During 2024, the Ministry of Economy (Mineco) seeks to achieve a goal of foreign direct investment in Guatemala of 1.4 billion dollars. Of this total, 381 million dollars are expected in new investment attraction to the country to create at least 12,900 formal jobs for Guatemalans.

Business climate

The Minister of Economy, Gabriela Garcia-Quinn, highlighted that work is also being done to strengthen a favorable business climate. The objective is to support all sectors by constructing a stable and modern framework to encourage investment and competition.

The lines of collaboration established in “Guatemala no se detiene (Guatemala does not stop)” will be followed through programs that seek further digitization and simplification of the procedures required to do business in the Central American nation.

The goal is establishing Mineco as an effective, efficient, and transparent facilitator for attracting increased foreign direct investment in Guatemala. The objective is to improve the population’s well-being and quality of life.

The companies

Minister García-Quinn highlighted that 48 international companies have demonstrated their interest in investing in Guatemala, which is based on sectors such as:

Agribusiness

Guatemala’s agribusiness sector stands as a cornerstone of its economy, offering lucrative opportunities for foreign direct investment in Guatemala. Renowned for coffee, sugar, and banana exports, the sector benefits from fertile lands and a favorable climate. The government’s initiatives to support agricultural development further enhance its appeal. With a focus on sustainability and modernization, agribusiness in Guatemala presents a promising landscape for investment, driven by robust export markets and a skilled workforce. This sector contributes significantly to Guatemala’s economy and showcases the country’s potential as a leading agricultural hub in the region.

Vehicle electrical parts

Guatemala’s vehicle electric parts production sector is emerging as a promising industry within its diverse economy. With a strategic location and proximity to major trading partners like the United States and Mexico, Guatemala offers efficient access to global markets. The country’s skilled workforce and favorable business climate attract international companies seeking to invest in producing electric vehicle parts. This sector presents opportunities for growth and innovation, supported by government initiatives and a commitment to modernization. As part of Guatemala’s efforts to diversify its industrial base, vehicle electric parts production holds the potential for job creation and economic development, positioning Guatemala as a competitive player in the automotive supply chain.

Unleash Your Growth Potential:
Attract Foreign Direct Investment (FDI)

Learn how our proven strategies bring international capital to your organization. Schedule a free consultation today to discuss your unique needs and discover how we can unlock your growth potential. 

Pharmaceutical products

Guatemala’s pharmaceutical products production sector is poised for growth and investment within the country’s expanding industrial landscape. With a strategic location and access to critical markets, Guatemala offers an advantageous platform for pharmaceutical manufacturing. The sector benefits from a skilled workforce and government support, fostering an environment conducive to innovation and competitiveness. As demand for healthcare continues to rise domestically and globally, Guatemala’s pharmaceutical industry stands ready to meet these needs, contributing to economic development and job creation while ensuring access to essential medicines for the population.

Clothing and textiles

Guatemala’s clothing and textile production sector is vital to its economy and is renowned for its high-quality products and competitive advantages. Situated strategically with access to major markets, foreign direct investment in Guatemala offers an efficient platform for manufacturing and exporting textiles and garments. The sector benefits from a skilled workforce, government support, and a strong tradition of craftsmanship, ensuring product excellence and reliability. With a focus on sustainability and innovation, Guatemala’s clothing and textile industry continues to attract investment and contribute significantly to the country’s economic growth. Its global reputation for quality and reliability positions it as a critical player in the international textile market.

BPO and Contact Center

Guatemala’s BPO and contact center industry is rapidly emerging as a key player in the global outsourcing market, propelled by a skilled workforce, favorable business environment, and strategic location. With a focus on providing high-quality services in customer support, technical assistance, and back-office operations, Guatemala offers cost-effective solutions for businesses worldwide. The sector benefits from government support and investment in infrastructure and technology, enhancing its competitiveness and attracting international companies seeking outsourcing opportunities. With a commitment to excellence and innovation, Guatemala’s BPO and contact center industry are poised for continued growth, driving economic development and creating employment opportunities for its workforce.

Plan for the economy

The Ministry of Economy is developing the National Strategy to Attract Foreign Direct Investment in Guatemala. The government seeks to become a key actor in strengthening confidence in Guatemala as an attractive country for investment and foreign trade.

For this reason, Minister Garcia-Quinn asserts: “To comply with this action plan for the Guatemalan economy, we commit to working transparently, overcoming challenges, and enhancing our business opportunities in Guatemala and the world.”

