 5G
North LATAM and Caribbean President | Ericsson
networks, says Rodrigo Martineli, Latin America Vice President and General Manager
22
C on f e r e nc e H ighlights Latin America, Rackspace Technology. The
we have right now is talent sourcing, as it
entire Latin American region could greatly
is not only expensive but scarce. It is very
benefit from large scale 5G infrastructure
difficult to harness our potential without the
development and investment, according to
right talent,” he added.
Martineli: “5G will help existing businesses to modernize themselves, while allowing the
Companies are already demanding 5G
generation of new ideas that we cannot even
technology, according to Julio Velázquez,
imagine yet.”
M a n a g i n g D i r e c t o r, G o o g l e C l o u d México. In a recent study, seven out of
The growth of 5G is a global technological
ten companies sur veyed showed high
race that will define the evolution and
degrees of enthusiasm and willingness
positioning of competing digital economies,
to i nve s t i n 5 G t e c h , h e a d d e d . A s
allowing Latin America to compete with
companies increase their focus on team
the EU, according to Martineli. To achieve
building and collaborative approaches
this goal, the technology must be backed
to skill development and problem
by public investment. “There needs to be
solving, 5G communication will become
government encouragement. It is also key
essential to the fulfillment of companies’
to create facilities for entrepreneurs to keep
commercial agendas. “Collaboration will
developing these technologies,” said Nassif.
drive the commercial application of the 5G network,” said Velazquez. Meanwhile,
5G will enable an explosion of new services
the expansion of 5G networks is driving
in various industries by greatly accelerating
the development of new technologies
the speed at which data can travel, fully
that will seem miraculous to our current
transforming data storage infrastructure,
understanding of certain sectors, such as
said Martineli. This process is already
healthcare. “These new technologies will
underway because the pandemic made
transform many industries. For example, in
cloud-based services essential to every
the health sector, telesurgery is expected
economic sector.
to become a reality,” he added.
“The real revolution is the decentralization
As 5G becomes prevalent, cybersecurity
of data and 5G will boost that,” said
becomes a growing concern. Protecting
Martineli. However, this transformation will
from ransomware at tacks and similar
put new technical burdens on companies
threats has become an important part of
and consumers that will require new talent
companies’ concerns regarding their digital
development programs that train technicians
transformation, said Alfredo Gutiérrez,
to fix emergencies. “The largest challenge
Mexico Director General, Workday.
23
C on f e r e nc e H ighlights “An important challenge is definitely security.
Eve n a g r i c u l t u re a n d s tr a te g i c fo o d
As an ecosystem, we have to work together
sourcing will be significantly altered by
to keep security always in mind, especially
5G applications, said Nassif. Given the
when handling so much data,” said Nassif.
relevance of these industries to the region’
These security concerns have to take into
economies, security should be a priority
account the history of the companies, their
as 5G continues to be deployed across
experience and what they bring to the table.
the region.
DATA CENTERS ADOPT TECH TO REDUCE THEIR ENVIRONMENTAL IMPACT A challenging environmental scenario is
Data centers are exploring different
prompting consumers to demand more
sustainability alternatives, such as using lithium
accountability from the businesses they
batteries, gas-powered generators and cooling
work with, leading companies to increasingly
water systems, said Juan Carlos Casillas, Sales
implement business practices with an
Manager, Stulz México. These centers are also
environmental and social perspective. Data
betting on renewable energies and aligning
centers, which contribute to 0.3 percent of
with the latest trends in the market. “Some
global CO2 emissions and are accountable
data centers, which consume around 600
for the consumption of 1 percent of global
megawatts, are obtaining their energy from
electricity demand, are also committing to work
nuclear sources,” said Josué Ramírez, Regional
toward a greener future. By focusing on eco-
Director Latin America, IDCA.
friendly trends, integrating circular thinking and embracing digitalization, data centers can
Chip and server manufacturers are also using
greatly decrease their environmental impact
technologies that process more information
and promote sustainable practices among
in less space, increasing efficiency. Moreover,
different industries.
the cloud is reducing the use of spaces and promoting sustainable operations.
