The North American Block: An Unfair Advantage in Tech
An undervalued strategy for International tech companies still operating exclusively from the US
In the beginning, I thought writing about the Tex-Mex advantage was important. Still, considering a more broad possibility and the current opportunity, I then switched to talk about the whole North American Block: the US, Canada, and Mexico region, and its strategic relevance for technology companies.
We have seen this from decades ago. Businesses started to look for talent outside the US, no matter the location. It all began with tech companies looking for the best engineers, designers, and managers, no matter their location or even background. It was an investment in growing the team, and the impact should be seen in the company’s growth, but it could become a considerable cost to maintain it in the long run. The latter relies on the hiring process and in-person interviews, retention strategies, establishing a real work-life balance when employees have joined, and so on.
25 years ago, Microsoft started to hire engineers from the best university and engineering program back in that time in Mexico: Tecnologico de Monterrey. This plan was tactically expanded into other universities. It became a virtuous circle, converting current employees into HR advocates with a special budget assigned to attract more talent from their Alma Matter, assuming more engineers with the same quality as themselves might be found. Throughout that journey, in 1994 the NAFTA 1.0 agreement was signed, and the TN visa became a reality: a visa allowing Mexican, American, and Canadian citizens to settle in any of these 3 regions and justifying the type of job, becoming a fast path for people and also a versatile process for companies in expansion.
In Canada, the industry has seen companies leveraging the immediate proximity to the Northwest and the mid-Atlantic regions in the US. Huge companies such as Amazon, Facebook, and others, have started establishing R&D+AI outposts, hiring people from Universities in Toronto, Waterloo, BC, bringing foreigners using the advantageous immigration process Canada has while providing a great quality of life to engineers in those places.
Before COVID, there was an unfair advantage in this whole block: proximity. The aforementioned becomes key to generate cohesiveness, collaboration, and other determinants enabling businesses to be more efficient in many ways. Thinking of traveling to visit engineers in the Mexico City office, returning to San Francisco for a strategic session, and then having a retreat in Cabo with special crew members from the AI center at Toronto and Montreal to talk about the next five years. Everything within a 2–4 hours flight, in the same time zone, and mutual respect because of the countries' affinities and long history.
Ties between cross-border countries have been undervalued, mainly between Canada and the US with Mexico, and generally speaking, Latin America. There’s an idiosyncrasy distinguishing each particular region, but 400 years back, when colonization started, the Rio Grande Valley was an exploration of both Spaniards and Aglosagones, making a mix that stayed in the whole region, which can be proved with rivers names and a unique food taste.
Today, thinking in the post-COVID era and the new normality that is being settled, proximity is still highly relevant. Despite the privilege tech companies have that huge portions of the workforce can work remote, the opportunity to generate a work-life balance based on working hours is important, considering some team members might have family, children, or responsibilities —the flexibility to unplugged at some point and be focused on the family will be an enjoyment. Ultimately, traveling is going to surge and be a thing as it was, again. IACA says that until 2024 flights will climb to the pre-pandemic numbers. Yet, progressively, having in-person interactions (with precautions) will add value to all outcomes for any company and strategic relationship. Think about a release planning session, talking to potential customers, or just having a random time to hang out with the rest of the team; it will be more amenable and less annoying than traveling 30+ hours with all implicit risks and costs considered in that trip.
I have seen firsthand that more companies in the US and Canada aren’t looking at Latin America as a cheap labor spot but as an unexplored region where great engineers are preparing for the next big venture and challenge. The main stopper today, I would say, is language, but if companies struggle with talent, why not hire someone as a proxy and learn Spanish rather than the other way around? Still, English is the Business language by default, even in Asia, so there’s a gap to be covered. Where there’s a will, there’s a way. Look at what Stripe, YC backed companies, and others have explored and leveraged in the last years across the region.
A killer formula: Business Development and leadership in the US; strategic roles in the US and CA, and operations and product talent in MX and CA. Cost-cutting approach to optimize the positioning of the business as a world-class entity. The opportunity is among the whole block: communication channels, proxies, reducing frictions between hubs and regions, leveraging economies of scale, and bringing more exciting opportunities with state-of-the-art projects for all people across the region — basically fostering a single unit where everyone is allowed to grow and impact.