Why Guatemala Should Be Your Next Investment Destination

Central America’s hidden gem, foreign direct investment in Guatemala, is rapidly emerging as an attractive option. Here’s why:

Strategic Location: Guatemala is geographically privileged and located between North and South America. It shares a border with Mexico, a major US trading partner, and has easy access to the Atlantic and Pacific Oceans. This translates to efficient shipping routes for reaching major global markets in the US, Europe, and Asia. Additionally, well-developed seaports like Puerto Quetzal on the Pacific and Santo Tomas de Castilla on the Atlantic facilitate smooth import and export operations.

Workforce Advantage:  Guatemala boasts a young, skilled, and multilingual workforce. The country has a median age of 22, with a growing population eager for employment opportunities. The government actively invests in education and vocational training programs, ensuring a steady stream of qualified personnel for various industries. Furthermore, Guatemala’s proximity to the US fosters a bilingual population, making communication and business operations seamless.

Diversified Economic Landscape: Guatemala offers a well-rounded mix, unlike economies reliant on a single industry. Agriculture remains a strong pillar, with exports like coffee, sugar, and bananas contributing significantly. The manufacturing sector is flourishing, attracting foreign investment in textiles, apparel, and automotive parts. The service industry is also on the rise, with strong growth in tourism, business process outsourcing (BPO), and IT services. This diversification offers investors a more comprehensive range of opportunities and mitigates risk by not solely relying on one sector’s performance.

Business-Friendly Climate:  The Guatemalan government actively promotes foreign investment. Investment-friendly policies like tax breaks, streamlined business registration processes, and free trade agreements with major economies make it easier for foreign companies to establish themselves. Additionally, the government offers incentives for specific sectors like tourism and manufacturing, further sweetening the deal for potential investors.

Beyond the Basics:  Guatemala offers additional advantages that enhance its attractiveness. The cost of doing business in Guatemala is lower compared to many developed nations. Furthermore, the country boasts a rich cultural heritage and stunning natural beauty, making it a desirable destination for expatriate employees.

In conclusion, foreign direct investment in Guatemala presents a compelling case, aiming to attract $1.4 billion in 2024. With a strategic location, skilled workforce, diversified economy, and supportive business climate, it offers promising opportunities across various sectors such as agribusiness, manufacturing, and services. The government’s commitment to improving the investment environment underscores its dedication to economic growth and development. As a hidden gem in Central America, Guatemala offers favorable business conditions, cultural richness, and natural beauty. Investing in Guatemala is not just a financial opportunity but is also an investment in the country’s promising future.

Don't Miss Out: Limited Spots Available for Free FDI Strategy Sessions

Foreign Direct Investment can fuel your organization's success. But competition is fierce. Secure your spot today for a free, no-obligation consultation with our FDI experts. Learn how to attract global investment and take your business to the next level.

Inter-American Dialogue reports that Chinese investment in Latin America has been recently reduced to focus on critical areas such as energy, information, and communications technologies.

Chinese investment in Latin America has been reduced in the last four years as a result of the recalibration of the priorities of the communist regime and its companies abroad, reveals an investigation by the Inter-American Dialogue think tank.

The Washington, DC-based center reports that Chinese investment in Latin America reached $14.2 billion annually between 2010 and 2019 but fell to an average of $7.7 billion from 2020 to 2021 and then to $6.4 billion in 2022.

The report cites that the Economic Commission for Latin America and the Caribbean (ECLAC) found that Chinese acquisitions of assets in Latin America in 2022 were the lowest in a decade, both in the number of projects and as a percentage of total mergers and acquisitions in the region. It placed itself behind companies from the United States, Australia, the European Union, Canada, and Chile.

However, the phenomenon is more than just regional. Professional services network EY estimated the value of total investment announced by China worldwide during 2022 at $29 billion, which represented a year-on-year drop of 52 percent.

Analysts attributed this drop to rising geopolitical tensions, related regulatory tightening, and rising global inflation, among other factors.

The refocusing of Chinese businesses

The study “New infrastructure: Emerging trends in Chinese foreign direct investment in Latin America and the Caribbean” was carried out by Inter-American Dialogue experts Margaret Myers, director of the Asia and Latin America Program, Ángel Melguiz and Yifang Wang, both of the Program Asia and Latin America.

Analysts indicate that China is now focusing on other priority areas that it describes as “new infrastructure.” For example, these industries, telecommunications, financial technology, and energy transition, are broadly related to innovation but are also a critical part of the Asian country’s economic growth strategy.

“Whether in terms of value or number of deals, Chinese Foreign Direct Investment (FDI) in these industries is on the rise, accounting for 58 percent (around $3.7 billion) of total annual Chinese FDI in the region” in 2022 and more than 60 percent of the total number of FDI deals announced by Chinese companies that year,” the report notes.