“Data centers are not static; they must
“Virtualization and the use of the cloud should
improve and be at the vanguard,” said Amet
mark an interesting trend to follow in our
Novillo, Country Manager, Equinox. The
country,” said Ramírez.
constant search for efficiency in the use of energy must be a priority for data centers,
Although the implementation of eco -
said Novillo. Equinix is taking advantage
friendly solutions represents an important
of its global experience to implement best
investment for data centers , these
practices in Mexico through its “Future First”
measures reduce the use of physical spaces
sustainability strategy, which is based on
and speed up the commercialization of
Environment, Social and Governance (ESG)
ser vices and products. Costs are also
initiatives. The company aims to build a
reduced while more profit is achieved
business that brings the world together to
by a llowin g co m p a n ie s to e nte r n ew
create innovations that will enrich businesses
markets, said Novillo. Data centers are
and the planet. “As a company in the
also attractive because both providers
digital development sector, we care about
and users value the implementation of
sustainability on our planet,” said Novillo.
sustainable operations. “Large cloud and application suppliers are companies that advocate for sustainability and they are
“Virtualization and the use of the cloud should mark an interesting
looking for data centers that provide it,” said Novillo
trend to follow in our country”
Josué Ramírez Regional Director Latin America | IDCA
D a t a c e n t e r s , h o w e v e r, f a c e m a n y challenges in the road to sustainability. The largest hurdle is having an adequate
24
C on f e r e nc e H ighlights
plan to make eco-friendly data centers.
the demand for data centers is attributed
“Having a suitable geographical location
to the pandemic and the acceleration
is essential for a data center to be eco-
o f d i g i t a l i z a t i o n . “ Tr e n d s , s u c h a s
friendly,” said Casillas.
e-commerce and digital automation are digitizing processes where data centers
Legal regulation is also needed so data
play an important role. With the support of
centers follow sustainability guidelines.
the government, we must make electronic
“Companies need regulation from an entity
recycling a reality to benefit the planet,”
to ensure that they are operating properly.
said Casillas.
A recycling assessment is essential to help companies to work sustainably,”
Mexico is Latin America’s second-largest
said Ramírez.
economy and its proximit y to the US helps Mexico link with countries to the
By recycling its electronic waste, the data
north and south, said Novillo. “There are
center industry would transform into a
many opportunities. Mexico’s potential
more sustainable one, as it will boost
digitization market accelerated during
ci rcu l a r e co n o my p ra c ti ce s . C i rcu l a r
the pandemic. The digital transformation
economy strategies across all industries
is attractive because you can reach more
are a response to the growing scarcity
markets while accelerating income and
of re s o u rc e s a n d th e i m p o r t a n c e o f
decreasing investment,” he added.
sustainable value chains is increasing. Demand is growing, so electronic
However, many companies across different
waste should be managed to lessen the
sectors are still reluctant to digitalize, as they
environmental impact of this industry,
worry about having the correct infrastructure
said Casillas.
to transition to eco-friendly operations. Ramírez explained that companies should
“A great part of the components used
not worry about infrastructure, which is
i n d a t a c e n te r s c a n b e r e u s e d ; i t i s
already being offered by several providers;
important to promote recycling across
they should focus on embracing the benefits
the sector,” said Ramírez. The increase in
of digitalization.
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C on f e r e nc e H ighlights Mexico’s geographic location makes it an ideal
services. “We are going to become a reference
spot for data centers, while the continued
country in data centers. We are going to be an
digitalization of everyday life will only lead
important hub globally, increasingly leading
more companies and users to demand these
to private investment,” added Casillas.
VTEX: PLENTIFUL DEVELOPMENT OPPORTUNITIES LAY IN E- COMMERCE As Mexico and Latin America’s e-commerce
is in its early infancy, Mexico has significantly
markets receive the push they need to take
more space to grow into, a characteristic
off, their exponential growth has created a
that has not gone unnoticed.
demand for scalable solutions. Companies are now running against the clock to take
Domestic e-commerce companies will be
advantage of digital solutions to capture
increasingly pressured to place technology
and cement their market presence as
at the core of their business strategy to
th e s e c to r g et s m o re c rowd e d , s a i d
remain profitable. Digital solutions will
Alejandro Colín, Vice President of New
also be essential in addressing concerns
Business, VTEX.
related to payment security due to their ro l e i n ex p a n d i n g p ay m e n t o pti o n s ,
“Time is becoming increasingly valuable and
sharing information and optimizing logical
digitalization has brought out the benefits of
processes. Fortifying payment security
e-commerce,” said Colín.
