Roadmap For Design, Engineering And Advanced Manufacturing

Description
Mexico is the most important manufacturing center in Latin America.

Designed in Mexico
Roadmap for design,
engineering and advanced
manufacturing
Designed in Mexico
Roadmap for design,
engineering and advanced
manufacturing
D.R. ©ProMéxico
Camino a Santa Teresa 1679,
Col. Jardines del Pedregal,
Del. Álvaro Obregón,
C.P. 01900,
México, D.F.
www.promexico.gob.mx
[email protected]
First edition
Mexico City, October 2011
PROMÉXICO

Carlos Guzmán Bofll
General Director

Ana María Rivas Llamas
Head of the Administration and Finance Unit

Carlos Casas Guerrero
Head of the Export Promotion Unit
Juan Ángel Vargas Plata
Head of the Business Intelligence Unit

Juan Carlos Téllez Girón Barrón
Head of the Institutional Relations and Support Unit

Luis Anthony Olivé Hawley
Head of the Investment Promotion and International Business Unit

Ilse Oehler Grediaga
General Coordinator of Communications and Image

Sebastián Escalante Bañuelos
Director of Publications and Content

Itziar Gómez Jiménez
Editor
Natalia Herrero Martínez
Proofreader
Elisa Gutiérrez Luna
Designer
Produced by:
Manuel Sandoval Ríos
María Cristina Carreón Sánchez
Diego Humberto Ortíz Porcayo
José Mariano Moreno Blat
All rights reserved. No part of this publication may be reproduced in whole or in
part, or registered in or transmitted by an information storage or retrieval system,
in any form or by any medium, mechanical or electronic, including photochemical,
magnetic, electro-optic, photocopy or any other, without the previous permission
in writing of ProMexico.
ProMexico is not responsible for any inaccuracies or omissions that may be present
in the information held in this publication. As such, ProMexico will not accept any
liability arising from omissions, inaccuracies or errors that this publication may
contain.
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
1. General assessment
2. Manufacturing sector in Mexico
2.1 Design and advanced manufacturing in Mexico
2.2 Advanced manufacturing sector worldwide
3. Methodology
3.1 Technological Roadmap (TRM)
3.1.1 TRM methodology
3.1.2 TRM process
3.2 University of Cambridge methodology
3.2.1 TRM launch process
3.2.1.1 Launch stages
3.3 TRM stages for design, engineering and advanced manufacturing
in Mexico
3.4 Planning
3.5 Development of communication systems
3.6 Collecting relevant information
3.7 Design and implementation
3.7.1 Market workshop
3.7.2 Product and sub-sector workshop
3.7.3 Technology platform workshop
3.7.4 4 R+D+Talent inputs workshop
4. Innovation economy
4.1 Innovation life cycle
4.2 Importance of innovation
Contents
5. TRM working group
5.1 Collection of data, analysis and scope of study
5.2 SWOT

6. Roadmap for technology insertion
6.1 TRM
6.1.1 Trends and drivers
6.2 Talent management
6.3 Defnition of strategic milestones
7. Participating bodies
47
53
65