Inter-American Dialogue experts point out that, generally, the types of large-scale infrastructure projects that once characterized the Belt and Road Initiative (BRI) are no longer as emblematic within China’s foreign investment policy in Latin America and the Caribbean (LAC).

“In many parts of Latin America and the Caribbean, Chinese interest in canals, railways, and other major transport and energy infrastructure is being replaced by a growing emphasis on innovation, whether in information and communications technology (ICT), renewable energy or other emerging industries, consistent with Beijing’s laser focus on its own economic improvement and global competitiveness,” the report highlights.

The Inter-American Dialogue study warns that Chinese companies often seek more significant commitment to Latin America and the Caribbean through smaller agreements on average and in sectors that are directly aligned with Beijing’s economic growth objectives.

Chinese investment in Latin America in the energy sector

Chinese mergers and acquisitions in Latin America and the Caribbean are now limited primarily to the utility electricity generation and transmission industries.

Luz del Sur, Peru’s largest utility company, is responsible for supplying electricity to the south of Lima and surrounding areas, and it was purchased by China Yangtze Power International (Hong Kong).

In Chile, China Southern Power Grid bought a stake in the energy transmission company Transelec in 2018, and State Grid purchased the energy distributor Chilquinta Energía in 2019 and CGE in 2020.

Electric generation and transmission deals accounted for nearly 74.4 percent of total M&A transactions over the past five years and a significant amount ($16.9 billion) of the Chinese total.

China’s focus on renewable energy, an innovation-related industry, accounted for more than 6 percent of the total value of FDI announcements from Latin America and the Caribbean between 2018 and 2023.

Information and Communications Technologies

In addition, China is betting on investments in Information and Communications Technologies (ICT) in the region. Deals in this sector accounted for 40 percent of total Chinese FDI in Latin America between 2018 and the first half of 2023. However, it only represents 8 percent of the total value of Chinese investments globally.

The report details an upward trend in Chinese FDI in Latin America’s “new infrastructure” industries, with ICT, renewable energy technology, and, increasingly, electric vehicles accounting for most of these investments.

The study indicates that conditions in Latin America and the Caribbean are relatively ripe for Chinese ICT investment, including a substantial consumer base with high demand for affordable digital equipment and services.

“Whether in terms of value or number of deals, Chinese FDI in these industries is increasing and accounted for 58 percent (around $3.7 billion) of the annual total in the region in 2022 and more than 60 percent of the total number of FDI agreements announced by Chinese companies that year,” the report determines.

New investments in equipment, consumer electronics, satellites, services, and computing exist.

“As geopolitical conditions limit China’s technology investments and trade prospects in developed country markets, many of China’s manufacturing and  Information and Communications Technologies companies have sought to engage more broadly with Latin America, the Caribbean, and other parts of the Global South,” the report says.

The study concludes that China’s major technology suppliers are moving beyond equipment sales, which were the original basis of Huawei’s operations in Latin America, and are now rapidly expanding their focus to include data centers, cloud, and other services, especially in Argentina, Brazil, Chile, Colombia, Mexico, and Peru.

Focus on the biggest country

The Inter-American Dialogue study indicates that Chinese investment in Latin America continues to be overwhelmingly focused on the largest economies in the region, such as Brazil, which absorbed a large part of Chinese FDI in LAC between 2003 and 2010.

In 2022, China also bet on Brazil with 78.6 billion dollars, 42 percent of the total for Latin America.

“Chinese FDI in Brazil between 2003 and 2022 was more than double the investment in Peru, the second largest recipient of Chinese FDI during that period,” the report explains.

However, the relative importance of Brazil as a destination for Chinese investment in Latin America has decreased in the last five years in favor of Chile, Peru, and Mexico. The report notes that this reflects political tensions between China and Brazil under the Jair Bolsonaro administration but may also be due to changes in investment conditions or projects or industries of interest in other parts of LAC.

The American warning

The report recalls that the United States and some like-minded partners have warned about over-dependence on Chinese investment in Latin America and influence across the entire “digital stack” (network infrastructure, devices, applications, content, and governance), highlighting the need for interoperability and pointing to the prospect of repurposing digital technologies and infrastructure to enable the suppression of civil society.

In Latin America and the Caribbean, the United States has called for robust consumer protection frameworks to reduce the space for impunity and rights abuse, whether at the behest of state or non-state actors.

Will they give more to the region?