and expanding payment options go hand in hand, and will be key to attracting new
Mexico’s digital awakening has seeded
consumers and maintaining consumer
a growth potential that is yet to be fully
confidence.
exploited. This is best exemplified by the sustained growth of its e-commerce market
Sharing information in real-time across
that, for the third year in a row, is among the
physical locations is necessary to making
top five countries with the largest observed
business decisions related to logistics, which
growth. Mexico’s e-commerce market grew
should be complemented with data analysis
27 percent in 2021, inflating its market value
to identify new business opportunities, said
from MX$316 billion (US$15.6 billion) to
Colín. This is a known pain point that many
MX$401 billion (US$19.8 billion), according
companies struggled to develop at pace with
to V T E X . C o n s u m e r s ’ d e c i s i ve s h i f t
market demand. Overall, the companies that
towards e-commerce has allowed startup
proactively optimize along these development
e-commerce companies to soar, a market
opportunities will likely continue to enjoy
opportunity that has incited more actors
compound growth.
to join the sector and attracted millions in investment.
At the moment, Mexico’s digital consumer market can be reduced to three main
More recently, adjacent industries have
demographics including: intensive, recurring
begun to explore this market space, giving
and occasional shoppers, according to
way to entire new business avenues to be
VTEX. The first, intensive shoppers, are
pursued. This includes supporting industries
mostly millennials who grew up with the
such as logistics and fintech. As the market
internet and have the purchasing power to recurrently buy online. Recurring shoppers
“Time is becoming increasingly valuable
are mainly represented by people over 45
and digitalization has brought out the
years old and of middle class who lack the
benefits of e-commerce”
same purchasing power of their younger
Alejandro Colín Vice President of New Business | VTEX
counterparts. Finally, occasional shoppers are mainly those over 65 years old, retired and with low economic flexibility.
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C on f e r e nc e H ighlights
RELIABLE FEEDBACK LOOPS: THE KEY TO A SMOOTH PAYMENT EXPERIENCE As the e-commerce industry continues its
Customers want to know the ser vice
accelerated evolution after the pandemic,
is available, even if they do not use it,
it becomes increasingly clear that customer
said Bauza.
feedback is essential when designing the ideal payment experience, according to
To a chieve high e r rates of custo m e r
sector experts.
retention, an omnichannel approach can also facilitate the gathering of feedback
An omnichannel strategy is becoming an
from current, past and potential customers,
essential part of the business strategy of
More channels to support customers also
major and minor retailers, explains Bernardo
means more channels through which
Bazua, Director of Omnichannel and Digital
b u sin e s se s c a n re ce ive , a n a ly ze a n d
Strategy, Coppel. Omnichannel strategies
process clients’ opinions on their purchase
increase and facilitate access. Companies
experience. Keeping feedback channels
must ensure that their customers have access
open and as broad as possible is essential to
to the channel of their preference when
capturing as much information as possible,
acquiring any product or service, according
explained Armando Velez Médici, Head of
to Bazua. Retailers that offer certain products
E-commerce, OPPO.
and services through some channels but not others have an incomplete offering.
While some believed that the growth of e-commerce over physical retail might make
“An omnichannel strategy means making
lower prices more important that payment
products and services available through
experience, this has not been the case.
different channels so the client can choose
Clients are favoring a smooth user experience
the way they want to be supported,” said
(UX) over price, according to Erick McKinney,
Bazua. Customers spend more when they
Mexico Country Manager, Adyen: “Over 39
feel they can choose their own way to get
percent of consumers favor experience over
in touch with a company, without having
price when making a decision.”
to provide information several times . A s t h e r hy t h m o f d i g i t a l p u r c h a s e s
“An omnichannel strategy means making products and services available through different channels so the client can choose the way they want to be supported”
Bernardo Bazua Director of Omnichannel and Digital Strategy | Coppel
intensified throughout the pandemic , it became clear that the usual payment security protocols had to be redefined since in their pre-pandemic shape, they heavily hindered the payment experience, said McKinney. “Fraud prevention and payment experience impacted consumer experience during the pandemic, sometimes preventing clients from buying online.”
27
C on f e r e nc e H ighlights This concern for redesigning security
feels that they should not have to input
gatekeeping not only applied to fraud
additional information or repeat an input.
prevention but also to the management of
Any friction embedded into the process
customer data, which must not become less
needs to be identified and extracted, which
secure but should be more agile. Companies
is impossible without customer feedback.
need to generate new ways to use customer information to improve UX without making
Much of this friction can be concentrated in the
the information more vulnerable, according
specific point of payment, said Christian León,
to Pablo Estevez, CEO, GUS.