56
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING MAPA DE RUTA DE DISEÑO, INGENIERÍA Y MANUFAC?
TURA AVANZADA
8
9
Mexico is the most important manufacturing center in Latin America. In fact, a large
number of the products manufactured for North America and the world come from
Mexico. Currently, Mexico accounts for 2.16 percent of world trade and 2.20 percent
of non-oil world trade. This is due in large part to its economic openness and its
extensive network of trade agreements (11 treaties that give it preferential status in
43 countries), notably including the North America Free Trade Agreement (NAFTA)
and the Free Trade Agreement between Mexico and the European Union (TLCUEM).
Thanks to its competitive advantages, Mexico is the leading exporter in Latin
America. In 2010, Mexico’s manufacturing sector exports reached almost 244 billion
dollars, which represents nearly 48 percent of Latin America’s total exports.
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Mexico’s global trade
(Millions of dollars)
Imports Exports
Source: Ministry of Economy, 2011.
2000 1999 1998 1997 1996 1995 1994 1993 2001 2002 2003 2004 2005 2006 2007 2008 2010 2009
1. General assessment
10
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
After signing the NAFTA agreement, Mexico gradually and successfully shifted to
an export driven economy,
1
which naturally complemented the maquila industry
that emerged in the 1960’s.
This convergence of treaties, along with the devaluation of the peso in relation
to the dollar, as well as the experience acquired in the electronic and automobile
industries, created a highly competitive region in which to develop a manufacturing
industry devoted to exports. In past decades, this situation has managed to attracted
a large number of companies interested in exporting from Mexico, taking advantage
of the labor and qualifed engineers, trade agreements and its position in a dollar
zone (especially for European and Asian countries interested in exporting to the
United States).
On the other hand, even though, this development model has managed to
keep Mexico in a competitive position, in relation to its volume of exports, it has
not generated a signifcant base of suppliers capable of providing endogenous
innovation and nationally registered intellectual property, which, added to foreign
investment, could increase the added value of its products and the strategic position
of Mexico regarding the international innovation market.
1
ProMexico, Mexico at
a Glance, 2009, with
data from the Bank of
Mexico (BANXICO).
11
Mexico’s Principal Export Sectors (2010)
(Millions of dollars)
Sector 2008 2009 2010
Participation
Rate 2010
Electronic machinery and equipment 75,215 60,968 71,703 29.41%
Land vehicles and parts 42,822 33,698 51,777 21.24%
Mechanical mechanisms, boilers and parts 33,674 29,079 41,626 17.08%
Optical and medical devices and instruments 9,316 8,632 10,187 4.18%
Mineral combustibles and their derivatives 5,263 6,206 9,218 3.78%
Plastic and its products 5,370 4,649 5,705 2.34%
Furniture 5,293 4,146 5,434 2.23%
Iron and steel products 4,451 3,198 3,660 1.50%
Iron and steel 4,838 2,190 3,589 1.47%
Vinegar and other drinks 2,908 1,731 2,689 1.10%
Clothing and accessories except knitted 2,926 2,490 2,560 1.05%
Organic chemical products 1,907 1,669 2,061 0.85%
Copper and copper products 2,132 1,375 2,051 0.84%
Essential oils and resins 1,485 1,789 1,778 0.73%
Clothing and knitted accessories 1,851 1,567 1,699 0.70%
Rubber and its products 1,470 1,162 1,671 0.69%
Metal products 1,953 1,474 1,617 0.66%
Glass and its products 1,395 1,174 1,473 0.60%
Others 24,791 20,543 23,273 9.50%
Total 229,058 187,741 243,772 100%
Source: ProMexico Business Intelligence Unit with information of the Global Trade Atlas, 2011.
1. General assessment
12
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
[...] At frst glance, the previous policy appears to be favorable in terms of the
diversifcation of Mexican Exports and the increase of sophistication through the
promotion of the maquiladora industry: the share of trade in Gross Domestic Pro-
duct (GDP) has doubled in the past 20 years, with manufacturing rising from 20 to
85 percent. Mexican manufacture exports are tightly integrated to global chains.
Still manufacture exports are mainly based on imported goods that are fnally re-
exported with minimal use of local supplies, thus implying a negligible quantity of
added value to Mexican manufacture exports. In fact, value added as a share of GDP
in Mexico has fallen since the 1990s and its growth performance has been poor.
The causes of this disappointing performance are open for discussion, but a gradual
“maquilization” of the Mexican economy has been cited, in which domestic indus-
try has replicated the maquila model responsible pf several national competitive
inefciencies such as the growing share intermediary imported goods and the sub-
sequent collapse of the export multiplier[...].
2
This becomes more relevant if you consider that Mexico today has more engi-
neering students than any American country and three times as many graduates
per capita in this feld than the United States. This unprecedented window of op-
portunity, as well as the country’s comparative and competitive advantages, point
to a privileged position for the development of an industry based on the innovation
of high added value. This is even more surprising if you consider that the Index of
Technological Sophistication of goods produced in Mexico (3.25) is higher than that
of India (2.61) or Brazil (2.49).
3
The ingredients are there; the only element missing is
strategy.
2
Organization for
Economic Co-operation
and Development
(OECD), Perspectives
on Global
Development 2010.
3
Ibid.
13
There is a clear example of this situation in the manufacture of molds and
tooling in Mexico, an industry that imports goods with a value that reaches two
billion dollars
4
without a comparable local industry. The lack of capacity to produce
this particular type of manufactures hampers the local productions of non-complex
products, thus creating a dependency on foreign suppliers and also favoring the de-
velopment of merely assembling companies. Local design and engineering capacity
should be harnessed and developed for the manufacture of this type of products,
attracting higher value and, above all, it should maintain control over capital goods.
Such trends and necessities were recurrent during the development of the na-
tional strategies for the aerospace and medical devices sectors, thus contained ex-
plained in their respective roadmaps. While developing these maps it was observed
that one of the biggest challenges was the horizontal capabilities of advanced ma-
nufacturing, design and support engineering for these sectors.
4
Ministry of Economy,
Customs data, 2009.
1. General assessment
Technological Sophistication Index (TSI)
Source: Perspectives on Global Development 2010, OECD, Based on Woo (2010).
Region/Country 1995 2007
OECD 2.92 2.96
Asia (except Japan) 3.09 2.95
China 3.13 3.75
India 2.5 2.61
Indonesia 2.19 2.22
Japan 3.98 3.69
South Korea 3.78 3.88
Taiwan 3.8 3.94
Latin America 1.98 2.16
Mexico 3.37 3.25
Argentina 2.05 2.06
Brazil 2.53 2.49
Chile 1.55 1.58
Sub-Saharan Africa 1.62 1.82
South Africa 1.82 2.44
14
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Parallel to this, an analysis of development opportunities in the electronics sector
and feedback from the representatives of the automotive and appliance industries,
conducted by the Mesura network and ProMexico, agreed on the need to develop a
strategy based on the roadmap methodology to be applied to the felds of design,
engineering and advanced manufacturing.

For this purpose, talent is a critical factor and one of the key areas for develo-
ping a strategy which supports the future development of the sector. Concern for
people working in manufacturing, engineering talent and the critical contribution
they make to the economy are some of the issues, which have led to this roadmap.
Manufacturing companies are partners in the efort to build a future for the market
for new products and ideas. In a country like Mexico, a healthy manufacturing sec-
tor is key to providing better jobs, fostering innovation, increasing productivity and
providing higher standards of living for the population.
The orientation of this technology roadmap (TRM) will be towards advanced ma-
nufacturing focused on the management of talent and the promotion of design,
development and engineering capabilities in the processes, products and materials
produced in Mexico. A paradigm shift from “Made in Mexico” to “Designed and ma-
nufactured in Mexico.”
A technology or innovation roadmap is a comprehensive, dynamic and organi-
zed plan which defnes strategic milestones that bring support from various stake-
holders for common goals. A well implemented TRM is accompanied by a plan of
action that allocates the resources necessary to achieve them. On the other hand,
as far as human beings are concerned, a TRM does not reveal the future, rather it is
a draft, an unfnished document that should be revised and refned in a six-month
planning horizon and a vision for global impact of not less than 10 years.
Here we present the results of this frst proposal for an innovation roadmap for
the design, engineering and advanced manufacturing sector. It is a plan that refects
the views and perspectives on the future of a group of leaders from the automoti-
ve, aerospace and electronics sectors as well as representatives from academia, re-
search centers and government. Together they form a triple helix for the design and
development of future advanced manufacturing in Mexico.
16
17
Speaking of manufacturing in Mexico is to talk about an area that includes capabilities
in the most diverse sectors: the automotive industry, electronics and aerospace, to
name a few; it is to focus on the maquila industry, on the development of suppliers
and their integration into the overall value chain.
140,301
Mexican exports volume
(Millions of dollars)
157,487 174,006 201,753 218,650 229,058 187,741 243,772
Source: ProMexico Business Intelligence Unit with data of Global Trade Atlas 2011.
2003 2004 2005 2006 2007 2008 2010 2009
2. Manufacturing sector in Mexico
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
18
Even during the crisis, Mexico remained the leading exporter in Latin America. In
June 2009, the volume of Mexican exports amounted 104 billion dollars, while total
exports that year were 230 billion dollars.
5

