Central and South America - surely the closest the USA has to China?
Dec 12, 2002
In yesterday's news we read that Flextronics will open a technology centre in Guadalajara, Mexico - This adds to considerable EMS facilities already established in Mexico and shows an ongoing commitment to the region.It is particularly interesting that the facility announced is a technology centre, rather than another manufacturing site. It shows that Flextronics, at least, are convinced that the infrastructure, services and skills are all in place to allow them to develop the more technically advanced elements of their business in Central America. Proximity to California must also be a huge pull, both in terms of the pool of skills and the location of OEM customers.In an article, Competitivity – much more than just low costs, written by our own Amanda Gronau and published on EMSnow, we read about the investments taking place in Czech Republic and the imperatives that make that investment appropriate. We have also read many articles talking about the reasons that some regions seem to succeed in attracting the right companies while other do not. India has always struck me as an interesting case in point. The country seems to have all the right elements to make it a serious competitor of China's. In fact in a recent interview, the head of the CPCA (Chinese Printed Circuit Association) told me that he was surprised that India did not compete more - it has a work force, which is well educated, skilled and excellent value. He suspected that the problems were of infrastructure and investment. He told me, as others have, that many companies quoted problems with supply of basic services such as water and power as reasons for failing to meet their objectives in India. He also suspected that the investment policy was not as long term as it is in China - developments in China are for the future and fast returns are not demanded. I also wonder if the excessive bureaucracy has played a role. Planning seems to take along time in India - a throw back to the colonial days I suspect.Certainly the words of the CzechInvest team made me feel more confident that they had the right focus - local jobs and a local supply infrastructure, with government support to attract inward investment. I wonder if Mexico can do the same. And what is beyond Mexico - the whole of Central and South America, with a huge number of potential employees and huge number of potential consumers.Clearly China is not the only game in town. But one thing is for sure - it is ahead and the Chinese are planning to keep it that way…