All on the same frequency to take advantage of relocation

Given the arrival of companies to Mexico through relocation or nearshoring, Academia, industry and the government have managed to be on the same frequency to collaborate together on an industrial policy that defines the future of the country in this matter, said Raúl Gutiérrez Muguerza, president of the board of Grupo Deacero.

He stressed that Mexico has had 40 years of mediocre growth; Therefore, the national dynamic must change before the next review of the Trade Agreement between Mexico, the United States and Canada (T-MEC).

For his part, José Antonio Romero Tellaeche, director of the Center for Economic Research and Teaching (CIDE), explained that industrial policy should not be limited to attracting foreign investment, but rather develop guidelines that allow innovation and technological transfer that are not achieved with the previous North American Free Trade Agreement (NAFTA).

That, he said, was one of the reasons why Grupo Deacero and CIDE promote the 2024 Industrial Thinking Award, with which they seek to get students, academics and professionals to contribute research projects, proposals and analysis to accelerate industrial development.

After presenting the award, the rules of which were published on the site web of CIDE, the director of the educational institute highlighted that the 2024 Industrial Thinking award “will awaken interest in industrial policy. Before it was the invisible hand of neoliberalism that generated everything; Now it is: ‘We must plan development.’ Even those who don’t win are going to compete with projects of this type on how to plan to be more efficient, and that is already a win, because it is a topic that is forgotten. “It will be to raise awareness that industrial policy can be the path to the development of Mexico.”

Towards a new industrial policy

In an interview, Gutiérrez Muguerza pointed out that greater national content is required not only in technology transfer and maquiladora inputs, but also in public works, both federal and state.

He stressed that there is now an important body of knowledge among businessmen, educational institutes and the current federal government to implement a new policy on this matter.

Currently, both academia, industry and government are on the same frequency, and this despite the fact that many trials were previously carried out. There is a tremendous wealth of analysis and studies; It is the basis that our government needs to jointly analyze with these three actors the potential it has to implement an industrial policy in the country.indicated Gutiérrez Muguerza.

He warned that if a joint industrial policy is not built, with paths to innovation in that sector, the model applied in Mexico with NAFTA will be repeated, with which companies arrived in the country, but without this translating into growth for the national economy.

I definitely believe that if it is not done this way, if we want to continue doing the same thing, we will continue to have mediocre growth. Yes we are going to have growth, there is potential; The thing is to discover how to get the most out of that potential. This is the topic. In the last 40 years, Gutiérrez Muguerza insisted, there was growth, but it was not enough.

Romero Tellaeche explained that Mexican companies have not been able to access greater technological transfer than those that have arrived from abroad, because they generally have their innovation centers in their countries of origin, there they have their designs and that is where they develop their supply chains. So, it is very difficult for Mexican companies to get into these supply chains because they were planned outside the country..

After citing Grupo Deacero as an example, he said he was in favor of creating national companies that generate chains within the country.

But if industrial policy consists of nothing more than bringing in foreign investments, then it is the same thing that happened with NAFTA; there is no innovationhe warned.

As part of this new industrial policy, Gutiérrez Muguerza called for an analysis of the amount of taxes paid by transnational companies that have arrived in Mexico, as well as the concessions that have been given to them, since many of them are laughable, and check if they are really adding value, apart from people’s salaries, if they really add value to the Mexican economy.

Instead, he proposed that the basis should be to create a model that generates a level playing field for Mexican companies and at the same time encourages the arrival of foreign investment.

First we need a floor that is even with the exterior and interior. There are economies like China and Asia in general that subsidize products, enter at ridiculous prices, often below the cost of our raw materials, to enter, conquer markets and develop their manufacturing industries in other countries. On the other hand, the internal level playing field has a lot to do with informality.. He clarified that this problem is not limited to street commerce, but includes many companies.

Additionally, he considered that the path that the national industry must take is that of environmental sustainability. He stated that Grupo Deacero has managed to generate carbon dioxide emissions below the world average, as well as being pioneers in recycling.

Another goal that the country should consider, he considered, is to substitute imports. Given the trade deficit of 110 billion dollars, changing at least part with regional production would generate a growth in gross domestic product of at least one point, he added.

In turn, the director of CIDE pointed out that the innovation process cannot be achieved overnight. In the case of the Asian market, it was achieved after decades of imitating production chains from other parts of the world. This requires a phase cumulative that industry, universities and government cannot achieve separately.

For this, he said, the intellectual heritage of the Institute for Industrial Development and Economic Growth (IDIC), donated to CIDE, will be crucial. It is the result of nearly 10 years of IDIC research, where there is a series of volumes with many contributions from people from many parts of the world who give their vision on this, and which can be a starting point to refine and concretize those ideas.

This collection is grouped in 15 books prepared by some 150 academics from more than 40 national and foreign universities who participated for 11 consecutive years with essays and thirty discussion forums. The documents present proposals for the industrial sector and can be consulted by students, researchers and academics. Later they will be disseminated in electronic version, Gutiérrez Muguerza said.