Rising uptake of higher education provides a ready workforce in Hidalgo

Indicators suggest that Hidalgo’s education system has been sharply improving for several years. The percentage of 19 to 25 year olds in Hidalgo who are in, or have completed, higher education has risen from 5% in 1995 to 33% in 2015. But much of this investment in education often leaks out of the state because economic activity has not grown at the same rate as higher education coverage. This has created “an important imbalance between the number of university graduates and the productive sector’s capacity to absorb these young people”, according to the state’s development plan.

Stemming Emigration

In other words, Hidalgo’s challenge when it comes to human capital is not just educating the population, but retaining its most qualified people as Hidalguenses have become economic migrants to other states in Mexico. This is one reason why the Secretariat of Economic Development (Secretaría de Desarrollo Económico, SEDECO) has aimed its economic policy specifically at job creation. According to José Luis Romo Cruz, state secretary of economic development, several thousand more students are graduating from higher education institutions every year in Hidalgo than the number of jobs being created. “The MXN10bn ($540.4m) investment target [during this administration] is not random,” Romo told OBG. “It’s what will allow us to create those 10,000 jobs; at the moment those students are going to Mexico City, Querétaro and other states.”

Ready to Deploy

The mismatch between graduates and job creation highlights the scale of the problem. According to the Council of Science, Technology and Innovation of Hidalgo, 16,133 students graduated from higher education institutions in 2016, versus 8544 new jobs.

The council’s director, Alonso Huerta, indicated that this dynamic was a double-edged sword. “Of course it is a good thing to create such well-prepared human capital, and this allows companies investing in Hidalgo the chance to hire highly skilled workers in competitive conditions,” he told OBG. But at the same it is a challenge as many young people are either emigrating or only finding work below their profiles. “This creates a social challenge,” Huerta added, noting that just 1709 of those newly created jobs were professional positions.

According to the state’s Secretariat of Education development plan, at the start of the administration’s term 34% of young people and adults had the necessary competencies to access “decent employment” and entrepreneurship, but only 40% of young professionals had a job related to their university degree.

This may contribute to one key advantage for investors in Hidalgo’s labour market. According to Romo, the staff turnover rate in the state is just 3%. A survey of aerospace and automotive companies by Catch Consulting put the rate in other industrial states far higher. In Coahuila it was 8.86% in the second half of 2017, in San Luis Potosí it reached 7.06%, in Puebla it was 6.94% and in Guanajuato, 5.73%.

Available human capital was an attractive factor for Grupo Modelo when it decided to build its largest brewery in Apan, Hidalgo. Construction of the brewery will require 3500 jobs during the construction phase and 1200 jobs once in operation. In Apan and the surrounding municipalities, there is an economically active population of 52,219, of which 4802 are unemployed. This provides an “immediate labour force”, stated SEDECO.

Education Growth

After the rapid growth in the education sector in the last 20 years, there are now 106 higher education institutions in Hidalgo, with over 102,000 students enrolled. Among these are some of the highest-quality institutions in Mexico.

Both the Monterrey Institute of Technology and Higher Education and the National Polytechnic Institute – the second- and fourth-ranked universities nationally, according to the QS World University Rankings – have campuses in Pachuca. The former is also ranked the fourth-best university in Latin America by the UK firm. Times Higher Education, meanwhile, stated that the Autonomous State University of Hidalgo, the state’s oldest and largest tertiary institution, is “known as one of the best universities in Ibero-America and Latin America”, highlighting it for postgraduate studies.

Around 70% of the students enrolled on higher technical or bachelor’s degree programmes study engineering, manufacturing and construction, or social sciences, administration and legal studies.

Finding a Vocation

Another major change that has accompanied the growth in higher education in Hidalgo is that universities are no longer solely concentrated in Pachuca, but spread across the state in accordance with the industrial development being targeted in each respective area. “In most cases the courses offered by universities are aligned with their local economic vocation,” Huerta told OBG.

For example, the Technological Mining University of Zimapán is located in the north-western municipality of Zimapán, which is home to important mining activity. The university opened in September 2013 with 58 students, and now has enrolment of 405 learners. Elsewhere, near the refinery in Tula de Allende is the Polytechnic University of Energy, which opened in December 2014. The institution now has a student body numbering 500.

Through both SEDECO and the Secretariat of Education, a major component of the state’s strategy is to continue to improve not just the quality, but also the relevance, of the higher education system – as well as increase links with the productive sector.

One key to this is the Mi Primer Empleo, Mi Primer Sueldo (My First Job, My First Salary) programme that the administration of state governor, Omar Fayad Meneses, launched in 2017, offering recent graduates paid, six-month internships in the private sector.

SEDECO stressed that the programme will help young people find work at Grupo Modelo’s new brewery. “New investors are arriving and looking for a new labour force,” Fayad told OBG. “We are taking recent graduates with the best grades, placing them with the new companies and paying their salary for six months. We know that when they perform well the company will employ them, so we are matchmaking.”

Private Sector Drive

Companies including Giant Motors, logistics company Frialsa and Hutchison Ports, which all have operations in the state, told OBG that they already have arrangements with educational institutions near their business locations.

“We are beginning to see a virtuous cycle between educational institutions and companies,” Miguel Yáñez, general manager of the Intermodal Logistics Terminal of Hidalgo (TILH), told OBG.

Other private sector players are going further. Local conglomerate Grupo UNNE, which runs the TILH alongside Hutchison Ports, partnered with state agency Hidalgo Institute for Work Training to launch a school training cargo-vehicle drivers in Atitalaquia.

Grupo Modelo, which has a policy of hiring locals, is allying itself with universities and technical centres to promote talent development for agro-industry. This involves training professionals in areas including business administration, accounting, planning and regional development, international trade, sustainable agricultural innovation, food and drink, gastronomy, industrial productivity and quality control.

New Frontier

As well as developing local training programmes, several universities are also taking advantage of foreign expertise by sending students on exchange programmes. Partnerships with Asian universities are increasingly sought after as the state works to expand its trade ties. Chinese car giant JAC Motors is to open its first plant in Mexico in Hidalgo, in collaboration with Giant Motors.

Autonomous State University of Hidalgo renewed its study abroad arrangement with Jeju National University in South Korea in January 2018.

“Being bilingual is very important and it’s not just about English,” Fayad told OBG. “We want to diversify and if we want to interact with Asia our young people will need to have knowledge of the languages so that they can be actors in this process.”

Digital Opportunity

The expansion of educational opportunities is not limited to young people preparing to enter the workforce for the first time. The state is also keen to ensure that Hidalguenses who are in work can access higher education.

With this in mind, the current administration founded the Hidalgo State Digital University, which will offer remote learning via nearly 230 access centres across the state. Importantly, courses will be free for indigenous people as well as those from the poorest backgrounds, while other students with top marks will have access to 70% grants. The university offers undergraduate degrees in alternative tourism, software engineering, business and project management, and a master’s degree in science teaching.