Without a doubt, small and medium-sized companies are one of the most important sectors of any country's economy. Mexico does not escape this reality and the development of SMEs is a priority for local governments and especially for the federal government. Aaron Rodriguez, an expert in international business, provides some reasons to understand why it makes sense to start a business in Mexico.
According to several studies conducted by the expert, there are more than 4 million SMEs in Mexico, which represent 99.8% of companies in all of Mexico. Of these, 95.4% are micro companies, 3.6% are small companies, and only 0.8% are medium-sized companies.
These SMEs generate 52% of the Gross Domestic Product, and additionally contribute 72% of the jobs in the country. However, successful entrepreneurship in Mexico is not an easy task and constitutes a great challenge for the entrepreneur. It is a reality that in Mexico only 67% of SMEs survive the first year. In addition to this, the life expectancy of an SME in this country is 7.7 years.
“Given the importance that this sector has in the Mexican economy, the national government maintains stimulus programs for entrepreneurship,” Rodriguez asserts. “In this sense, according to the Organization for Economic Cooperation and Development (OECD), Mexico is the second-best country for entrepreneurship.”
On the other hand, according to figures provided by the National Institute of Entrepreneurship, every month some 35,000 businesses are opened in Mexico. This growth is based on changes in government policies, through support programs. Likewise, the participation of banks and investment funds and the increase in digitalization have also had an influence.
The Federal and local governments have programs to encourage the creation of new companies. According to figures offered by the National Entrepreneur Institute, it is estimated that the National Entrepreneur Fund will manage about 2,630 million pesos, this year.
It is worth mentioning that the recent reform to the General Law of Mercantile Companies allows one to open a company digitally through the Tuempresa.gob.mx page in less than an hour. This leads to an estimated saving of 20,000 pesos and six days of paperwork.
Another good reason is digital connectivity. According to Rodriguez, Mexico currently offers great advantages for entrepreneurship. In this sense, digitalization will be paramount when it comes to making the decision to become an entrepreneur. In Mexico, there are currently an estimated 107 million smartphones. Added to this is the legacy of the 5G network, which will influence better connectivity.
“Likewise, there are numerous organizations in Mexico that promote and help entrepreneurship,” Rodriguez assures. “Among these are the digital business building platforms Company Builders. These have specialized teams in finance, marketing and other areas to advise startups.”
Availability of resources for new investments. According to data from the Mexican Private Equity Association, they currently have more than $20 billion for financing new or growing companies.
Communications infrastructure is one of the other reasons Rodriguez shares. It is a fact that Mexico has a road network that allows the interconnection by land of the different regions. It is also easy to interconnect by air and sea, as it has airports and ports where international airlines and shipping lines have a base.
Indeed, the Mexican government has trade agreements with different countries. Among them is the T-MEC, or treaty between Mexico, the US and Canada, in which SMEs are given preponderance. This is especially true in the areas of plastic injection molding, agri-food and metal-mechanics.
“The needs in areas such as health and education represent a great opportunity for new entrepreneurs,” Rodriguez points out. “In this sense, ventures based on the innovation of solutions to meet these needed areas are a necessity.”
According to the Global Entrepreneurship Monitor GEM, Mexico has the second-best environment in Latin America for entrepreneurship. According to this organization, Mexico ranks 23rd out of 54 countries considered. And finally, there is training. According to the World Economic Forum, Mexico ranks 63rd in terms of technology adaptation. In this sense, it has been one of the countries with the highest growth in this sector.
About Aaron Rodriguez
Aaron Rodriguez is an expert eCommerce consultant in Latin America. He helps businesses throughout the region optimize all of their eCommerce operations to increase sales and retain customers, and also has extensive experience in the development of strategic and external alliances to promote departmental and organizational objectives. He has traveled extensively throughout Latin America to assist a number of companies and, when he's not traveling, he dedicates all of his available time to his wife and children.
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