MEXICO - Economy
Former Secretary of Economic Development, Jalisco State
Ernesto Sánchez Proal is an electronic engineer from ITESO, with a master’s degree in administration from Central Michigan University. He worked eight years at IBM, in Mexico and the US, in areas of manufacturing and technology development. He also worked at Jabil where he directed the operations in Mexico. He is the founder of companies in the areas of technology, energy, manufacturing, and tourism. He has participated in organizations such as Mural newspaper, Banco de México, Electrical and Electronics Engineers (IEEE), Mexico’s Electronics Manufacturing Chamber (CADELEC, A.C.), and others.
We have identified a number of strategic sectors. First, we have the advanced manufacturing sector, specifically the electronics and car industries. Approximately 60% of the state’s exports are derived from these advanced manufacturing sectors. We are home to some of the world’s leading electronics manufacturing companies, such as Foxconn and Flextronics, among others. These companies essentially build and deliver products for third parties. For example, we make storage servers for Global Cloud Services Companies and components for electric cars. In fact, 20% of every Tesla vehicle is manufactured in Jalisco. In terms of advanced electronics and automotive manufacturing, we are able to offer both leading technology and design services. We have companies such as Intel, a manufacturer of integrated circuits and microprocessors that employs over 1,000 engineers in Guadalajara. We also have Continental Automotive, one of Europe’s leading automotive part manufacturing companies that designs and develops vehicle sensors and adapters. Energy is another key area of interest for us. We are focused on securing a cost-competitive energy supply for the state. This involves a combination of renewable energies and fossil fuels. All of this is contained in our economic development policy, which includes additional cross-cutting strategies related to logistics, attracting investment, energy, and so on. The overall aim is to create employment and boost Mexico’s GDP. This should be achieved by sustainable means and via inter-state collaboration.
Our strategy has been extremely successful. In 2020, despite the pandemic, direct FDI grew by 38% with respect to 2019. In 2019, it grew by 66% YoY. We focus on industry niches, such as electric car supply chains, and specific geographical regions, such as Asia. China, for example, is of particular importance to us given its current trade tensions with the US. Besides North America, our main trading partner, China, has become a key export destination and source of foreign investment for Jalisco. We have also established trade agreements with several European countries. In 2020, we held video conferences with foreign agencies to discuss a number of economic issues, such as attracting investment and exports. We also spoke to several embassies regarding economic development issues in an attempt to improve trade relations and attract new foreign interest. These discussions brought about satisfactory results.
This was an emerging plan specifically focused on job retention and creation. However, it was also designed to attract new investment. More than MXN800 million was allocated to this initiative alone. Over MXN280 million was used to immediately safeguard jobs, while around MXN480 million was used to both create and retain long-term employment. The results were extremely positive. It is estimated that roughly 90,000 jobs were protected and created as a direct result. Jalisco now has the second-highest employment recovery rate in the country. Thanks to this plan, support for export-oriented supply chains was sustained, and liquidity was easily made available. It was a phenomenally successful initiative that was made possible thanks to private-sector collaboration.
The agri-food sector is of vital importance to us. This encompasses both the tequila industry and food production across Mexico. Jalisco alone produces over 12% of the total food consumed in Mexico. We are responsible for the secondary sector, namely food processing. Through certifications, we are able to provide access to new markets, such as China, where demand for imported food products is increasing. Food products alone account for the majority of our exports to China. This is because demand for electronics and other manufactured goods is significantly lower given their domestic production capabilities. Our strategy is geared toward foreign trade and the endorsement of local food producers. Lastly, I would like to highlight a cross-cutting strategy to turn Jalisco into Mexico’s main logistical port. We are currently in the process of building the second runway at Guadalajara airport and are working to set up a rail connection between Guadalajara and Aguascalientes.
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