After the crisis, for the comparative period January-April 2010, some manufac-
turing sectors already showed a recovery of up to 100 percent (automotive sector),
compared with the same period in 2009.
5
Ministry of Economy,
2009.
Division of Mexican exports by sector in accordance with ProMexico’s
projects (January-April)
(Figures in dollars)
Sector 2009 2010 Var (%)
Aerospace 906,727,298.00 1,134,048,394.00 25.1
Car parts 5,023,120,540.00 9,547,041,891.00 90.1
Buses and truck cabs 2,815,259,046.00 4,534,990,785.00 61.1
Cars 3,466,129,172.00 6,999,410,915.00 100.8
Domestic appliances 1,272,800,352.00 1,761,892,610.00 38.4
Electronic equipment 14,341,790,484.00 17,273,786,328.00 20.4
Medical equipment 1,600,987,413.00 1,834,440,586.00 14.6
Pharmaceuticals 485,660,205.00 610,610,263.00 25.7
Petrochemical industry 1,124,920,750.00 1,702,025,679.00 51.3
Plastic products 798,011,990.00 1,053,288,578.00 32.0
Metalworking 2,776,513,101.00 3,757,280,299.00 35.3
Mining and metallurgy 581,564,592.00 892,876,981.00 53.5
Other industries 772,348,842.00 1,131,579,181.00 46.5
Paper, printing and publishing industry 542,040,631.00 654,444,912.00 20.7
Rubber and its products 318,596,530.00 503,081,572.00 57.9
Chemicals 1,570,994,658.00 2,226,440,866.00 41.7
Iron and steel 1,195,987,972.00 1,690,831,770.00 41.4
Source: ProMexico Business Intelligence Unit with information of Ministry of Economy, 2010.
19
This growth can be explained partially by the post-crisis rebound, but these pro-
portions also includes a change of signal from manufacturing companies in the de-
veloped countries which seek world-class quality manufacturing platforms at com-
petitive costs.
In the comparative study of total costs of the supply chain to supply the United
States market, Alix Partners consultancy shows that Mexico is the most competitive
country for costs. If it is compared with other low-cost manufacturing countries, the
classifcation would be as follows:
1. Mexico
2. India
3. China
4. United States
5. Brazil
2. Manufacturing sector in Mexico
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
20
Mexican exports to Europe (2010)
(Millions of dollars)
1,688 3,466 1,576 839 746 524 511 467 296 225
S
p
a
i
n
B
e
l
g
i
u
m
H
u
n
g
a
r
y
I
r
e
l
a
n
d
I
t
a
l
y
Source: ProMexico Business Intelligence Unit with information of Global Trade Atlas 2011.
G
e
r
m
a
n
y
U
n
i
t
e
d

K
i
n
g
d
o
m
F
r
a
n
c
e
S
w
i
t
z
e
r
l
a
n
d
H
o
l
l
a
n
d
These circumstances make the Mexican export model attractive to investment,
primarily as an export platform to the largest market in the world: the United States,
which is in turn the largest producer of manufactured goods. By itself the US manu-
facturing sector represents the world’s ffth largest economy–larger than the entire
Chinese economy. Additionally, more than 90 percent of total patents registered in
the United States come from this sector.
6
Even so, eforts to diversify export mar-
kets continue and Mexican exports increasingly fnd new markets. The main export
markets in the European Union and the sectors in which European companies have
invested in Mexico are shown as an example.
6
Department of Trade,
Manufacturing in
America, 2004.
European investment in Mexico by manufacturing subsector (2010)
(Millions of dollars)
Sector
European FDI %
Agri-Food industry 6,082.2 53.74%
Computer and ofce equipment 1,271.9 11.24%
Automotive industry 894.3 7.90%
Beverage and tobacco industry 778.4 6.88%
Other manufacturing industries 552.3 4.88%
Electrical equipment and accessories 529.4 4.68%
Manufacture of machinery and equipment 342.4 3.02%
Plastic and rubber industry 197.9 1.75%
Chemical industry 168.8 1.49%
Textiles 158.5 1.40%
Basic metal industries 123.9 1.09%
Others 296.5 2.62%

Source: National Register of Foreign Investment, Ministry of Economy, 2009.
21
2. Manufacturing sector in Mexico
European Union Foreign Direct Investment (FDI) in Mexico by country
(Total percentage)
73.18% 4.51% 3.10% 0.30% 0.33%
S
p
a
i
n
H
o
l
l
a
n
d
G
e
r
m
a
n
y
2.78%
F
r
a
n
c
e
S
w
e
d
e
n
L
u
x
e
m
b
u
r
g
2.51%
B
e
l
g
i
u
m
0.78%
U
n
i
t
e
d

K
i
n
g
d
o
m
I
t
a
l
i
y
I
r
e
l
a
n
d
11.60% 0.93%
Source: Ministry of Economy, DGIE 2011.
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
22
According to the Alix Partners study, Mexico has remained as the best low-cost
country (LCC) for outsourcing operations in the U.S., maintaining a competitive posi-
tion than countries like Russia, India and China. Stephen Maurer, Director General of
the consultant and head of the Department of Manufacturing Improvement Practi-
ces, believes that “despite recent improvements in U.S. productivity, global compe-
titors have become even more formidable, either as destinations outsourcing or as
opponents of U.S. companies.”
7
European Union FDI in Mexico by sector
Source: Ministry of Economy, DGIE 2011.
(Percentage)
72%
Manufacture industry
4%
Communication
and transport
3%
Trade
2% 7%
Others Financial
services
Real estate
services
11% 1%
Construction
Relative costs: Mexico vs. US
Period (2005-2008)
100%
US costs
in 2005
82%
Mexico costs
in 2005
5%
Labor
costs
2%
Transport
costs
7%
Proft
penalty
24%
Labor
advantage
Operational
advantage
3% 12%
Exchange
rate impact
75%
Mexico costs
In 2008
Source: Alix Partners, US Manufacturing-Outsourcing Cost Index, 2010.
7http://www.alixpart-
ners.com/en/Media-
Center/PressRelea-
seArchive/tabid/821/
articleType/ArticleView/
articleId/58/US-Manu-
facturing-Slips-in-Com-
petitiveness-According-
to-AlixPartners-Study.
aspx
23
2.1 Design and advanced manufacturing
in Mexico
The situation mentioned in the previous section, although temporarily favorable
to the country, should be exploited with the future in mind and as a source of op-
portunities for the development of capabilities beyond those of cost, which largely
depend on cheap labor. It is necessary to focus on innovation capabilities, on the
development of Mexican brands, product design, supply chain, productivity and all
those factors that provide long-term benefts.
These opportunities are based on the development of an integrated platform for
advanced manufacturing, from research, design and development of new products
and processes to sales and marketing.
Advanced manufacturing is an industry very diferent from the stereotype with
which it is commonly associated: of a dirty, dangerous and dark industry. Seeing a
Mexican automotive or aerospace industry is sufcient to prove that it is just the
opposite of this notion. In Mexico you can fnd experts in computers and a highly
qualifed workforce.
2. Manufacturing sector in Mexico
Advanced Manufacturing
Research
Design and
development
Production
Services
Logistics
Marketing
Technology
Information
Human capital
Education
Source: ProMexico Business Intelligence Unit, 2010.
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
24
Unlike traditional manufacturing, advanced manufacturing is not supported by
low labor costs and by the scale and volume of production; it is an industry concer-
ned with the skills and creativity to manufacture complex, high specifcation pro-
ducts.
Additionally, it does not exist as a set of separate businesses, rather as a network
made up of engineers, business developers, entrepreneurs, scientists, fnancial and
other experienced professionals who collaborate and pool their creative potential
around innovative solutions for users and customers.
In the Mexican case, the advanced design and manufacturing sector has notable
success stories. A few of these are listed below:
Tremec transmissions designed for the Corvette, Mustang and Hummer.
Chassis for Ram trucks designed and manufactured by Metalsa.
Minnesota train designed and manufactured by Mexican engineers at Bombardier.
Mastretta, sports car designed in Mexico.
787 Dreamliner interiors designed at Zodiac Mexico.
Low pressure turbines at ITR.
New bicentennial edition Jetta with 70 percent of its parts by Mexican
suppliers, in which over 900 Mexican engineers were involved in design and
development.
8
FX-05 “Xiuhcoatl” assault rife designed and conceived by more than 64
military engineers from the Military Industry Centre for Applied Research and
Technological Development (CIADTIM).
The design of the Salamandra Lexion car for the Spanish company Yakey,
conceived in Mexico, featuring a compressed air engine (top speed of 55
mph) and a hybrid version (combustion engine and compressed air) capable
of speeds approaching 90 mph.
9
Zonda Telecom, 100 percent Mexican company that has designed cell phones
since 2002, with a presence in more than 11 countries in Central and South
America.
10