Latin America Regional Director, Signifyd. When a payment gets declined, a lot of data
“Companies have to be more proactive
can be salvaged to determine how those
with th e info rm atio n th ey h ave f ro m
declinations can be avoided in the future,
clients to make the user experience more
thus increasing customer retention rates. “It
unique and customized,” said Estevez.
is very important to understand the reasons
This can only be achieved through open
why clients’ payments get declined when
and broad feedback loops through which
buying something. We recommend investing
companies can identify the points in the
in technology to optimize lead conversion and
purchase experience at which the customer
minimize desertion,” said León.
ALLIANCES BETWEEN FINTECHS, BANKS INCREASE FINANCIAL OFFERING The rapid digitalization of numerous sectors
introducing technology to the financial sector.
has led to the emergence of a new kind of
There are opportunities for collaboration
financial service provider: fintechs. While
between traditional banks and fintechs
some may believe that these newcomers
because the first have more experience in
want to challenge banks’ market dominion,
finance and the second in technology.
by working together these two types of companies can further expand their
Through these alliances, banks can offer
services and increase their client bases.
co m p l ete a n d co m p etitive p ro d u c t s . “The greatest transformation that banks
After the pandemic, fintechs have become
can have is through their involvement
more popular because they are making
i n fi n a n c i a l i n c l u s i o n , ” s a i d L o r e t o
financial services more accessible to all
Zumalacarregui, H ead , B nex t M exico.
economic sectors. Fintechs are “a space
I f b a n k s u se te ch n o l o gy with in th e ir
where innovation and social integration
operations, they can reduce costs by 80
are possible,” said Andrea Picardi, Country
percent and reinvest this profit in talent
Manager, Tribal. These companies have
or their platforms. Banks can also greatly
c h a n g e d h ow fi n a n c i a l s e r v i c e s a r e
reduce the use of cash , which is “ the
structured, provisioned and consumed.
greatest enemy for the development of an economy,” said Mariana Franza, COO, Ualá.
“A space where innovation and social integration are possible”
Andrea Picardi Country Manager | Tribal
Fintechs are a good option for banks to bridge the gap between the formal and informal economy. “Both banks and fintechs must be clear about where each one of them adds value. This is crucial
Fintechs, however, face obstacles when trying
for these alliances to be achieved,” said
to partner with banks. “We must stop saying
Ricardo Godínez, CEO, Enso Fintech.
that we are fintechs and we must replace it with techfins because we are experts
Although alliances benefit both players, so
in technology,” said Picardi. Fintechs are
does competition. “It is not bad to compete
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C on f e r e nc e H ighlights because in that way better products are
Blockchain technology has boosted fintech
generated and the user is benefited,” said
growth. “It is impossible to talk about
Franza. Experts agree that the consumer is
growth without mentioning blockchain,”
the center of these alliances and products
said Zumalacarregui. However, blockchain
must be created to offer friendly and
technology also brings difficulties to the
transparent products.
user and fintechs need to make products easy to use, she added.
In 2017, there were around 700 fintech companies; today there are almost 2,500.
The funding boom that took place in 2021
From these, 21 percent are in Mexico. Fintechs
has reshaped the competitive dynamics
have identified an opportunity in Mexico
and differentiation strategies of the Mexican
because the country has extremely an large
fintech market. “These strong investments
underbanked population, with millions
happened because investors saw in Latin
without a bank account. “There are millions
America the need for segments to have
of Mexicans without a credit history. We
access to banking and loans,” said Franza.
want to reach more segments and help in
After the pandemic, the need for digital
the coverage needs such as health, food and
media increased. In Mexico, 30 percent of
housing,” said Godínez.
adults made their first digital purchase during the pandemic and 75 percent of businesses
To tra n s fo r m th i s s ce n a ri o , F i nte c h s
offered digital payments for the first time,
have focused on increasing inclusion
which increased their revenues by over
and democratizing finance. To become
20 percent.
a user of a Fintech company, a person only needs a smartphone and internet
The talent available in Mexico is posing a
access . In L atin Am e ric a , 8 5 pe rce nt
problem for fintechts because there is not
of the population has access to both.
enough talent available to fill key positions.