The report states that China is giving signs that it will penetrate further into the region. As proof of this, it cites Xi Jinping’s conversations in November 2023 with presidents Dina Boluarte of Peru, Luis Lacalle Pou of Uruguay, and Gustavo Petro of Colombia, and his April 2023 meeting with Brazilian President Luiz Inácio Lula da Silva.

Those meetings all focused on expanding the already extensive trade relations while encouraging cooperation in sectors related to innovation in these countries, including urban mobility systems in Colombia, the pharmaceutical sector in Uruguay, the digital economy, energy and mining in Peru, and 5G telephone technology in Brazil, among other areas.

According to experts, these and other countries in the region should expect a certain degree of Chinese economic commitment in the coming months and years, although mainly in sectors aligned with China’s economic improvement process, not precisely that of Latin America and the Caribbean.

In conclusion, the shifting landscape of Chinese investment in Latin America reflects a strategic recalibration towards sectors integral to China’s domestic economic agenda, such as energy, information, and communications technologies. While traditional infrastructure projects under initiatives like the Belt and Road Initiative have waned, emerging industries like renewable energy and ICT are witnessing a surge in Chinese interest. Despite geopolitical tensions and regulatory constraints, recent engagements signal a continued, albeit targeted, commitment from China to deepen economic ties with the region. As Latin American countries navigate these evolving dynamics, they anticipate a nuanced influx of Chinese investment, emphasizing alignment with China’s economic priorities alongside their development objectives in the years ahead.

The Fintech industry in Latin America has experienced exponential growth in recent years. In 2022, the sector received an investment of more than 1.6 billion dollars, 120% more than the previous year, according to a study by the Inter-American Development Bank (IDB).

The Fintech industry in Latin America has experienced exponential growth in recent years. In 2022, the sector received an investment of more than 1.6 billion dollars, 120% more than the previous year, according to a study by the Inter-American Development Bank (IDB).

This development is due to a series of factors, such as the growing adoption of technology by consumers throughout the region, the need for financial inclusion, and favorable regulation of the sector.

These are four trends that will define the Fintech industry in Latin America in 2024:

Growth of digital payments

Digital payments will continue to increase in popularity in Latin America. According to a study by the consulting firm McKinsey, the value of digital payments in the region will reach 2.5 trillion dollars in 2025. This trend is mainly due to the following variables:

• Greater penetration of smartphones
• Improvement of telecommunications infrastructure
• Growing adoption of contactless payment solutions

Development of open banking

Regarding banking, Mario Aranda, General Manager of Ionix Colombia, stated that some of his target clients are in this sector since the trend is gaining more and more strength in the Latin American territory. This initiative allows users to share their financial data with authorized third parties, such as Fintech companies, to access new financial products and services. “One of the relevant aspects of Fintech is collaboration. It is a new dimension that is not traditional in this financial world,” commented Mario Aranda, General Manager of Ionix Colombia.

The growth forecasts are very optimistic. According to the Open Banking Report Market by Finance Services and Distribution Channel by Allied Market Research, the open banking market in the world is expected to reach $43.2 billion by 2026.

Three factors that will drive its development are:

1. An increase in digital banking adoption
2. Collaboration between Fintech companies and traditional banks
3. Greater demand for inclusive financial services

The analyses indicate that new banks and the Fintech industry will adopt this initiative, leading to new innovative financial products and services.

Cryptocurrency boom

Cryptocurrencies are also gaining popularity in Latin America, as 46% of banked people in the region are willing to make payments with Bitcoin.

Cryptoasset companies are gradually evolving into comprehensive financial technology providers that act as one-stop shops for investors, consumers, and other companies.

Money transfers and payment processor services are the activities that are most carried out through payments in cryptoassets. In 2024, it is estimated that the number of users will increase considerably, as will the companies that adopt them in their financial processes.

Attention to small and medium-sized businesses

The integration of Fintech business models can offer several benefits for small and medium-sized businesses in Latin America, including:

• Technological modernization: They can help companies modernize their financial processes and systems, improving efficiency and competitiveness.
• Greater access to financial services: Fintech business models can offer electronic payment solutions, personal and business finance management, transfers, and remittances, among other services.
• Process optimization: Fintechs can help optimize financial processes, improving their efficiency and reducing costs.
• Greater flexibility: Fintech companies can offer more flexible and personalized financial solutions than those offered by traditional banks, which can better adapt to the needs of companies.

Under this context, Mario Aranda assured that Ionix is an excellent ally for small and medium-sized companies in Colombia and Latin America, with different service models and financial ecosystems that could be optimized according to each.

