Omar Díaz : Interview

Interview : Omar Díaz

How might Mexico support companies looking to adapt to Industry 4.0?

OMAR DÍAZ: The automation and digitalisation of organisations – the so-called Industry 4.0 – is a recognised global phenomenon in the manufacturing industry, and although Mexico is not excluded, we have not yet made it a priority. While Japan, South Korea, Germany and the US spent over 2.5% of GDP on research and development (R&D) and innovation, according to a recent OECD study, Mexico’s expenditure is close to 0.5%. Indeed, the way companies and organisations will continue to grow and exist will be based on their ability to implement leading-edge technologies. Investing in R&D is now a matter of survival for companies worldwide, especially those in the manufacturing sector. Innovation has always been about launching new products, and those who do not keep up with this trend will be either left behind or become obsolete. Mexican industry – not just manufacturing – needs to bridge the gap quickly as they are part of the global economy. The solution to this issue relies on Mexican organisations making innovation a priority, and it will need to be government funding that kick-starts this process by increasing access to education for the population.

What particular challenges must be overcome for Mexico to become a regional reference in software development?

DÍAZ: To become a regional reference in software development, Mexico must overcome two main challenges. First, education at the high school and university level should include computer science in order to boost the availability of trained and skilled human resources, which are currently scarce. Universities are not generating enough talent to supply the local industry; therefore, there is a significant gap between private sector demands and graduates that grows wider every year. The lack of trained resources is even more acute in less developed areas, as progress and advancement in IT tend to be concentrated in cities such as Querétaro, Monterrey, Guadalajara and Mexico City.

Second, support from the government could be instrumental in providing incentives to the industry, so that Mexico will be able to compete with other regions at a lower operational cost. Furthermore, these initiatives could be combined with socially driven programmes to develop lower-income areas, attracting IT companies to set up operations together with universities in order to provide beneficial economic conditions, tax exemptions and other incentives to encourage the growth of the industry.

What are the country’s most pressing infrastructure needs for investment in order to boost demand for new technologies?

DÍAZ: In terms of technological infrastructure, one of the most important needs is the standardisation and increase of internet access throughout the entire country. Mexico has increased penetration rates greatly in the past years, to 59% in 2016, according to the Mexican Internet Association.

Nevertheless, as more individuals and businesses make use of new technologies that become available – such as cloud services, machine-to-machine communications, the internet of things, big data and analytics – the volume of digital traffic will only continue to grow exponentially.

Therefore, it is clear that the infrastructure we rely on to carry digital traffic needs to grow at the same or faster pace. Though the private sector, including communications service providers (CSPs), are investing heavily, there remains an urgent need for the government to intervene by managing the spectrum available, ensuring efficient allocation and utilisation, regulating IP interconnections among CSPs and extending coverage into rural areas.