Moreover, a fintech’s “most effective value
“There are many fintechs but insufficient
proposition is the transparency and safe
developers,” said Godínez. As more money
ecosystem proposals that it offers,” said
is invested, salaries increase, which in
Franza. Fintechs are focused on digital
turn increases the competition for talent
and mobile payment solutions for B2B
between companies. Therefore, Godínez
and B2C markets. “We offer digital and
argued companies it is crucial to invest in
mobile payment solutions such as one-
company culture instead of simply offering
click solutions, which is something that
higher salaries.
brings significant value as users want to do their financial movements in just one
However, during 2022, funding has been
click,” said Godínez.
smaller as it was last year. “Funds have
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C on f e r e nc e H ighlights decreased amid the international context;
We must look for business models that
numerous companies are losing their value
promote investment in Latin America,” said
and fintechs are susceptible to this risk.
Zumalacarregui.
BUSINESSES FINTECH SERVICES: OVERDUE , OPPORTUNE While the digitization of financial services
The COVID-19 pandemic accelerated many
has made significant strides at granting
of the projects that fintech companies
g r e a t e r fi n a n c i a l i n c l u s i v i t y t o e n d
were working on prior to the pandemic.
consumers, there is much work to be done
Digitalization is helping address consumer
to extend these services to businesses.
demands in various and more efficient ways.
Fintechs are currently working to develop
However, the processes that have made
services and platforms centered around
these competencies possible remain different
unmet business needs but fragmentation
from those between banks, and remain very
and an uneven regulator y framework
fragmented, said Armando Herrera Reyna,
pose significant challenges, according to
General Manager, Konfio. This represents a
industry experts.
significant area of opportunity and growth that is still in the early stages of development.
“ We are seeing a digital and mindset
These services should be built on existing
transformation in which clients are at the
infrastructure so fintech companies can focus
center of everything. We are listening to
on evolving solutions instead of reinventing
client’s challenges and necessities,” said
the wheel, he added.
Paulina Aguilar Vela, Co-Founder and Country Director, Mundi.
Fintech companies should aim to address the root causes of financial problems, not the symptoms, said Herrera. For example,
“We are seeing a digital and mindset
companies begin to look for financing options
transformation in which clients
after they missed some payments from
are at the center of everything.
their clients, which ultimately reduces their
We are listening to client’s challenges
liquidity and forces them to seek credit. The
and necessities”
objective is not to treat the symptom, which
Paulina Aguilar Vela Co-Founder and Country Director | Mundi
in this case is credit, but to create services that circumvent these occurrences in the first place and at the direct benefit of the business clients. An added aspect of this challenge concerns identifying what are the primary
Tra ditional ba n king institutions have
issues businesses face and who are the
neglected to invest in the development
respective stakeholders and decision makers.
of B2B finance services, specifically those pertaining to international commerce,
“Companies with a culture based on constant
leaving small businesses with no recourse
innovation will gain a predominant position in
other than outdated traditional models, said
the market,” said Vela.
Aguilar. This often led SMEs to act as banks for their large suppliers, which restricts their
Another important challenge is the
financial liquidity and wellness. Financial
regulatory framework, which needs to
factoring has allowed SMEs to participate in
move faster because tech is advancing
international exports without having to use
faster than regulation can keep up with,
their capital to finance their providers and
s a i d G u i l l e r m o N a r a n j o , D i r e c to r o f
clients, said Aguilar. Solutions such as these
Financial Services Applications, Oracle.
have been created from listening to the
There is a lot of discussion regarding
needs of businesses, while using technology
d at a , s to ra g e a n d s e r vi ce s , wh i c h is
to facilitate and expedite these processes.
hurting the continued advancement of
30
C on f e r e nc e H ighlights this sector. These challenges concern
used. Regulation has to go faster than
both backend-as-a-Service (BaaS) and
technology,” said Naranjo.
o p e n b a n k i n g , wh i c h n e e d m atc h i n g international regulations to function and
Another aspect of this partnership should
prevent fraud and money laundering. This
concern platform-to-platform communication
will ultimately require fintechs, traditional
so that they can work in conjunction,
banks and federal governments to work
misconfigurations in cloud services caused
in partnership to fast track legislation.
by APIs that do not match leave spaces for
Partnerships will be fundamental to the
unauthorized entry. Fintech companies that
accelerated fruition of this emerging
circumvent this problem can benefit from
sector considering that there are numerous
greater security.
and weighted developments occurring in parallel to one another.
