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USTAR TRAVEL DIARY: GOVERNOR’S TRADE MISSION TO MEXICO APRIL 9 – 14, 2018

Andrew Sweeney, Ph.D., recently returned from the governor’s trade mission to Mexico. Representing USTAR, he focused on assisting Utah technology companies explore new opportunities. Here is his day-by-day account:

Day One: An Introduction to Mexico

Left to Right – Nick Moller (Niivatech), Governor Herbert, Janos Opra (Optisys)

The trade mission delegation dined together for the first time. Governor Herbert came to our table and reminded us to enjoy our meal because “tomorrow, we get to work.” At the time of writing, it is 11:03 p.m. and this is the first free moment I’ve found to reflect on our busy day since it began early this morning.

The Utah Science Technology and Research Initiative (USTAR) has come to Mexico with three main goals:

  1. Help Utah science and technology startup companies attract investment
  2. Exchange best practices with similar organizations, and
  3. Promote Utah as the premier soft landing site into the U.S. for foreign tech startups

To achieve the first goal, USTAR organized a pitch event (think Shark Tank) to showcase the companies and seek funding from a group of investors. The presenters were Niivatech, Optisys, Task Easy, and Innosys. Niivatech and Optisys are both alumni of USTAR’s Technology Acceleration Program (TAP).

To achieve the second goal of exchanging best practices, I met with Diana Arrieta who is the Head of Business Development of Wayra Mexico. Wayra, the innovation arm of two major telecommunications companies in Mexico, offers incubator and accelerator programs to promising tech startups. Diana was interested to learn about the USTAR companies that have joined us on the trade mission and will be joining us at the pitch event.

Great progress was made towards our third goal by meeting with Juan Manuel Romero who is the Vice President for Innovation and Technology at the National Autonomous University of Mexico (UNAM). UNAM is Mexico’s largest University with over 90,000 students enrolled each year, 134 libraries with over three million titles, six books published each day, 25 museums, three nobel laureates and a central campus in Mexico City that was named a UNESCO World Heritage Site. I’d be remiss not to give a quick shout out to my fellow chemistry Ph.D., Mario Molina of UNAM, who received a Nobel Prize in Chemistry in 1995.

Juan and his team walked me through the university’s push to create and accelerate new technologies. UNAM, like the University of Utah, is a node for the NSF I-Corps program, which helps university faculty discover what customers want and how to build technology to serve those wants. UNAM also houses the entity that monitors all geohazards in the country and Juan and his team were excited to learn about Niivatech’s radar technology for natural hazard detection.

The day ended with a reception at the U.S. Deputy Chief of Mission’s Residence, where after engaging with both Mexican and Utah businesses, the Governor promoted Utah as a premier global destination for business.

Nick Moller with Niivatech presenting at the USTAR pitch event

Day Two: Startup Culture, the Pitch Event, and a Surprise Invitation

The day started with a delegation visit to Startup Mexico (SUM). Our tour guides, Mario and Bjorn, walked us through a three-story, 40,000 square-foot campus ingeniously designed to maximize entrepreneurial spirit and productivity. SUM’s goal is simple, create an innovation ecosystem in Mexico

Like USTAR, SUM is government funded and takes no equity in the companies it supports, with the philosophy that there are enough barriers on the road to entrepreneurialism without the additional burden of losing equity at the first step. Their model has paid off. In three years, SUM has graduated 221 companies that have generated 800 jobs and have attracted $6M dollars of investment.

The delegation returned to a hotel conference room where we were joined by members of the Mexican business, government, academic, and investment communities for the USTAR pitch event. The companies presenting were Utah technology startups Optisys, InnoSys, Niivatech, and Task Easy. Each company was given five minutes to explain the technology, need it served, business model, market, competitive advantage, and team. At the end of 20 minutes, the four companies had pitched for over $70M dollars to a group of over 40 individuals.

Later at a business luncheon, I met Jorge Cohen, the regional manager for marketing solutions at Google. Jorge is a seasoned entrepreneur who joined Google after it acquired his life-science company. He is now in charge of tech-to-market at Google. Jorge invited me to Google’s Mexico campus – a stunning glass building located in the heart of Mexico City’s cosmopolitan metro.

Our ten-minute walk took us along the Paseo de La Reforma, a sprawling, tree-lined boulevard commissioned by Maximilliano I to emulate the Champs Élysées in Paris. Our conversation scratched the surface of the innovative and potentially revolutionary things happening at one of the world’s largest companies. For instance, Google is famous for its web-based platforms, but did you know about its efforts in smart infrastructure, genomics, or personalized medicine?