GX turbine designed by GE and more than 120 engineers. The company was
also involved in the creation of the turbine for the world’s biggest aircraft, the
Airbus 380.
8
www.cnnexpan-
sion.com/nego-
cios/2010/07/06/
vw-hace-auto-del-bi-
centenario-en-puebla
9
www.cocheseco.
com/salamandra-
lexion-yakey-presen-
ta-su-hbrido-de-tres-
ruedas-las-imgenes/
10
www.zondatelecom.
com/historia.html
25
Chevy C2 designed and produced by GM in Mexico in 2004.
Part design and prototypes for the new A350 aircraft, which will enter service
in mid-2012, conducted by the Honeywell Aerospace Center for Research
and Technology in Mexicali.
Technological advances and continuous new product development have
allowed Mabe to compete with new American, Asian and European brands
as well as to expand its markets and manufacturing operations.
International studies such as Consumer Reports have ranked Mabe washing
machines amongst the top fve worldwide.
Delphi’s principal design center is located in Ciudad Juárez, Chihuahua. Many
products and systems are designed at the Delphi MTC (Mexico Technical
Center) for customers in Canada, Mexico and the United States.
2. Manufacturing sector in Mexico
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
26
2.2 Advanced manufacturing sector
worldwide
Advanced manufacturing is one of the most important links in the development of
a nation’s industrial competitiveness. Due to its strong interconnection with other
economic sectors (primary and tertiary), advanced manufacturing involves both the
demand for raw materials and intermediate components, such as fnancial services,
transportation, software and many other services within a national economy.
Even with the strategic importance of the advanced manufacturing sector since
the 1970s, the economic development of most OECD countries has been marked
by the decline of the workforce (employment) in this sector, coupled with growth in
added value associated with increased productivity within OECD member countries
and the growth of competitiveness of the emerging economies.
11
11
Pilat, D. et al. (2006),
“The Changing Nature
of Manufacturing in
OECD Economies”,
OECD Science, Techno-
logy and Industry Wor-
king Papers, 2006/9,
OECD Publishing.
DOI:10.1787/308452426871.
12
Ibid.
Share of manufacturing in total employment
1970, 1985 and 2003 (or last year available)
S
l
o
v
a
k
i
a
C
z
e
c
h

R
e
p
u
b
l
i
c
35%
30%
25%
20%
15%
10%
5%
0%
1970 2003 1985
H
u
n
g
a
r
y
S
w
i
t
z
e
r
l
a
n
d
P
o
l
a
n
d
G
r
e
e
c
e
I
c
e
l
a
n
d
M
e
x
i
c
o
N
e
w

Z
e
a
l
a
n
d
P
o
r
t
u
g
a
l
A
u
s
t
r
i
a
L
u
x
e
m
b
u
r
g
S
p
a
i
n
I
t
a
l
y
K
o
r
e
a
F
i
n
l
a
n
d
J
a
p
a
n
S
w
e
d
e
n
I
r
e
l
a
n
d
D
e
n
m
a
r
k
F
r
a
n
c
e
B
e
l
g
i
u
m
C
a
n
a
d
a
U
n
i
t
e
d

K
i
n
g
d
o
m
H
o
l
l
a
n
d
N
o
r
w
a
y
A
u
s
t
r
a
l
i
a
U
n
i
t
e
d

S
t
a
t
e
s
G
e
r
m
a
n
y
Source: OECD, December 2005.
27
Despite the decline of the manufacturing side in OECD member countries, there
are some advanced manufacturing industry sectors which by 2001 had still had not
experienced a signifcant decline in jobs, or were stable, such as the food, chemical
and automotive industries.
12
This trend has to do with the fact that developed coun-
tries have maintained a strong comparative advantage with the rest of the world in
these sectors (e.g. the pharmaceuticals and automobiles industries), or due to other
international factors (e.g. the food crisis and food industry).
Employment in manufacturing by key activity
G7 countries. Period 1970-2001 (millions of jobs)
0
1
2
3
4
5
6
7
8
9
10
1970 1990 1980 2001
F
o
o
d
s
T
e
x
t
i
l
e

