Networked Economy
ICT Employment Opportunities: (Stage 3)
The 2004 unemployment rate of just over 3%, gives Mexico one of the lowest unemployment rates in the world. There is significant controversy of this rate in many arenas, as Mexico’s rate is comparatively understated due to the fact they categorize any citizen who works one hour a week, as employed. Taking into account these underemployed citizens it is estimated the true rate of unemployment is closer to 25%.
In 2002, the ICT sector contributed $6.3 billion to the GDP or 3.7% of total output as compared to the U.S. and Canada, whose ICT sector contributed 7.9% and 5.5%, respectively. Composition of employment in the ICT sector for 2002 indicates that manufacturing of computers represents 76% of total ICT manufacturing, with a trend in growth to the ICT service industries.
‘In 2002 the Mexican Ministry of Economy developed the "Program for the Competitiveness of the Electronics and High-Tech Industry." According to Technology Forecasters, a supply chain and EMS market research firm, the goals Mexico is trying to achieve by 2010 include the following:
‘ "The amount of investment taking place is amazing," says Mariana Vía Urista, an analyst at Technology Forecasters, who recently completed an analysis of the Mexican industry. "These EMS companies and OEMs are all planning to expand capacity in Mexico, because they are operating near saturation." Vía Urista says total electronics production grew from $36.7 billion in 2003 to $43.5 billion in 2005. Automotive electronics accounts for about one third of the total, and the combination of cell phone and wireless infrastructure is second.’5.1 (pg. 1)
Business to Consumer (B2C) Electronic Commerce: (Stage 2)
Business to Consumer e-commerce is predominantly driven by the e-Mexico project since it provides the forum and infrastructure for private businesses as well as Digital Data Centers that allow prospective consumers to access the internet. Currently a 20-25% rate of internet access by the Mexican population hinders the growth of B2C commerce. Although the number of businesses that have websites, post key information and commerce transactions are growing, internet access and consumer’s trust in internet transactions must increase in order for this sector to move to Stage 3. As an example, in October 2005, the music market was set to launch tarabu.com, Mexico’s second download music store. ‘Tarabu is staking claim to become the most comprehensive digital store in all of Latin America.’ 5.2 As of summer 2007 the site has yet to be launched.
Similarly, a 2001 InfoAmericas, Inc. report indicates that only 11% of the Mexican population has a credit card. This stems from debt-ridden financial institutions reluctance to grant credit to consumers with little collateral. Since this issue affects several Latin American countries a number of solutions have been proposed: the expansion of smart-card money – programmable chips that can hold any quantity of currency similar to prepaid phone cards or bank account passwords that directly access the consumer’s bank account via a debit card. Other barriers to B2C commerce include high transportation or delivery charges due to Mexico’s limited distribution infrastructure.
Business to Business (B2B) Electronic Commerce: (Stage 2)
In 2002, major investors entered the Business-to-Business market in Brazil. PHC (Puntocom Holdings), an e-business solutions management company, held interest in an Internet business organized to operate in Latin America. The holding, which already includes development centers and three B2B portals in Mexico, US and Argentina launched a consultation company called Alterbrain, which is no longer in existence. Similarly, a group of Mexican and Brazilian industrial leaders are joining forces to launch a B2B procurement venture covering all of Latin America, in an ‘effort to tap into the region’s potential $700 billion B2B market for industrial goods.’5.3 The Mexican chemical industry association, Aniq (Mexico City) has formed an alliance with latinB2B.com, an Internet exchange that targets the chemical, steel, pharmaceutical, and textile industries in Latin America. The site operates in English, Spanish, and Portuguese and allows companies to buy or sell through forward and reverse auctions. Likewise, ‘Commerce One has signed a major deal with Grupo Financiero Banamex-Accival (Banacci), Mexico's main financial group, calling on the two firms to create a business-to-business (b2b) e-commerce joint venture in Mexico’5.4. As the first of its type in South America, the joint venture plans to link buyers and sellers throughout Latin America using a Web portal system. The development of additional portals are projected in other Latin American countries beginning with Argentina, Brazil and Chile. Mexico’s leading internet banking business Banacci, whose portal includes retail and investment banking to insurance and telecommunication service companies, will have a controlling interest in the venture. In the travel services industry, Mexico Boutique Hotels (MBH) enhanced their reservations and information service to include voice reservations, instant online confirmation, and access to airline reservations systems to complement its existing online reservation system. Along with the upgrade to service its customers, its member hotels are being integrated on an individual basis – this included 35 properties in 22 destinations throughout Mexico. Although a move to online business dealings is appearing, Mexico’s involvement tends to be limited to agreements between businesses with other countries versus internal networked business models.
E-Government: (Stage 4)
The Mexican government recognizes the need to collaborate with business, policy makers and project managers in order to ‘offer integrated services to citizens, achieving true administrative reform and better government.’ 5.5 (pg. 2) Mexican leaders have worked to build collaborative government initiatives since the introduction of e-Mexico in 2001. e-Mexico is a project that encompassed the Ministries of Communications and Transportation, Public Administration, Health, Economy and Education along with private sector organizations, public agencies and nonprofits in an effort to provide better public services and connectivity infrastructure to support access to governmental services. Challenges included lack of both ‘technical and human infrastructures, the lack of an institutional environment and the lack of relevant content in a local language to create significant social impact.’ 5.5 (pg. 2) The success of this initiative is indicative in the fact that the project reached 95% of its initial objectives and by December 2006 the e-Mexico portal contained more that 19,000 Web pages with the average number of monthly hits reaching 3 million. E-Mexico has had a significant impact on Internet penetration throughout the country. Approximately 25% of current Internet users participate in the digital age as a direct result of the e-Mexico program. ‘Moreover, several e-Government projects in Mexico have earned international awards because of their innovative approaches and quality.’ 5.5 (pg. 8) E-Government content in e-Mexico gives the public access to about 1900 federal government services that can be carried out electronically as well as an electronic marketplace that facilitates electronic commerce for small and medium businesses.
Recent benefits that have emerged from this collaborative program are project ‘identification and management techniques created by the e-Mexico Coordination team and INFOTEC’ 5.5 (pg. 13) (a public center for innovation), have inadvertently produced a strategy to develop and test Web portals and other systems in order to certify and standardize the content process.