Mubea

Nearshoring is a business strategy that involves transferring some of a company's operations to nearby countries, either geographically or culturally, in order to reduce costs, improve quality and efficiency, and take advantage of the competitive advantages of each region. In the case of North America, nearshoring has become increasingly important in recent years, especially between the United States and Mexico, due to the renegotiation of the North American Free Trade Agreement (NAFTA), now known as the United States-Mexico-Canada Agreement (USMCA), which entered into force in July 2020, and especially after the global logistics situation created as a result of COVID and subsequently the lack of electronic micro components.

All of these situations have made Mexico the ideal partner for its USMCA partners for the following reasons:

• Strategic geographical location

• Availability of labor

• Operating costs

• Logistics costs

The USMCA establishes new rules for trade and investment between the three countries, with the goal of strengthening economic integration, boosting growth, creating jobs, and protecting the environment. The sectors that have benefited the most from nearshoring include automotive, electronics, aerospace, pharmaceutical, and digital services, all of which require high specialization, innovation, and quality.

In order for nearshoring to be successful and sustainable in the long term, it is necessary for all three countries to invest in the development of their human capital, especially Mexico, which has the potential to develop in the educational and technological areas to become the future reservoir of skilled labor for the USMCA. Mexico is the only country in North America with a favorable population pyramid, with a majority of young people who represent a great opportunity for the future. According to data from the National Population Council (CONAPO), Mexico had a population of 127.6 million inhabitants in 2020, of which 53.1 percent were under the age of 30.

However, in order for Mexico to take advantage of this demographic dividend, the USMCA must help Mexico improve the quality and coverage of its education system, which currently has major gaps and inequalities. According to data from the National Institute for the Evaluation of Education (INEE), in 2019, only 45.5 percent of young people between the ages of 15 and 17 attended high school, and only 19.4 percent of young people between 18 and 23 years old attended higher education. In addition, according to the Programme for International Student Assessment (PISA) of the Organization for Economic Co-operation and Development (OECD), in 2018, Mexico ranked last among member countries in reading, mathematics, and science tests.

These results show the urgency for Mexico to promote a comprehensive education reform, which includes curriculum updating, teacher training, school infrastructure, continuous assessment, social inclusion, and linkage with the productive sector. In addition, it is necessary for Mexico to promote the development of digital and technological skills among its students and workers, which will allow them to face the challenges and opportunities of the fourth industrial revolution and AI. Its USMCA partners must be concerned to ensure that this happens immediately, especially with the arrival of AI, which is coming to change the paradigm of work in the very near future, especially in the manufacturing areas such as automotive, electronics, aerospace, pharmaceutical, and digital services, which will require a new labor and professional profile that does not currently exist in Mexico.

"Nearshoring is a strategy that can benefit all three countries in North America if it is carried out in a coordinated, equitable, and sustainable manner."

AI is a multidisciplinary field that seeks to create systems capable of performing tasks that normally require human intelligence, such as facial recognition, natural language processing, machine learning, or robotics. AI has enormous potential to transform various economic and social sectors, such as health, education, security, agriculture, and entertainment. However, it also poses significant ethical, legal, and labor challenges.

According to AI itself, these are the jobs that are likely to disappear:

• Administrative and office jobs, such as data processing, data entry, and customer service.

• Manufacturing and production jobs, such as welding, assembly, and inspection.

• Transportation and logistics jobs, such as driving, loading, and unloading.

According to a study by the World Economic Forum, AI could automate up to 85 percent of administrative and office jobs by 2030.

On the other hand, the jobs that AI is likely to grow are:

• Jobs related to the development and implementation of AI, such as engineering, programming, and data analysis.

• Jobs related to the supervision and management of AI, such as management, consulting, and training.

• Jobs related to creativity and innovation, such as design, marketing, and customer service.

In order to do this, it is necessary for the USMCA to have a developed society in order to be able to take advantage of its full potential in the years to come, and this will not be possible if it does not focus on the development of Mexico.

In line with the same World Economic Forum, 97 million new jobs related to AI are projected to be created by 2030. The dates proposed by AI itself for these changes are:

• 2023-2025: AI will automate repetitive and low-value-added tasks in an increasing number of industries.

• 2025-2030: AI will begin to automate more complex and creative tasks.

• 2030-2040: AI will have a significant impact on the labor market, creating new jobs and destroying others.

It is important to note that these are just estimates and that the pace of AI automation may vary by industry and country. However, it is clear that AI is transforming the world of work, and humans must prepare for these changes.

According to a study by the World Bank (2019), it is estimated that around 50 percent of current jobs in North America could be automated in the coming years by AI. This means that many workers will have to adapt to new ways of working or seek new job opportunities. Therefore, it is essential that countries invest in continuing education and professional training for their citizens in order to develop the skills necessary to compete in the global market.

Nearshoring is a strategy that can benefit all three countries in North America if it is carried out in a coordinated, equitable, and sustainable manner. To do this, it is essential that Mexico take on the challenge of improving its education system and promoting the development of its human capital, which is its main resource for progress. It is also necessary that its USMCA partners see this as a necessity. Only then will Mexico be able to become a strategic partner for the United States and Canada. Otherwise, the USMCA will be as weak as its weakest link, which at the moment is Mexico, in terms of the possibility of implementing AI in its production processes.