“Iconix’s target clients are found in banking, insurance companies, organizations in the retail sector, and, in general, entities with high transactionality and a large volume of users, where the number of transactions means that they require many aspects of security and need access to data related to reconciliation or risk measurement in open banking issues. This is where Ionix presents itself as a response to a strong growth in the population that is now immersed in the internet and the use of technologies and mobile devices,” added Mario Aranda.

It is expected that in 2024, the Fintech industry in Latin America will focus on meeting the needs of SMEs. These companies dedicated to financial solutions will launch new developments adapted to the needs of small and medium-sized businesses, such as loans, insurance, and financial management services.

Regulation, a pending issue

The regulation of Fintech in Latin America is in the process of evolution. In recent years, governments in the region have taken steps to create a regulatory framework that promotes financial innovation and protects consumers. The following factors are being taken into account:

• Consumer protection
• Promotion of innovation
• Equity

Some countries in Latin America, such as Brazil and Mexico, have enacted specific laws to regulate Fintech activities. Others, such as Colombia and Argentina, have taken a more pragmatic approach, incorporating Fintech activities into existing regulations. Furthermore, due to the sector boom, other nations are expected to join in regulating these companies.

The fintech industry in Latin America has a vital role in developing the region’s economy. In 2024, the sector is expected to continue increasing, driven by several trends, such as the growth of digital payments, the development of open banking, the rise of cryptocurrencies, and the focus on SMEs.

In conclusion, the fintech industry in Latin America is poised for continued growth and innovation in 2024 as it navigates through an evolving landscape shaped by technological advancements, regulatory developments, and shifting consumer preferences. With a focus on digital payments, open banking initiatives, the burgeoning cryptocurrency market, and tailored support for small and medium-sized enterprises, fintech companies are primed to transform the region’s financial services landscape. As governments work towards establishing comprehensive regulatory frameworks, the industry stands ready to drive financial inclusion, promote innovation, and contribute significantly to the economic development of Latin America.

During the first week of March, the President of  Spain inaugurated the Spain-Brazil Business Meeting in Sao Paulo. The gathering was attended by more than 200 representatives of  Spanish companies present in the country to acknowledge the economic and business ties between Spain and Brazil.

The President of the Spanish Government, Pedro Sánchez, defined Brazil as “a human-friendly country, a political ally, and an economic partner” during his opening speech at the Spain-Brazil Business Meeting recently held in Sao Paulo. Excellent economic and commercial relations between both countries exemplified by their deep business ties, Sánchez stressed.

Spain is the second largest investor in the world in Brazil. The president reaffirmed that it is only behind the US and is the second destination of Spanish exports to Latin America. A situation that is “no coincidence.” Sánchez said Brazil is a desirable destination for investments due to multiple factors, including the policies implemented by Lula da Silva’s government.

In this regard, President Sánchez highlighted the economic similarities between both countries: “Spain led the growth of advanced economies in 2023 with a positive rate of 2.5%, exceeding, like Brazil, all expectations.” Synergies, too, include the consideration that leadership in the energy transition and the decarbonization of the economy are crucial attractions for international investments.

“A process in which we aspire to be a global benchmark,” said Sánchez, thanks to Spain’s technological and innovation capacity and abundant sun and wind. “Clean and cheap energy is our main competitive advantage,” he asserted.

That is why the collaboration between the two countries in the field of ecological transition, the green economy, and the protection of the Amazon “represents a unique opportunity.” For this reason, there has been a call to join forces and promote renewable energy, clean technologies, and sustainable development projects.

Spain leads the most extensive civil works in progress in Latin America

The President of the Spanish Government visited the expansion works on line 6 of the Sao Paulo metro, led by the Spanish company Acciona, accompanied by its president, José Manuel Entrecanales, and the Minister of Economy, Commerce and Business, Carlos Body. It is Latin America’s most extensive civil work, demonstrating the profound economic and business ties between Spain and Brazil.

“It is fair to acknowledge the importance of this project,” said Sánchez, which is also based on a conviction shared by the governments of Spain and Brazil: the need to move towards sustainable mobility.

The Spanish president has highlighted that this project is committed to the environment and achieving gender equality. More than 750 women participate in it, who are an integral part of the project and who, for example, have manufactured 70% of the more than 60,000 segments produced for the construction of the tunnels, the president further explained.

Spanish companies have a very significant presence in Brazilian strategic sectors such as infrastructure and civil works, Sánchez explained.

In the latter, Spain stands out for being second in the ranking of the public-private partnership program of the Brazilian government, the Investments Partnership Program – with insured investments of 8.7 billion euros.

