Mexican manufacturing, then and now
Leaders must mark the way and help integrate into groups that offer an extra boost.
Since I was a child I have known industrial sounds: the dance of machines molding parts and twisting rubber are part of my first experiences in a place that was not my home. I think about this because those of us who are dedicated to manufacturing face two important challenges: field work, which involves understanding processes, and business strategy, which is increasingly specialized.
Inegi's 2022 Economic Census says that the life expectancy of businesses is 7.8 years, although in manufacturing the average is 9.7, which is not so encouraging, knowing firsthand what this means.
To carry out a manufacturing enterprise is risky and exhausting, not only because of the lack of inputs, but also because of the lack of knowledge that exists, for example, less than 1% of these SMEs have an international certification.
This is highly critical, because with the rise of the nearshoring phenomenon, it means that their participation will be limited. Obtaining an ISO can cost up to 200,000 pesos, but its price increases during the audit, purchase of new equipment, digitalization, among a long etcetera. Adding to this is the difficulty of accessing credit. The Bank of Mexico points out that high interest rates, numerous requirements and inflexible terms are the main reasons that limit SMEs.
These types of problems are not new. More than forty years ago, when Hultek's foundations were laid, technology was scarce, machinery was not readily available and handmade processes were the norm.
Development was a trial-and-error gamble and a major financial risk.
Today, even for the big fish, to talk about robotization or automation is to touch sensitive fibers, so demanding this from SMEs is too much, considering how uneven the game is.
But now is a good time to generate development programs and strategies to ensure their livelihood. We leaders must mark the way and help them join groups that offer an extra boost.
At the end of the day, just like them, we also started out the same way: with the dream of entrepreneurship.