p
r
o
d
u
c
t
s
W
o
o
d
-
b
a
s
e
d

p
r
o
d
u
c
t
s
P
a
p
e
r
-
b
a
s
e
d

p
r
o
d
u
c
t
s
C
h
e
m
i
c
a
l
s
N
o
n
-
m
e
t
a
l

m
i
n
e
r
a
l
s
M
e
t
a
l

p
r
o
d
u
c
t
s
M
a
c
h
i
n
e
r
y
E
l
e
c
t
r
i
c
a
l

e
q
u
i
p
m
e
n
t
M
o
t
o
r

v
e
h
i
c
l
e
s
O
t
h
e
r

m
e
a
n
s

o
f

t
r
a
n
s
p
o
r
t
O
t
h
e
r

m
a
n
u
f
a
c
t
u
r
e
d

p
r
o
d
u
c
t
s
Source: OECD Indicators Database, 2005.
2. Manufacturing sector in Mexico
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
28
This trend has to do with the fact that developed countries have maintained a
strong comparative advantage with the rest of the world in these sectors (e.g. the
pharmaceuticals and automobiles industries), or due to other international factors
(e.g. the food crisis and food industry).
Added to this phenomenon of unemployment and the increase in value added to
manufactured products, competitiveness is measured in terms of innovation and the
capacity for nations to add value not only in terms of labor. Likewise, market share is
measured as value added and in this sense we can observe a diferential evolution de-
pending on the region. Various regions have contrasting strategies to increase the do-
mestic content of manufactured goods. In the case of Mexico, there is stagnation in the
value added rates with one percent, while countries like China have quadrupled this
factor to levels of about seven percent for the year 2000.
High Medium-low Medium Low
OECD growth
Manufacturing employment by technological intensity
Average annual growth in percentages. Period 1990-2003 (or latest year available)
Source: OECD Indicators Database, 2005.
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
E
l
e
c
t
r
i
c
a
l

m
a
c
h
i
n
e
r
y P
l
a
s
t
i
c

p
r
o
d
u
c
t
s
S
h
i
p
b
u
i
l
d
i
n
g
O
i
l

r
e
f
n
i
n
g
N
o
n
-
m
e
t
a
l
l
i
c

p
r
o
d
u
c
t
s
B
a
s
i
c

m
e
t
a
l
s
P
h
a
r
m
a
c
e
u
t
i
c
a
l

p
r
o
d
u
c
t
s
T
e
l
e
v
i
s
i
o
n
,

r
a
d
i
o

o
r

c
o
m
m
u
n
i
c
a
t
i
o
n

s
y
s
t
e
m
s
C
o
m
p
u
t
e
r
s
A
e
r
o
n
a
u
t
i
c
s

a
n
d

a
e
r
o
s
p
a
c
e
S
c
i
e
n
t
i
f
c

I
n
s
t
r
u
m
e
n
t
M
o
t
o
r

v
e
h
i
c
l
e
s
C
h
e
m
i
c
a
l
s

O
t
h
e
r

t
r
a
n
s
p
o
r
t

e
q
u
i
p
m
e
n
t
E
q
u
i
p
m
e
n
t

a
n
d

m
a
c
h
i
n
e
r
y
F
o
o
d
,

d
r
i
n
k

a
n
d

t
o
b
a
c
c
o
O
t
h
e
r

m
a
n
u
f
a
c
t
u
r
e
d

p
r
o
d
u
c
t
s
P
a
p
e
r

a
n
d

p
r
i
n
t
i
n
g
W
o
o
d

p
r
o
d
u
c
t
s

a
n
d

i
t
s

d
e
r
i
v
a
t
i
v
e
s
T
e
x
t
i
l
e
s

a
n
d

c
l
o
t
h
i
n
g
29
1980 1990 1985 1995 2000
Share of manufacturing value added
for the major developing regions
Manufacturing employment by technological intensity
Average percentage growth. Period 1990-2003 (or last year available)
Source: OECD Indicators Database, 2005.
7%
6%
5%
4%
3%
2%
1%
0%
S
u
b
-
S
a
h
a
r
a
n

