Page 68 - STRATEGY Magazine

INTERVIEW: BANCOMEXT
FRANCISCO N. GONZÁLEZ DÍAZ
CEO Bancomext
Capitalizing on Complexity
Mexico has one of the world’s most diverse economies. The challenge for government officials is finding a way to equip all of those sectors—and all of Mexico’s regions—for success in the 21st century.
mechanization. To be a leader in Industry 4.0, Mexico needs a more robust network.“No country will be completely ready if they don’t have 100 percent coverage in 4G,” he says.
SPREADING THE WEALTH
Yet, while Mexico’s economic variety is a major strength, there’s another type of diversity that weakens the country’s economy. The fortunes of Mexico can look vastly different depending on the point of view. Northern and central areas, like Aguascalientes, Querétaro, San Luis Potosí, and Puebla, are seeing sharp economic growth of 6 percent, rivaling that of China. However, other regions of the country have minimal or even negative growth. In those places— Michoacán, Guerrero, and Oaxaca, for example—González sees special economic zones as one solution to help the areas catch up. But he says that kind of intense economic focus has to extend beyond temporary tax breaks; it must also involve a reorientation of the regions’ education systems to meet the needs of Mexico’s 21st-century workforce.
“The idea is to develop real talent,” González argues. “You need to make people more productive, more competitive, with more knowledge, and this is something that’s happening in Mexico.” One successful model, González notes, is in Chiapas, which has become known for educating top-tier information technology engineers. As more would-be engineers go to university in Chiapas, the region is earning a reputation as a tech hub and a talent resource.
SUSTAINING SUCCESS
Boosting the country’s educational infrastructure has meant an increasing focus on innovation. The country is already ranked 10th in terms of patent applications, but González says that Mexico ought to be fifth or sixth in the coming 15 to 20 years. If all the proposed programs and reforms succeed, González believes Mexico can be the seventh- or eighth-largest economy in the world within the next decade (currently the country ranks 15th, according to the International Monetary Fund).
“The most important thing is that growth is not stupid or nonsensical,” he says. “It will be a sustainable growth. Mexico is a responsible country, and the idea is to continue with this responsibility.”
“We have a strong foundation of talent in Mexico. That talent means not only being smart, but also bringing an attitude of creativity and finding a way of making everything possible.”
Reinventing Mexico’s economy for success in the 21st century is not a simple task. “It’s like a baby. It takes time to be born,” explains Francisco N. González Díaz, CEO of the development bank
Bancomext. “It’s not something that you can magically transform from one day to the next.” Yet, when González looks forward, he believes the stage is set for an economic surge. Mexico has plenty of challenges ahead, but the country also has one major asset: diversity.
BREADTH AND DEPTH
Though many outsiders have a narrow view of Mexico’s economy as one focused solely on tourism and the automotive industry, the full story is much more complicated. The country has one of the most complex economies in the world. Its economic breadth is much more like the economies of the United States and China than it is the single-sector economies of many Southern Hemisphere countries. Government officials have been working hard to build on that diversity, taking strategic steps to strengthen a wide array of industries.
At the core of those efforts is one question: How can Mexico add value to each of its industries? In the automotive industry, the answer is to enhance value throughout the supply chain. Financial reforms are allowing small suppliers to have easier access to credit; for larger firms, regulatory changes are streamlining the export process.
Reform is also overhauling the nation’s sluggish energy sector. To revitalize business, Mexico assigned its development banks specific areas of focus, including renewable energy. That support will help finance wind and solar farms, which in turn will help the country achieve its national goal of obtaining 50 percent of its energy from renewable sources by 2030.
González says that Mexico is also strengthening its value proposition in logistics. The nation is upgrading traditional infrastructure, like highways, bridges, airports, and seaports. It is also bolstering its telecommunications infrastructure, with the creation of an ambitious shared public mobile network, known as Red Compartida.
Top of mind for González is Industry 4.0, the term used to describe the next era in manufacturing, which is likely to be dominated by digitalization, big data analytics, and increased
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