Many people might think that Mexico is only distinguished by its stunning beaches, incredible places, and delicious food; however, with a population of almost 130 million inhabitants, Mexico is ranked as the 15th largest economy in the world, the 4th biggest tech hub in Latin America, and the 8th country with most engineers graduating every year.
The following article will discuss the aspects that helped and keeps helping, shape the mentioned features of Mexico’s economy. First, Mexico is the country with more Free Trade Agreements than any other in the world.
This promotes competitiveness and productiveness while engaging Mexico in the international arena, as a strategic partner for trade. Also, the mexican FinTech law is recognized internationally for achieving a regulatory framework that promotes innovation, while guaranteeing adequate control for future risks scenarios.
These characteristics mentioned above, can be learned to promote economic growth and technological development.
Free trade Agreements- importance of developing trade relations
Free trade agreements help create a cluster of different producers, national and international, to import or export with greater ease in order to compete in the global market. The described clusters impact the Mexican industry in two different ways: first, companies need to stay updated with global trends, new products and materials, business models, and applications for the product.
Second, international competition encourages national producers to find innovative solutions to their problems in order to maintain the standard quality in their goods or services. The first creates consciousness in the national companies to compete at the same level as international companies forcing them to develop new methodologies, invest in innovation, research, and development. The former talks about how to outperform the competition on the ground tactically, how easy it is for the consumer to get the product or service? How satisfied is the consumer? Was the problem solved? Quality is not only important on the product itself, but on the experience of the consumer regarding the commodities or service.
Fin-Tech Law Regulations to promote innovation
The Fin-tech law is one of the first regulated frameworks created specifically to promote innovation, and transformation of traditional financial services, while integrating exponential technology in secure regulated spaces. One of the main purposes of the FinTech law is to promote financial inclusion aiming to converge the people that are part of the financial system and those who are not. In Mexico, 56% of the population have a financial product, 52% have a payroll account, and 36% have a saving account. The financial inclusion in Mexico is low, and FinTech law seeks to help the population left behind from the financial system, to benefit from the financial system. Naturally, innovation will always come before regulations.
The FinTech law took into consideration the innovations as part of the regulation itself. One of its principles is to encourage innovation to provide tools that increase financial services, whether integrating AI, Blockchain, Crowdfunding, Crowdsourcing or any other technology. The regulation oversees that the preservation of financial stability relies on financial, operational, technological and market risks. The efforts for regulating the field has encouraged the market to grow 50% in Mexico compared to 20% world wide. As a consequence, it positions Mexico as a leader in the FinTech field in latin America. From 2017 to 2019 FinTech apps increased their download ratio by 145% beating any traditional financial app. It is counter intuitive that regulations and laws can contribute to technological advancement, however the fin-tech law provides a regulated framework that encourages creativity and innovation.
The thriving advancement in Mexico’s regulations, frameworks and agreements stimulate the local industries to find innovative solutions for the challenges they face upon entering the globalized and technological world. Other countries should take Mexico’s example in order to foster regulations and to establish agreements with other nations to promote development and financial participation.
We are the bridge between Israeli innovation and Latin American needs
At noga we seek to bridge between the tech ecosystem in Israel and Latin American countries, to open new markets in emerging and fast growing economies.
We believe that businesses leveraged with technology and an innovation mindset will continue to develop great products and services to outperform their industries. Imagine entering a country with almost 130 million people, Mexico may sound great for vacations, imagine working along to bring your product or service to Latin America.
Give us a call, mail or text. I’m sure you will learn and enjoy along the way. Contact us at: info@nogaplus.com
About the author
Isaac Haber is noga´s Project Manager in Mexico. He is an engineer with experience in a number of different industries. Working in process reengineering, advanced analytics, operation strategies and leadership in multifunctional teams.