A
f
r
i
c
a
E
a
s
t
e
r
n

A
s
i
a
M
i
d
d
l
e

E
a
s
t

a
n
d

N
o
r
t
h

A
f
r
i
c
a
S
o
u
t
h

A
f
r
i
c
a
C
h
i
n
a
S
o
u
t
h
e
r
n

A
s
i
a
L
a
t
i
n

A
m
e
r
i
c
a
M
e
x
i
c
o
2. Manufacturing sector in Mexico
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
30
MAPA DE RUTA DE DDMA
31
3.1 Technology Roadmap (TRM)
The TRM is a dynamic analysis tool for developing strategies based on innovation and
technology. It is used increasingly by companies, industries, geographical regions or
countries to support their strategies. It is based on the graphical representation of the
main aspects of the strategy to be followed and on the defnition of milestones that
allow for the actions necessary in carrying out a strategy and for the resources ne-
cessary for its implementation to be set out over time. The graphical representation
provides a framework for answering questions like: where is the industry now? Where
does it want to get to? And what is needed to get to the desired destination?
TRMs can take many forms, but the most common is a graphic over time (hori-
zontal axis) and a set of activities typically grouped into four major themes: market,
product, technology and the relationship between them (vertical axis).
Planning horizons may be short-term (maximum one year) for sectors such as
information technology, by virtue of the pace at which change occurs. For industrial
design, engineering and advanced manufacturing, the horizon is usually medium to
long-term given their complexity, covering a period of 10 years with intermediate
horizons of three to fve years and the immediate actions needed to achieve them.
Visual representation of the TRM is very efective in communicating the stra-
tegy as it allows for the visualization of the objectives defned. This process is not
an attempt to predict the future, rather to create an agreed or supported vision of
technological development over the medium and long-term, to identify areas for
research and technological development to be followed. It is equally important to
stress that a comprehensive planning system is a dynamic and living system that
should be modifed according to changes in the environment and the actors, a situa-
tion which requires the plan to be reviewed and agreed periodically.
3. Methodology
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
32
3.1.1 TRM methodology
TRMs can be displayed in a variety of ways, but they are generally presented graphi-
cally in the following form:
The milestones and objectives for the market are shown in the upper part of the
map, as well as the important trends for consideration in the sector being analyzed.
This, in turn, is linked to specifc programs or technology developments that are dis-
played on the map graphic, thus connecting future products and services as well as
market and/or business opportunities.
The process for developing the TRM is based on the active participation of key
industry players who represent the equity, which validates the planning.
Source: Cambridge University, Fast Start-up Technology Roadmapping.
Market / Business
Product / Service
Technology / Inputs
Time
33
3.1.2 TRM process
The TRM process focuses primarily on three stages, as shown in the fgure below:
Phase 1
Regional analysis of cluster capabilities and opportunities
Information from one-to-one interviews.
Inventory of innovation undertaken by universities.
Recent information, including among others federal topics, industry, employment
and a focus on wages and risk capital.
Account of technology programs oriented to the workforce and skills.
Identifcation of potential opportunity objectives.
Phase 2
TRM design and implementation
Putting together a trusted group of 18 to 22 participants from industry, academia,
government and business leaders for the correct design of the TRM.
Run a working group to identify and review the windows of opportunity.
Creating a business plan, identifcation of project champions, resources and
sustainable mechanisms for launching initiatives.
Phase 3
Launch of initiatives, sustainable implementation and performance/progress reporting
Creation of a working group, which combines federal, state and local eforts
and other critical resources for regional innovation support.
Implementation of the TRM for the sector analyzed.
Ensure sustainability, momentum and resources to complete the effort.
3. Methodology
Regional
analysis of cluster
capabilities
and opportunities
Design and
implementation
of TRM
Launch
of initiatives
Sustainable
implementation
Performance /
progress report
Regional
analysis of cluster
capabilities
and opportunities
Design and
implementation
of TRM
Launch
of initiatives
Sustainable
implementation
Performance /
progress report
Source: Philadelphia Chamber of Commerce, Connecting the Greater Philadelphia Innovation Economy, 2003.
34
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
3.2 University of Cambridge methodology
3.2.1 TRM launch process
The central element of the process involves a series of meetings in which the
industry’s principal players actively participate: customers, suppliers, government
agencies at the federal and state levels, universities and research centers. Their par-
ticipation is essential to defne the scope of the TRM (vision and desired objectives)
as well as those key aspects of the industry in relation to the market, product and
technology with the aim of supporting the design and implementation of a concer-
ted strategy and therefore to increase its chances of success.
The fast track to developing a TRM seeks to facilitate its launch, establishing the
most important relationships between the technological resources and the busi-
ness drivers and identifying the most important gaps in the areas of markets, pro-
ducts and technologies.
The main objectives of the launch process are:
Support for the process by specifc companies within the TRM.
Establishing key links between the technological resources and the business drivers.
Identifcation of major gaps in the market, in products and in technological intelligence.
Development of a frst draft of the TRM.
Support for the technology strategy and the planning initiatives.
Support for communication between business and technical functions.
35
3.2.1.1 Launch stages
Stage 1
Market analysis
Find and prioritize a set of markets.
Define the sector and business drivers.
Analysis of social, technological, economic and political-legal trends.
Stage 2
Sectors/niches/product
Establish a set of sectorial niches that can satisfy the drivers identifed in stage 1.
Create a bridge between industry milestones defned by the way the market evolves
and the niches of sectors and products that can meet these demands.
Stage 3
Technology and technological platforms
Identify possible solutions and technological platforms aligned to market niches,
to defne a second analysis chart.
Stage 4
Mapping stage
Draw technology and marketing lines for the development of the TRM.
Defne the TRM format in terms of timescale, levels and strategy for products and
sectorial niches, taking into considering: the identifcation of the major milestones
in the sector, the evolutionary line of the product and technology programs and
the priorities of the market drivers.
Stage 5
Implementation
Identify the gaps in the market, product, sectorial niches and technological knowledge
as a whole.
Conduct an assessment of the best implementation of the TRM in the industry.
3. Methodology
36
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
3.3 TRM stages for design, engineering and
advanced manufacturing
ProMexico and the National Center of Metrology (CENAM) developed the present
Technology Route Map (TRM) in accordance to Cambridge ‘s methodology mentio-
ned in the previous section. Thus, the work was divided into four main stages: plan-
ning, development of communication systems, collection of relevant information
and design and implementation.
– Benefts of a TRM–
The main benefts are derived from the process, rather than the TRM itself. By bringing together key industry players,
opportunities are created for each to share information and perspectives.
The most important beneft of this frst TRM is to establish communication channels between the actors and a common
basis for developing the strategy for the industry.
The TRM graphic facilitates the analysis of information obtained and summarizes the results of the meetings.
TRMs efciently illustrate the path that the industry could move along from its current situation towards the desired
vision and long-term goals.
3.4 TRM planning
The planning stage covered defning its objective, scope and approach. It also crea-
ted a working group with key players from government, industry, chambers, aca-
demia, research centers and other bodies necessary for a correct approach to the
subject.
In order to manage it in an organized manner, a schedule of working group
meetings with specifc objectives was defned:
Work schedule for the advanced manufacturing roadmap
Collection of relevant information
Planning
Development of communication systems
Design and implementation
Source: ProMexico Business Intelligence Unit, 2009.
J
A
N
U
A
R
Y
F
E
B
R
U
A
R
Y
M
A
R
C
H
A
P
R
I
L
M
A
Y
J
U
N
E
J
U
L
Y