EU-Mercosur agreement and shared global interests

Spain is a fundamental investment destination for Latin American companies, the president has pointed out. Likewise, Latin America is the fourth largest investor in Spain, with a volume of more than 68 billion euros.

But the determined commitment to the profound economic and commercial relations between Spain and Brazil and the region as a whole will continue to be “incomplete” until the agreement between the EU and Mercosur is ratified, the president of the Spanish government maintains.

Spain’s commitment to such an accord is firm. An eventual agreement will create shared prosperity, although some doubt it, Sánchez said. Europe and Latin America are “strategic partners,” and an agreement between both regions will cause “profound changes in the geopolitical context.”

At the international level, the Spanish president has also reaffirmed the need to address the reform of the global financial system so that “no country has to choose between fighting poverty and fighting for the planet.”

This position coincides with the priorities and objectives of COP30, which will be held in Brazil in 2025 and aligned with the goals set for the Fourth International Conference on Financing for Development that will take place in Spain in the middle of next year.

Meeting with the Association of Spanish Scientists in Brazil

During the gathering of the two countries, Pedro Sánchez held a meeting with the Association of Spanish Scientists in Brazil (ACEBRA) at the Cervantes Institute in Sao Paulo. This meeting has served to learn first-hand about the activity carried out by Spanish scientists in Brazil and to support their research work, as well as scientific cooperation with the country.

The mission of this consortium is to promote scientific relations between Spain and Brazil, facilitating the connection between Spanish researchers who live and work in the country and Brazilians who have academic-scientific interests in Spain.

In this regard, a memorandum of understanding (MOU) has been signed between the Center for Technological Development and Innovation (CDTI) and the Research Support Foundation of the State of Sao Paulo (FAPESP), the largest and most prominent public research institution in the country. Spain is Brazil’s third leading collaborating country in the field of science. Cooperation between the two nations has increased in recent years and, after this official trip, has been reinforced with the signing of five new memoranda.

In conclusion, the recent events underscore the robustness and vitality of the economic and business ties between Spain and Brazil. From the inauguration of the Spain-Brazil Business Meeting, emphasizing mutual investment and trade relations, to the visit to significant civil works projects, showcasing collaboration in infrastructure, the narrative consistently highlights the depth of their economic partnership. Moreover, the commitment to scientific cooperation further solidifies the bond, reflecting a multifaceted relationship poised for continued growth and mutual benefit.

The aerospace industry in Mexico has been steadily climbing to new heights, becoming an integral part of the country’s manufacturing base and export economy. With aerospace clusters scattered across key regions like Baja California, Sonora, Chihuahua, Queretaro, and Nuevo Leon, Mexico has emerged as a global player in aerospace manufacturing. In this blog post, we’ll delve into the significance of the aerospace industry to Mexico’s economy, explore the clusters driving this growth, examine the educational infrastructure supporting the industry, and analyze the impact on job creation and skill development within the Mexican workforce.

The Importance of the Aerospace Industry to Mexico

The aerospace industry in Mexico has experienced remarkable growth over the past decades, driven by factors such as cost competitiveness, proximity to major markets, and a skilled workforce. According to data from the Mexican Federation of Aerospace Industries (FEMIA), the aerospace industry in Mexico has been growing at an average annual rate of 14% since 2004, outpacing the global industry growth rate.

In 2023, Mexico ranked 12th globally in aerospace manufacturing. Additionally, the country ranked as the 4^th largest exporter of aerospace products globally, with shipments overseas reaching approximately $9.4 billion. The aerospace industry in Mexico has become a crucial contributor to Mexico’s GDP, accounting for around 1% of the country’s total output. Moreover, the industry has fostered technology transfer and innovation, developing advanced manufacturing capabilities within the country.

Aerospace Clusters in Mexico

Baja California:

Baja California is home to one of Mexico’s most prominent aerospace clusters, centered around cities like Tijuana and Mexicali. This region hosts various aerospace manufacturing activities, including precision machining, composites manufacturing, and assembly. Notable companies operating in Baja California include Honeywell, Gulfstream Aerospace, and UTC Aerospace Systems.

Sonora:

Sonora has emerged as another critical aerospace hub in Mexico, with cities like Hermosillo and Guaymas attracting aerospace investment. The cluster in Sonora specializes in aerospace components manufacturing, particularly in areas such as avionics, aerospace engine components, wiring harnesses, and landing gear systems. Companies like Safran, Collins Aerospace, and Bombardier Aerospace have established a presence in Sonora.

