Collaborate with Mexico in the Fourth Industrial Revolution
In the new issue of Americas Quarterly, we asked people, “What would you tell the next U.S. president about Latin America?” To see other authors’ responses, click here.
Dear Mister / Madam President,
Trade and U.S.-Mexico relations have been singled out as targets in this year’s election campaign, but the rhetoric overlooks an unmistakable reality. As the next U.S. president, you will preside over the dawn of what the World Economic Forum refers to as the “Fourth Industrial Revolution,” an opportunity that could yield a $100 trillion dividend.
A vast supply of affordable energy, advances in robotics and 3D printing, the development of stronger and lighter materials, and other soft ware-driven innovations are generating manufacturing capabilities that have already increased the productivity and efficiency of North American–based manufacturing. You should take concrete steps to take advantage of these developments — in partnership with Mexico.
Why Mexico? The importance of international trade to the U.S. is evident — more than 38 million U.S. jobs depend on trade. But here’s a fact that has barely surfaced on the campaign trail: The second-largest consumer of U.S.-made goods is Mexico.
If you pursue an isolationist trade policy, both Mexico and the U.S. will suffer. Six million U.S. jobs rely on trade with Mexico alone. The country is the top export market for California, Arizona and Texas; and trade with Mexico generates over 200,000 jobs in several different states, including Illinois, Ohio, Pennsylvania and New York. U.S. imports from Mexico are made up of 40 percent U.S.-made components. Mexico-based plants, in other words, help sustain U.S. industry.
Technology will be the next major driver of North American growth. And information technology — thanks in part to the vibrant and culturally diverse Silicon Valley — touches every industry. Through big data and analytics, energy companies are discovering new oil and natural gas fields. Advances in software are steering 3D modeling. Soft ware-driven artificial intelligence is making manufacturing robots smarter each day. Cognitive computing is helping doctors identify undiscovered patterns to find new options for highly personalized treatments. And crossborder product development can yield extraordinary results, both for physical and digital products.
The 2016 Global Manufacturing Competitiveness Index published by Deloitte predicts that the U.S. will be the world’s most competitive manufacturing nation by 2020, citing talent and the adoption of advanced technologies as key competitive features.
But the index also points to the strength of regional partnerships as a contributing factor. To sustain and increase the competitiveness of both countries, you therefore need to not only reinforce a modern border that facilitates trade, but also continue efforts of U.S.-Mexico integration, including NAFTA and other binational initiatives that are currently underway.
A key area of binational collaboration should be the labor force. The U.S. tech industry employs nearly 7 million people, and employment is forecast to grow 18 percent by 2022. But where will those new workers come from? The influence of information technology, and the need for the right skills, has become so pervasive that the U.S. Bureau of Labor Statistics projected that by 2020, as many as 1 million programming jobs will be left vacant. In a July 2015 Brookings Institute event, Congressman David Cicilline (D-RI) stated: “Every manufacturing facility I’ve ever visited says, ‘I have jobs available. I can’t find people to fill the position with the skills necessary.’”
The skills needed for success in the Fourth Industrial Revolution are profoundly different. Modern factories need workers who are proficient in programming and handling sophisticated equipment. But today’s North American labor market is still attuned to the manufacturing jobs of the 1980s and 1990s.
The good news is that leaders in both countries have recognized the challenge. In 2014, the U.S.-Mexico Foundation for Science proposed a Binational Intelligent Manufacturing Initiative (BIMI), aimed at expanding training on both sides of the border to support the use of information and communication technologies in all aspects of the design process and the manufacture of advanced products. This initiative sets as a priority developing a new labor force for “intelligent manufacturing” to make the border region more competitive and attract investment.
In the February 2016 U.S.-Mexico High-Level Economic Dialogue forum, the U.S. pledged to work through BIMI to streamline IT capacities into all major elements of the manufacturing process that both countries share. You should not only honor this commitment, but find ways to expand it. Work with Mexico to reap the benefits of the next industrial revolution.
Treviño is president and CEO of Softtek. Under her leadership, Softtek has become the leading IT services company in Latin America, having earned recognition from Gartner and Forrester Research for being the only non-Indian provider to pose serious competition for the U.S. market.