Guadalajara: The Engineering Hub
Forty years before anyone had heard the word “startup,” back when Silicon Valley itself was still in its early stages, Hewlett-Packard became the first in a long line of major US tech companies to set up an operation in Guadalajara.
General Electric, IBM, Intel, Oracle, and Kodak have all followed suit since, leading an influx of direct foreign investment that, starting in the 1990s, has transformed Guadalajara into one of the leading tech manufacturing and service centers in the world.
This process has snowballed, bolstering Guadalajara’s deserved reputation for putting out some of the best engineers in Mexico. With a three-year, $177M investment into a new research and development facility, Intel is leading a trend of companies looking to Guadalajara.
The local economy is still oriented toward fulfilling the needs of these big foreign investors rather than leveraging the city’s logistical advantages and favorable labor market for its own purposes, but currently the government is working on changing that.
As part of an attempt to set Guadalajara apart as its most specialized tech hub, the Mexican government is investing millions in a new downtown tech district for the country’s second biggest city. Ongoing construction in the Ciudad Creativa Digital is budgeted at almost $20M this year, according to government figures. Once finished, the district will feature co-working spaces, development and research labs, and other facilities oriented toward bringing Jalisco’s growing community together.
Already, there are encouraging signs that the city is heading in the right direction. The city is “light years away difference from what we had 3 years ago,” Ruy Cervantes, a University of California Irvine PHD who wrote his doctorate on the history of the Mexican innovation ecology, told me.
Whereas in 2011, there was just one venture capital firm in the city, with little more than a nominal interest in tech investments, today Guadalajara now boasts four sizable firms investing in the tech sector.
Cervantes, who has since signed on to lead the state of Jalisco’s Center for Innovation and Economic Development (CIADE), estimates there are around 26 communities throughout Jalisco, with 3,000-5,000 participants, depending on how you measure participation. As many as 10 startups have reached A or B funding rounds. One hundred more, he said, are transitioning through earlier stages.
Originally founded by Cervantes himself, HackerGarage, the first co-working space in the Guadalajara metropolitan area, is still an important site. Reto Zapopan, a government-funded promotional agency and accelerator, has regular incoming startup batches and an annual events calendar that draws international attention.
Mak Gutierrez, the general director of Hackers & Founders’ local group, is another figure who has helped shaped the Guadalajara scene, along with Rodrigo Ramirez, the general director of Gain, an angel investor network, and Andy Keiffer, who created the Agave Lab development agency.
Like Monterrey, Guadalajara boasts an excellent engineering school in the Universidad de Guadalajara. Cervantes hopes that with the right encouragement, today’s engineering students will emerge from Guadalajara’s manufacturing sector as tomorrow’s internet of things innovators.
“We need more specialized entrepreneurs, because many of the things I’ve seen that startups are creating are very general–e-commerce, etc–so I think as a region we need to find a real niche, and Internet of Things could really be that.”