Chihuahua:

Chihuahua boasts a robust aerospace ecosystem, with cities like Chihuahua City and Ciudad Juarez driving industry growth. The aerospace cluster in Chihuahua is known for its expertise in aerospace machining, sheet metal fabrication, and subassembly manufacturing. Major regional players include Boeing, GE Aviation, and Honeywell Aerospace.

Queretaro:

Queretaro has emerged as a dynamic aerospace cluster, attracting investment from domestic and international companies. The region specializes in aerospace engineering services, MRO (Maintenance, Repair, and Overhaul), and aircraft interior manufacturing. Companies like Airbus, Bombardier, and Safran have established operations in Queretaro.

Nuevo Leon:

Nuevo Leon is home to a growing aerospace cluster, with Monterrey serving as its focal point. The region’s aerospace activities include precision machining, tooling, and composite materials manufacturing. Leading aerospace companies in Nuevo Leon include Lockheed Martin, Spirit AeroSystems, and TechOps Mexico.

Educational Infrastructure and Workforce Development

The growth of the aerospace industry in Mexico has been supported by a robust educational infrastructure that produces skilled professionals tailored to the industry’s needs. Several universities and technical institutes offer specialized aerospace engineering programs, providing students with theoretical knowledge and hands-on experience.

One such institution is the National Aeronautics University of Queretaro (UNAQ), which offers undergraduate and graduate aerospace engineering programs and specialized training courses for industry professionals. Additionally, technical institutes like the Monterrey Institute of Technology and Higher Education (ITESM) offer aerospace manufacturing and maintenance programs.

The development of the aerospace industry in Mexico has led to the cultivation of specific skill sets within the workforce, including proficiency in precision machining, composite materials fabrication, and aircraft assembly. Moreover, collaboration between industry and academia has facilitated technology transfer and knowledge sharing, ensuring that the Mexican workforce remains competitive in the global aerospace market.

Impact on Job Creation

The aerospace industry in Mexico has been a significant driver of job creation, providing employment opportunities across various skill levels and disciplines. According to FEMIA, the aerospace sector in Mexico employs over 60,000 people directly and an additional 200,000 indirectly through its supply chain and support services.

The growth of aerospace clusters in regions like Queretaro and Nuevo Leon has created high-value jobs in engineering, research and development, and advanced manufacturing. Moreover, the industry’s expansion has spurred investment in training and skill development programs, enabling workers to pursue career advancement opportunities within the aerospace sector.

Mexico’s aerospace industry has emerged as a critical player in the global aerospace market, driven by a combination of factors including cost competitiveness, skilled workforce, and supportive government policies. The presence of aerospace clusters in regions like Baja California, Sonora, Chihuahua, Queretaro, and Nuevo Leon highlights the country’s diverse capabilities in aerospace manufacturing and engineering.

Furthermore, the educational infrastructure supporting the aerospace industry and the development of specialized skill sets within the Mexican workforce have been instrumental in sustaining industry growth and competitiveness. As the aerospace sector continues to expand, it will likely remain a cornerstone of Mexico’s manufacturing base, driving economic development and creating opportunities for its workforce.

Among Colombia’s most substantial economic regions are Bogotá, Antioquia, Valle del Cauca, Santander, and Bolívar. Colombia is the fourth most important economy in Latin America and is among the 31 most prominent in the world, according to International Monetary Fund (IMF) data.

With solid growth in the last decade, the country is only behind regional powers such as Brazil, Mexico, and Argentina in Latin America. It has a strong production sector of primary goods intended to satisfy people’s fundamental needs, such as food or clothing.

The central Colombian industries are coffee, livestock, oil, emerald extraction, floriculture, and the automotive and textile industries. Colombia is also a major exporter of gold, sapphires, and diamonds. In recent years, its provision of services has taken on relevance.

Despite being an advanced economy, the economic regions of Colombia have continued to have notable issues of imbalances in the productive data of its regions. For example, 65% of the national Gross Domestic Product (GDP) is distributed among only six departments of the 32 into which its territory is divided.

Major economic regions of Colombia

Bogota

According to local and international economic indicators, it is the most productive of the economic regions of Colombia, with a representation in the gross domestic product close to 25%.

With a solid and advanced industrial sector complemented by commerce and financial sectors, Bogotá is a highly attractive place for investments.

This area of the country represents a quarter of Colombia’s total economy. It stands out in the chemical and textile industries and the manufacture of other products, such as metals, machinery, equipment, printing, food, beverages, tobacco, and wood products.

Antioquia

Located in the northeast of the country and with the Pacific Ocean as its border, Antioquia represents 13% of Colombia’s GDP, which places it as the second most productive of the economic regions of Colombia.