A
U
G
U
S
T
S
E
P
T
E
M
B
E
R
O
C
T
O
B
E
R
N
O
V
E
M
B
E
R
D
E
C
E
M
B
E
R
37
3.5 Development of communication systems
At this stage a communication system was created through the SharePoint pla-
tform, in which the actors had access to the various contributions made by each
of the industry participants. This virtual library includes documents defning the
industry itself, as well as individual projects by the participating bodies.
The creation of this joint platform that facilitates communication among indus-
try players is one of the main objectives of the project, since it enables to direct and
bring together all the eforts to fnd synergies and common goals. The frst phase of
integration depends on the knowledge of the parties and promotes the shared use
of information and collaboration on the production of documents.
3.6 Collection of relevant information
In this stage, the working group members exchanged documents on defnitions and
also information about the projects on which they have worked. These papers cove-
red topics from various areas.
3.7 Design and implementation
The TRM design and implementation stage was divided into several workshops
in which the participants in the working group discussed issues relevant to its
structure. The markets workshop, products and sub-sector workshop, technology
platforms workshop and the research + development (R & D) + talent inputs works-
hop were conducted like this.
3.7.1 Market workshop
This workshop included a SWOT analysis of strengths, weaknesses, opportuni-
ties and threats by the working group participants and an analysis that considers
the cost-beneft analysis of the principal factors identifed as strengths, weaknesses,
threats and opportunities.
3. Methodology
38
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
3.7.2 Products and sub-sector workshop
This workshop covered the study and analysis of the basic concepts, market matri-
ces and the market strategies for the products and sectors.
3.7.3 Technology platforms workshop
This workshop addressed issues relating to technological solutions in the sector, the
grouping of areas of technology and a matrix of areas and their main characteristics.
3.7.4 R+D+talent inputs workshop
The workshop covered the grouping of the R+D areas and a matrix dedicated to R+D
and the technology current in the area.
The information gained and used in the various workshops enabled the working
group to begin formulating a frst approach to the TRM, in which the variables ob-
tained became the main inputs in this frst draft. Thus this frst version incorporates
market factors (drivers, trends, triggers, strategic milestones, legislative events and
activities of the competition) and the key resources (talent, knowledge, partnerships,
investment and items for discussion).
As a fnal phase of the TRM, a process of analysis was necessary in which the di-
verse participants putting together the national strategy validated the information it
contained. Similarly, once validated, it is crucial to identify project leaders who make
the development of mechanisms to sustain the initiatives possible.
In conclusion, it is necessary to specify and emphasize the dynamic nature of a
TRM, i.e. that the initiatives and conclusions are changeable in conjunction with the
internal and external aspects. Equally, consideration should be given to the fact that
joint working and information sharing make the strategy an extremely valuable tool
for the industry, which will enable the alignment of individual eforts of each actor in a
sector in a direction that develops and prompts the industry’s evolution.
41
4. Innovation economy
4.1 Innovation life-cycle
According to the defnition of the international fnancial consultancy New Economic
Strategies (NES), the concept of innovation is not only based on the adoption and
development of new technological tools, but rather a concept that should include:
new models of governance, novel work schemes and innovative use of technology
to address new challenges and exploit new opportunities, thus creating a model of
continuous work.
With the appearance of a new paradigm based on knowledge, resources of in-
novation and talent have become the new capital of nations and enterprises which
are even more strategic than fnancial resources. And this transformation is only the
threshold of entry into a more complex and dynamic society, driven by talent and
intellectual capital: a network society based on knowledge.
13
Corporations are defning more of their value in terms of intangibles: the creati-
vity of their designers, the efectiveness of their software architects, the knowledge
of their marketers, the strength of their internal organization or culture and their
links with external partners. These are the goods that are recognized on the global
stage in the search for efciency improvements. Collecting technology and applied
knowledge (know-how) is now more important than the combination of plant and
equipment or the construction of new installations. To extend their reach, frms buy
access to specialized brands and niches in the market. The “dematerialization” of
much of economic activity, delineates the new patterns of globalization.
14
In this new society of multiple connections and sustainable development, the
level of competitiveness is defned by the ability to draw together numerous actors
in a synergistic system that promotes innovation and continuous learning. This new
environment sets out new challenges and opportunities for businesses, institutions
of higher education and research, business support organizations and government.
From a market standpoint, the network economy changes the perspective of
competition and competitiveness from a local perspective of businesses against bu-
sinesses to a global view of trade blocs versus trade blocs.
13
ProMexico Business
Intelligence Unit, “Ciu-
dad Creativa Digital.
Plan de Negocios”
(Creative Digital City.
Business Plan), 2009.
14
OECD, “New Patterns
of Industrial Globaliza-
tion,” 2001.
42
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
The reference point is no longer the regional and local leader; more often busi-
nesses should compare themselves with global leaders and should penetrate mar-
kets more deeply that were once considered exclusive to local or national suppliers.
Transnational corporations pour multimillion-dollar eforts into understanding
local markets and they harmonize their products and services in accordance with
the needs of countries and regions, sometimes in accordance with small groups and
even individuals. This global vision and local action gives them the strength to con-
template a broad and global market with fexibility of action in accordance to local
“Glocal” needs.
And while these transnational companies achieve increased penetration in eco-
nomies that that were traditionally restricted, local businesses with short-range and
short-term vision lose competitiveness and the business environment disappears
because of a simple Darwinian matter of survival of the fttest.
It is therefore necessary to defne a strategy that promotes and improves the
competitiveness of Mexican companies in order to strengthen the national eco-
nomy and the sustainable social development of our country. We believe this stra-
tegy should focus on: increasing the systemic competitiveness of enterprises, pro-
ductive articulation and teamwork, the development of business communities in
the pursuit of a grand vision and that promote the creation of a new generation of
“glocal” Mexican business people.
4.2 Importance of innovation
Innovation is currently a critical concept for any industry, especially those in which
technology is crucial.
Science and technology require leadership and an action plan geared towards
meeting goals that result in innovation. To be an efective concept and a useful tool,
innovation must fulfll a cycle of various stages in which leadership should be con-
veyed efectively in order to continue the cycle, otherwise the innovation process
may be interrupted in one of the stages, resulting in failure to reach the goal of
innovation.
43
The purpose of the innovation cycle is that it should be continuous, that is, self-
generated and that each time it is repeated it results in an innovative process, pro-
duct or service.
Cycle of innovation
Knowledge
creation
Technology
transfer
Marketing Clusters and
networks
Source: Philadelphia Chamber of Commerce, Connecting the Greater Philadelphia Innovation Economy, 2003.
Maturity
Conception
Knowledge
Formation
4. Innovation economy
Much of the success of an industry depends on the connectivity of its members,
which derives from the ability to transform economic, political and social relations
on a regional or global scale, which gives the industry greater reach. This is achieved
through the efective transmission of one stage to the next in the innovation cycle.
44
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Knowledge creation
Research, generation and
development of new ideas.
Technology transfer
Technical tests, business approach,
regulation and evaluation
of the efectiveness of the product and/
or services to be developed
Marketing
Start of production of
the product and/or service.
Cluster and networks
Self-assessment of processes,
setting of long-term sales
objectives and delivery of
the product or processes
to the public.
Maturity
Conception
Critical mass of research,
expansion of knowledge and
environments that promote
science and discoveries.
Adequate resources for production,
trained personnel, research and
development to provide
added value to products and
access to international customers.
New opportunities for
individuals in the regions
which give them incentives to
create new processes,
products, services or
companies; knowledge that
allows development and the
high value supply chain to
promote long-term growth.
Technology transfers through
universities and institutions
with mutual benefts and also
interdisciplinary and
collaborative interests that
promote and overcome
technological challenges.
Knowledge
Formation
For this cycle to be complete, each stage must have the following ingredients:
intellectual capital, human capital, fnancial capital, equity and connectivity.
These ingredients are crucial to developing the innovation cycle; however each
has some importance which should be evaluated individually to see if it is necessary
to improve its capabilities and so to improve its contribution to the innovation cycle.