Overall, there are significant opportunities in this emerging market, which stands to benefit
“Regulation is a controversial topic that
from greater cooperation and partnerships
has delayed progress. Nevertheless, it
among fintechs and traditional banking
is important to understand how data is
institutions.
A DECISIVE MOMENT FOR RISK CAPITAL Despite some significant recent changes
the state of the industry, according to Luis
in m a rket dyn a mic s , we a lth cre atio n
Barrios, Founder and CEO, Arkangeles.
can still be promoted through the smart
The first five months of 2022 contrast
deployment of investment management
sharply with an ex tremely successf ul
services, according to industry experts.
2021 that was charac terized by large funding rounds being announced at an
The venture capital (VC) and investment
accelerating pace, resulting in record
management sector experienced a rough
numbers of new unicorn and “soonicorn”
landing in 2022 that revealed much about
entities and entrepreneurs, particularly
31
C on f e r e nc e H ighlights in Latin America. Now, sobering market
presence of cr yptocurrencies in their
indicators and the problems arising in the
portfolios are now scrambling to deal
crypto and NFT spaces have challenged
with sudden and sharp contraction of
the positive assumptions made at the
this market. However, fintechs could still
year’s outset. Barrios says that this is an
benefit new adopters, said de la Madrid.
opportunity for companies to focus more
The reason is that many in Latin America
on their commercial divisions and a little
a re un ba n ke d a n d those with a ba n k
less on technology so as to consolidate
account are not satisfied with the service,
their resilience and flexibility. “Funds will
representing an enormous opportunity
notice the ‘cockroach’ companies that can
to offer new ways to build wealth. “Banks
survive this nuclear winter. This will lead
have not managed to innovate at the same
cockroaches to transform into unicorns,”
pace as fintechs and this represents a big
said Barrios.
opportunity. Latin America is at a very good moment. Large capitals have entered
The Mexican and Latin American VC and
the region and many of the funds still
startup spaces can “evenly match and
have a considerable share of that capital.
overcome their competition in the US and
Proactive companies with a talented team
the EU, so that we can remove that attitude
can still access the available capital.”
as colonized countries that dictates that we cannot hope to compete,” said Barrios.
An important part of fulfilling this sector’s
Simultaneously, he cautioned against
promise is the matter of diversity, according
complacency from Mexicans, making clear
to Anna Raptis, Founder and Managing
that foreign startups or Mexican startups
Partner, Amplifica Capital. The risk capital
led by foreigners can easily overcome
industry is in serious need of more inclusion
them. “Mexicans should not expect to have
initiatives that drive the diversification of its
an advantage in Mexico simply because
participants. This diversity needs to cover
they are the ones working in their own
gender and race, but also socioeconomic
national territor y,” said Barrios . Fund
status and cultural background.
and investment managers must also be honest with themselves about what they
“A large challenge is to drive inclusion
are selling to their customers, he added.
and provide access to a larger segment
While many companies offer a path to
of the population, fostering creativity
financial freedom, they do not fulfill that
and enriching the risk capital sector,”
promise, leading to more skepticism and
said Raptis. Other issues to be addressed
lack of trust.
include the need to simplify regulations, w h i c h a r e q u i te c o m p l ex i n M ex i c o ,
These conditions outline the obstacles
according to Raptis. The sector also needs
ahead for the sector. “ There needs to
to foster grassroots efforts to support
b e m o re a u d a cit y a m o n g tra d iti o n a l
smaller national funds and companies.
companies to draw in skeptics and to
As Raptis explains, “It is key to support
accelerate the ecosystem. Collaboration
local funds. These are the foundation of
between big and small companies also
the industry in Mexico and it is necessary
ne e ds to be strengthene d . There are
to strengthen their results.”
still biases among large transnationals against purchasing from newly created
Suppor ting local funds also means
companies,” said Barrios.
giving more access to risk capital to local companies that address needs specific to
While the years before 202 2 were
the region. It also means giving more access
extraordinary, the nervousness that this
to investment services to local populations
year has generated is quite palpable,
whose needs and capacities might be
said Javier de la Madrid, Head, GBM+.
ignored by larger transnational entities,
Numerous investors with a prominent
said Raptis.
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