Its economy is distributed among three sectors: primary, secondary, and tertiary, with strong subregions in the agricultural, manufacturing, tourism, services (which occupies a leading place), and commerce sector. Coffee is its preeminent product, with Antioquia being the leading producer in the country.

Cauca Valley

This small western region of Colombia between mountain ranges is the third most important in the country’s Gross Domestic Product.

Agriculture, fishing, and non-metallic minerals are the drivers of the local economy, which has lost preponderance in the Colombian economy despite its notable growth rates.

Santander

Located in the Andean region, it is far from its three predecessors. However, its growth data places it at the top thanks to a successful industrialization process that has taken little time to produce results.

With a strong agricultural and tourism sector, Santander has a thriving group of energy, oil, and mining companies and important metalworking and poultry projects.

This department is a significant producer of tobacco, cocoa, and cassava in Colombia, three typical products of the country’s economy.

Meta Department

Part of the Orinoquía natural region, Meta is one of the largest departments and economic regions in Colombia. This makes it an internal power. It occupies fifth place in participation of the national GDP driven by livestock, agriculture, and mining.

Among the crops cultivated in this region, rice, African palm, bananas, and corn are its main strengths, accompanied by oil and gas extraction, which has gained significant momentum in recent decades.

Cundinamarca

Located in the country’s center and with Bogotá as the capital, this region has its own economic life outside its most important city.

With a wide variety of natural resources, Cundinamarca is Colombia’s sixth most relevant region in terms of national gross domestic product.

Coal and salt, together, boost the economic indicators of the area. But also, the presence of lime, iron, sulfur, emeralds, quartz, lead, gypsum, copper, and marble deposits means that its economic competitiveness is expanding.

Furthermore, outside of the industrialization of Bogotá, this is one of the economic regions in Colombia that has rich production of coffee, corn, wheat, barley, and sugar cane.

Bolivar

Located in the northern region, abutting the Caribbean, and with Cartagena de Indias as the central city, it owes its name to the liberator Simón Bolívar.

This department has one of Colombia’s most diverse economic regions, with significant production of goods and services from different industries, placing it in seventh place in the country.

Its significant economic boost comes from providing services, especially in tourism and commerce, but it also has a thriving industrial sector.

Petrochemical companies keep Bolívar among the most important regions in the country, mainly due to the boom in oil refining, other chemical derivatives, and plastics.

Traditionally, it is one of the places where the agricultural sector had great importance. The logging industry and fishing are other prominent sectors thanks to its proximity to the Pacific.

Atlantic

Small in territorial terms but with one of the largest populations in the country, the Atlántico department is the eighth most prominent of the economic regions of Colombia.

In the capital, Barranquilla, industry and commerce, thanks to the port, are the main sectors. However, in the interior, services and agriculture drive the region.

Its most notable products are those linked to the chemical, metalworking, and pharmaceutical sectors. It also stands out in the food, beverage, and paper industry. Its significant capital is the quality and availability of its workforce, with a considerably sized economically active population.

Boyacá

It was one of the critical regions for Colombia’s independence almost three centuries ago. It was in Boyacá where the founding battles of the nation occurred with Simón Bolívar as leader.

Furthermore, Boyacá has the particularity of having different productive areas in its territory, each with its strategic goods and services. It is the ninth most important in the national GDP.

Its Industrial Corridor combines 90% of the local industry with a strong service sector. We must add a strong presence of commerce, agriculture, mining, tourism, and crafts, which are vital for this economic region.

Although more investments are required to optimize the economy, exports, agriculture, mining (with large deposits of emeralds and other stones and minerals), and livestock keep this one of the important economic regions of Colombia.

Tolima

Historically, this region’s production was linked to gold and tobacco, but slowly, the agroindustry became a prominent sector in this region.

Its strategic location, between mountains, makes it a very attractive venue for tourism, a sector from which this department generates much of its income.

Also, mining, with gold as the most prominent metal and the textile industry, makes Tolima one of Colombia’s top ten economic regions.

In conclusion, the economic regions in Colombia showcase a diverse landscape of industrial, agricultural, and service-driven economies, each contributing uniquely to the nation’s overall GDP. From the bustling metropolis of Bogotá to the rich agricultural lands of Antioquia and from the industrial hubs of Santander to the coastal commerce centers of Bolívar, these regions embody the dynamic economic tapestry of Colombia. Despite facing challenges of regional imbalances, the resilience and potential of these economic regions highlight Colombia’s position as a significant player in Latin America’s economic landscape.