If you walk through the streets of Mexico City’s hipster neighbourhoods of Condesa or Roma, you are almost certain to bump into an aspiring entrepreneur. The entrepreneurial wave has hit Mexico hard and seems to be gaining momentum rapidly. A new generation of millennials and post-millennials, led by a group of entrepreneurs in their late 30s to early 50s, is starting to believe you can change the world by creating new and better solutions to everyday problems.
The phenomenon is manifesting everywhere, not just in Mexico City and not just in Mexico. Cities in Latin America, Asia, Africa and Europe that would not typically be considered innovation hubs are witnessing an entrepreneurial fever at all levels of society, government, industry and academia.
But Mexico is particularly ripe for this change. The country is macroeconomically stable and enjoys a good relationship with most nations in the world. It is second highest among 140 countries in the Happy Planet Index, a measure of human wellbeing and environmental impact devised by the UK think-tank New Economics Foundation. This, coupled with its hospitality, world-renowned food and natural beauty, makes Mexico an attractive destination for tourists and immigrants from around the globe. In the past couple of years, for the first time in its modern history, the country reversed its emigration wave, with more Mexicans leaving the US to return to their home country than arriving.
Different layers of government are injecting federal, state and local dollars into entrepreneurship and technology development via grants, loans and even direct investment into start-ups and venture capital funds, all of which are helping to spark a new culture.
Mexico is popular with the young. More than half its citizens are under 30 and the median age is 27. A growing number of university students are graduating as scientists, engineers, designers, marketers and business people. Mexico’s creative class is expanding rapidly and the new generation is full of individuals not afraid to take risks. In a stagnant job market, this is creating the ideal base for entrepreneurship.
And money is beginning to pour in. Not only are many international incubators, accelerators and funds investing in Mexico, the number of Mexican seed and venture capital funds has increased rapidly from three in 2008 to 14 in 2012 and more than 60 by last year. Family offices are dedicating part of their money to venture capital, participating as investors in emerging funds or creating their own. The number of angel investors is growing in the main metropolis, and smaller cities are spreading knowledge of the start-up market to wealthy people through seminars teaching them how to diversify away from traditional property and other risk-averse markets.
Mexico’s public image has been boosted in the last 10 years, with headlines such as “The new China”, “The Aztec Tiger”, or “Move over Brazil” appearing regularly in international media.
But not everyone is so enthusiastic, not least Mexicans themselves. Indeed, it appears that the country’s biggest hurdle is Mexico itself. Corruption and impunity are at all-time highs in the country and, culturally, Mexicans are still averse to risk, intolerant of failure (and success) and not prone to collaboration. Government institutions are not trusted and changing this perception will take a couple of generations. With crucial elections due in 2018, the short-term focus is likely to be on internal power distribution rather than moving towards a common goal.
Yet Mexico is at a pivotal stage in its history and on the brink of evolving into a knowledge-based economy.
The entrepreneurial boom should help lead the way, creating new high-value jobs, improving the distribution of wealth, generating innovation, developing competitiveness and eventually turning Mexico into a fairer and more equitable nation.
It behoves us to continue to foster it.
Marcus Dantus is chief executive of Startup Mexico, a co-working space for young companies
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