Why has Mexico become popular among start-ups?

The companies find in the country what they want: "Good, pretty and cheap."

In Canada and the United States, the salaries of software engineers and developers do not stop rising continually.

Over three years, these countries have seen significant increases in these areas. From 2015-2017, the average annual salary in Los Angeles raised $ 11K. In the same period, Austin salaries increased $ 10K; in San Francisco, $ 9K; New York, $ 8K, and in Chicago, $ 5K.

San Francisco offers the best salaries, but workers begin to notice that not everything is honey over flakes. To maintain their lifestyle, an Austin programmer would require $ 84K more annually in San Francisco.

The competition between talent scouts has caused some companies to start turning to other latitudes. In specific, towards the south.

The pros of Mexico’s talent

Companies begin to discover the hidden talents of Mexico in the technological area. And most importantly, the low cost they represent for their operations.

Despite the outstanding points in education, Mexico is one of the countries that graduates the most engineers in the world. According to UNESCO data, in 2017 it was in eighth place, above France, and below Ukraine. Russia and the United States lead the list.

Although there is a growing battle for talent in the country and some companies double their wage offers, the average wage in Mexico has not risen as much as expected. In Mexican cities with more tech employees (Guadalajara, Monterrey and Mexico City), the average salary remains well below towns in Canada and the United States. In 2017, it was around 32K pesos per month.

The contracting climate in Mexico also remains stable despite the uncertainties caused by the NAFTA negotiations. Also, the Mexican population is still quite young. Two-thirds is below 41 years.

When doing accounts, for each worker in Silicon Valley companies can hire 4.4 workers in Mexico. And the difference in abilities is almost indistinguishable.

The complete panorama makes Mexico an attractive place for start-ups, especially those struggling to raise funds.

This situation will not remain that way forever. More and more companies are taking advantage of their competitors, and the outlook could change very soon. The pioneer companies will be the ones that will make the best use of these sales.

Mexico could be a good home for startups.