A Little Help

Inadem was created in 2013. What have been your main goals in this period and what are your expectations for 2015?

One of the goals of the current government is to raise the level of support for entrepreneurs and SMEs. The establishment of Inadem is in line with those targets and takes into account the important role that entrepreneurs play in the Mexican economy. The entrepreneur is a key factor in the development of Mexico. They are innovative, resourceful, and they strengthen the economy. As for the 2015 targets, we have an entrepreneurial fund to support ideas for start-ups. With these funds we help entrepreneurs to cope with the challenges they face in the process of consolidation of the ecosystem. In addition, we are also working to boost the low productivity rates that some Mexican SMEs register in order to help them maximize their growth potential. In addition, we are also supporting certain entrepreneurial and innovative projects to help Mexican SMEs internationalize their products. These efforts could spur their competitiveness because developing businesses abroad creates more and better paid jobs, in addition to increasing productivity. The reality of the Mexican economy lies within these two economies. On the one hand, there is an economy focused on the external market. This one is highly competitive and has allowed export manufacturing to grow. On the other hand there is a second economy whereby we have low productivity and here is where Indaem comes in. We are focused on those domestic companies that have potential to grow in the domestic and external market.

What other steps have been taken by Inadem to support Mexican SMEs in addition to providing financing to entrepreneurs?

The government has taken several steps to try to achieve this. First, we have worked on creating similar working conditions for Mexican entrepreneurs as in other parts of the world. According to the OECD, Mexico is the country with the highest costs for entrepreneurs. That puts Mexicans entrepreneurs at a disadvantage against other countries. Therefore, we have sought to level the playing field, and the reforms were an important part of this. For instance, the energy reform will bring down the cost of electricity in Mexico and that will give us an advantage in competing against entrepreneurs in other countries. Inadem was founded to create contact with SMEs and the public sector. Usually these two sectors do not go hand in hand, and our aim is to increase contact between them. Through a careful assessment we have been able to deliver important advice. A major part of what Inadem does is just that; namely tutoring. We provide these entrepreneurial firms with training, management, skills, and access to finance. This gives them the tools to carry out their work. And at the end of the day, they are more professional and organized when pursuing investment capital. Training in IT technologies is another step in this process. This boosts their productivity and increases their competitiveness.

In your view, what sectors of the Mexican economy are more attractive for foreign investors to lend money to Mexican SMEs?

Definitely the greatest potential lies in the energy sector. We are opening it to foreign investment and expect many SMEs to benefit from it. Inadem conducted a state-by-state study to identify which sectors generated the strongest growth in the economy. We identified 24 sectors and among them textiles, auto, telecommunications, and aerospace also stood out. We expect significant FDI in those sectors and, in that regard, we expect Mexican SMEs to benefit the most.

How is Inadem helping to improve productivity and internationalize Mexican SMEs?

SMEs in Mexico constitute over 95% of all established companies, and are also the largest employers. The challenge for Inadem is to identify those SMEs of greatest potential for growth and plug them into supply chains through training certification processes that lead to increased productivity. Mexico needs to strengthen its domestic market, and SMEs are the way to do so. Yet, as I mentioned, going abroad is a key factor for these companies because it increases their productivity rate and makes them more competitive.

How is your partnership with organizations like Promexico encouraging entrepreneurship?

Inadem wants to support a network for entrepreneurs, and earlier this government undertook a survey of which areas required greater support. We are working with programs that improve productivity and that establish the network of public partners in the network that supports entrepreneurs. This year we have a greater collaboration with agencies that have programs such as Secretary of Labor, the Secretary of Education, and the secretary of Agriculture. This network has partners throughout the country such as Startup Mexico and Techba, and is present in over 400 locations nationwide. Some of the offices are in the delegations and the offices of some municipal governments, state governments, and educational institutions. This networks brings together people who are creative, entrepreneurial, and organizations that are also working with other entrepreneurs. We are developing our website to create a visual platform that best promotes the products of SMEs and that can deliver real advantages to them.

© The Business Year – June 2015