Day 3: A USTAR-Analogue and the Trip to Tijuana

While the trade mission delegation packed up for the airport, I jumped in a cab to squeeze in one last meeting in Mexico City. El Instituto Nacional del Emprendedor (INADEM) is located along the Avenida de los Insurgentes. I am told by one of the locals that Insurgentes is the longest street in the world. I’m told by my cab driver that it will take you to Acapulco, “Don’t turn left. Don’t turn right. Just go until you get there.” Maybe another time, cab driver. No free time on a trade mission.

INADEM is a public body created to encourage and support entrepreneurs and small businesses through grant programs and incubators/accelerators. I was immediately impressed by the parallels to our own mission and tools at USTAR. The grant programs, like those at USTAR, are for technology development. One program provides grants to tech startups to develop technologies from Technology Readiness Levels 3-9. The other program provides grants for technology acquisition into large companies. These programs seemed to be written from USTAR’s TAP and Industry Partnership Program (IPP) playbook.

Because the similarities between our two agencies were endless, we saved time describing our programs in detail and instead spent time discussing the challenges each of our agencies face. These challenges include how to define an innovation ecosystem, how to identify and address gaps, and how to measure progress through metrics. The last issue was particularly interesting. Like USTAR, INADEM’s ultimate goal is to create high-paying jobs. Unlike USTAR, however, “jobs created” isn’t one of INADEM’s metrics. “Why not?” I asked. The answer was simple, but surprising. “Because Mexico understands that these things take time.”

As I scientist, I like to make my decisions based on data. The data shows that technology-based economic development (TBED) works. Full stop. As a scientist who interacts with politicians, I know the power of anecdotes. My story is that after three days in Mexico City and after recent trade missions to Israel and Singapore, my colleagues and I have made an observation: the world has discovered TBED. These are countries with diverse economies, cultures, geographies, and political dispositions. In each case, they have implemented and found success through TBED.

Governor Herbert addressing the delegation and employees at Merit Medical’s factory in Tijuana.

Day 4: Maquiladoras

Tijuana is decidedly different than Mexico City. Cosmopolitan amenity gives way to industrial minimalism. The people are singularly focused and gleefully hospitable.

Day 4 is the day of Maquiladoras. Maquiladoras are companies, usually factories, that can import raw materials free of tariffs, usually with the intent of manufacturing a good that can be sent back across the border for wholesaling. This leg of the trip has been planned to show the delegation what international companies have achieved with manufacturing locations in Mexico.

Our first stop is at Ossur Medical, an Icelandic company that makes prosthetics and medical braces. The Mexico office has grown rapidly in the last several years as more and more product lines are moved from manufacturing centers overseas to Mexico. The head of the factory sees this as a vote of confidence from the parent company and is immensely proud of it.

Tijuana has an issue that should resonate with Utahn’s, it’s wild growth has resulted in a 2.1% unemployment rate. This means that, next to quality control, the most important issue for these companies is talent retention. The monthly regional turnover rate is 7-10%. Ossur Medical prides itself on having a monthly turnover rate of 2%.

Ossur makes a bold statement, “Pay isn’t everything.” In fact, they pride themselves on paying 50-60% the average industry wage. They keep their employees by creating a culture where the employee feels like he or she matters. On Mother’s Day, for instance, workers are invited to bring their whole family in for a company party, usually the biggest party for most employees all year. Meals are provided on site. Doctors are on call 24-7. Ossur even looked at how they could improve their employees lives after work. They saw that on weekends, employees were spending too much time running errands and not enough time relaxing. To solve this, Ossur brought two ATMs to the factory so employees could handle banking at work. Ossur also brought a supermarket to the factory on Thursdays so employees could get groceries without having to waste time.

We later took trips to Merit Medical and to Zodiac Aerospace. Each factory was progressively larger. Each company had different ways of grappling with a tight labor market.

As we toured the facility, it was pointed out that some of the carts used to hold parts during manufacturing had been made in Utah. In fact, in Mexico City, we learned that the seats we sat on at Startup Mexico were also made in our home state of Utah. I’ve come to appreciate the vast similarities between Utah and Mexico. These two instances served as reminders of our vast trade relationships as well.

Day 5: The Return

The last day proved to hold real value as the delegation pushed on to visit the Autonomous University of Baja California.

Hopefully, the similarities I’ve drawn between Utah and Mexico are well established in the mind of any reader to have made it this far. It is easy to believe that these similarities are contrived, that Mexico does not really have the innovation and opportunity I’ve described. It’s even easier to believe that these similarities exist, but have perhaps been exaggerated for the sake of writing a better piece.

My takeaway from this trade mission is simple, Mexico is probably not what you think.

Mexico has hard-working, family-oriented, highly-skilled people. Mexico has a rich history, deep cultural complexity, and cosmopolitan values. Mexico, like Utah, has its strengths and its weaknesses, and has boundless opportunity. And above all that, Mexico has innovation.

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