Geography sometimes is not important, but when talking about tech hubs like Silicon Valley and San Francisco it is very much so. A region that has created companies like Apple, Google, Uber, SAP, etc. Is under fire given that their resources for talent mostly comes from foreign countries these smart foreigners today are being seen simply as “immigrants” and will be limited to enter the United States given restrictions from the Trump-Republican Administration.
This week’s news, posted on The Guardian: “almost 100 US technology companies have filed a legal brief opposing President Trump’s ban on migration from seven Muslim-majority countries, arguing that it imposes significant burdens on the industry by preventing it from hiring talented migrants.” Litigations, court hearings and other legal frameworks will establish a solution or problem to the future of immigrant talent.
A medium-short term solution is to set a hold period in Mexico for immigrant employees or potential employees, creating an immigrant tech safe-haven right across the border in Tijuana.
The North American Free Trade Agreement (NAFTA), which established the playbook for this economic relationship, has also put to scrutiny by the Republican Administration and both Mexico and the US are proposing to remake the deal. Creating skepticism mostly in the manufacturing and consumer goods industry.
In 1994, when the North American Free Trade Agreement (NAFTA) came into effect, it was widely expected it would become the key for Mexico to finally join leading economies into the 21st century. The agreement pushed border cities like Tijuana to evolve to an economy driven by manufacturing. Companies like Samsung, Panasonic, Sony and others opened massive assembly plants.
After an initial post-NAFTA manufacturing boom, however, Tijuana (and Mexico) entered a period of economic decline. The hope was that NAFTA would reduce income disparities between the United States and Mexico, but after 10 years of the agreement, the gap had grown by 10.6%, according to an article by Joseph Stiglitz in The New York Times article The Broken Promise of Nafta. The gap grew even wider over the second decade.
The general perception is that NAFTA didn’t deliver on its promise, and that Mexico needs an industry shift to move forward and the city of Tijuana offers one potential avenue for economic growth, through a 21st century approach to North American free trade.
Today Tijuana is once again of interest to US investors and companies. Many have already pioneered the use of the “Tijuana Connection”, taking advantage of the city’s proximity to the US, access to talent and access to the Latin America market. Examples include 3DRobotics, a drone company; Saint Technologies, a content filtering technology company; Busca Corp, one of the top digital media firms in Latin America; and Uber, that set its second Mexican operation in Tijuana.
Tijuana also offers access to the Latin American market, where middle class consumption in the region grew by 73 million (according to World Bank)
The city is California’s natural gateway into Latin America, with real profit potential for both sides. California is considered the 9th largest economy, amounting to 2.422 trillion last year – an economy mainly fueled through technology companies like SAP, Intel, Apple, Google, Qualcomm and others. Bloomberg also valued the Tijuana-San Diego connection at $230 billion and a potential labour force of over 3 million people.
Knowing that the dominant industries of California are technology and innovation, we need to use the Tijuana Connection to encourage transactions and to rebrand this region into a technology hub for immigrants and refugees in the sector.
How the strategy should work is by doing the following:
1. US immigrants can use a 6 month immigration permit. This permit can extend into a second term for Temporary Residents.
2. By being close to the border tech employees can attend immigration appointments.
3. Also tech employees would be under the same timezone of California, which gives them accessibility to market needs.
4. In person meetings can also be encouraged by plane trips using the new Cross Border Xpress Tijuana-San Diego airport.
On the ground implementation for this cross-border live-work environment would require:
1. Campus style workplaces
2. Coworking spaces
3. Mixed-use living units
4. Tech enabled buildings under US standards of quality and security
5. Talent resources for access to more talent pools
In the near term, we can help change the regional economy by generating more Tijuana-California success stories through talent and leveraging the strategic geography. These successes should become examples of an ideal US-Mexico partnership.
By using Tijuana’s and California’s cross-border region as a technology hub for immigrants working at Californian companies, it then becomes possible to link the rest of Mexico to the United States for a much greater tangible impact.
I believe that through this model the renegotiation of NAFTA will not even be necessary, what will be necessary is a strategic approach to the needs and wants of the California technology industry as a driving factor for economic growth and collaboration between nations.