Stages of the innovation cycle
47
5. TRM Working Group
5.1 Collection of data, analysis and
scope of study
The working group collected data and analyzed it in order to fnd out about the
current status of the Mexican advanced manufacturing industry and with the in-
tention of creating short and long term strategies and ways forward, towards a joint
strategy.
This data collection and analysis was carried out with a collaborative work sys-
tem, which allows the simultaneous communication of views by the participants, as
each person has a keyboard and these are connected to the central computer. This
system has the advantage of receiving anonymous statements, therefore the parti-
cipants are not inhibited, creating a platform of trust without censorship.
5.2 SWOT
As mentioned in previous sections, the orientation of the TRM working group is fo-
cused on building design, development and engineering process capabilities for the
products and materials in Mexican manufacturing. In this sense, it was decided to co-
ver the sub-sectors of design, engineering and advanced manufacturing in order to
give greater impact to the recognition of innovative applications and new technolo-
gies, making it possible to turn “Made in Mexico” into “Designed and manufactured in
Mexico.”
The above sub-sectors cover the development of capacities such as: design for
reliability/maintainability, design, simulation and modeling of advanced structures
including micro and nano systems, design for assembly, disassembly and recycling,
validation of large-scale systems, including non-destructive testing and non-contact
inspections, to name a few.
48
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Source: ProMexico Business Intelligence Unit, Results of the focus group session, 2009.
Opportunities Threats Weaknesses Strengths Implications
Increasing
academic and
industrial
linkages
Low
recognition of
Mexican design
Insufcient
quality
professionals
Horizontal
integration
of capabilities
BRIC bloc
(Brazil, Russia,
India and
China)
Creativity
Available
infrastructure
Worldwide
economic
instability
Growing
market
International
competition
High level
of design
imports
Poor
design
culture
Insufcient
industrial/
academia
alignment
Talent
(engineering)
Globalization
of technology
markets
(ofshoring)
Analysis of design
A SWOT analysis was prepared in order to understand the industry’s situation, from
which a diagnostic report was obtained for decision making in the sector.
The working group conducted a SWOT analysis of the sub-sectors of design, deve-
lopment and advanced manufacturing. The factors identifed gave rise, according to
their degree of development, to positive implications and at the same time issues inhi -
biting progress. Understanding the dual nature of the factors allows a deeper analysis
of the degree of momentum necessary to trigger a positive impact in the sector.
49
Source: ProMexico Business Intelligence Unit, Results of the focus group session, 2009.
Perception
that Mexico
cannot
develop
Growing
market
demand
Development
of new
sectors
International
competition
Economic
support
programs
Defcient
public
policies
Creativity
Lack of
installations
for testing and
prototypes
Human
resources
and talent
R+D
centers
for certifed
tests
Competitive
cost
Worldwide
economic
instability
Low
investment
in new
technologies
Graduates
lacking in
knowledge
Development
of suppliers
including
SMEs
Utilization
of Mexico as
a commercial
bridge
Analysis of engineering
Opportunities Threats Weaknesses Strengths Implications
5. TRM working group
The main strengths that support the design subsector in Mexico are those rela-
ting to the availability of human resources. Talent and creativity stand out as the main
factor in Mexican engineering. In second place, the growing market and the current
infrastructure available in the industry were identifed.

In contrast, the weaknesses involve factors such as a lack of quality professionals,
the poor design culture and poor alignment between industry and academia that lead
to a high level of design imports.
The main opportunities for Mexican design focuses on the relationship between
horizontal integration of capabilities worldwide and the globalization of technology
markets (the ofshoring trend). These opportunities, in turn, will be threatened by in-
creased international competition, mainly from emerging countries, adverse factors in
the international economy and the limited degree of recognition for Mexican design
worldwide.
50
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Source: ProMexico Business Intelligence Unit, Results of the focus group session, 2009.
Culture of
processes,
standardization
and quality
Workforce
Adverse
economic
factors
Defcient
public
policies
Low level
of R+D
International
competition
BRIC
block
Lack of
specialized
human
resources
Lack of
supply-chain
articulation
Capacity to
work with
technology
Increased
attraction
of DFI
Exploitation
of trade
agreements
Businesses’
search for
zones of higher
competitiveness
Proven
manufacturing
experiencea
Competitive
costs
Insecurity
and corruption
Analysis of advanced manufacturing
Opportunities Threats Weaknesses Strengths Implications
The SWOT analysis for the engineering sector identifed as its key strengths the
existing capabilities in relation to research and development centers doing certifed
tests and the cost competitiveness that the country has in relation to other nations.
These strengths are the main guidelines for the exploitation of the opportunities
presented by the growing global market demand for development and the emer-
gence and growth of new business sectors related to this sub-sector.
Conversely, the low level of investment in new technologies and the current
poor infrastructure for testing and prototypes exacerbate the danger posed by the
major threats identifed. These have to do with the perception of Mexico as a simple
trade bridge with a low capacity for development.
51
5. TRM working group
The advanced manufacturing sub-sector in Mexico is a sub-sector with a higher
level of experience and capability development. For this reason its main strengths
are related to topics such as: the DFI attracted in recent years, the current capacity
of the Mexican industry to absorb and work with technologies and the signing of
various trade agreements with diferent regions of the world.
The proven experience in the advanced manufacturing sector, especially in the
automotive industry, represents one of the most important opportunities in the
sector; in particular, the successful experiences of companies in Mexico and the ad-
vantage ofered by the country in terms of their total manufacturing costs. The cost
advantage is also a challenge, since although it puts the country in a unique position
to attract manufacturing projects, it is an ephemeral advantage, to the extent that
logistics and labor costs do not generate other centers of competitiveness. This may
lead to the fact that strategy should focus on developing capabilities to maintain
national competitiveness being overlooked, even when other countries can do it
more economically.
In contrast, the main threats identifed by the SWOT analysis are the adversities
generated by global competition, particularly those faced by the emerging econo-
mies. These threats will be reinforced if Mexico fails to overcome its main weaknes-
ses, which involve a low level of investment in research and development capabili-
ties.
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
53
6. Roadmap for technology insertion
6.1 TRM
The TRM is the result of analysis of the advanced manufacturing industry over a pe-
riod of 15 years, starting in 2004 with a projection to 2019. It is comprised of four
sections: trends and drivers, technology platforms, critical success factors and re-
sources.
6.1.1 Trends and drivers
This section presents the main trends and drivers of the world’s advanced manufac-
turing industry, which provide an overview of the various market drivers to consider
when defning the lines of future development.
Environmental

In recent years, the planet has sufered over-exploitation of natural resources
due to the expansion of economic activity. Equally, the heavy industrialization
of nations has caused drastic climate changes, the product of high-energy con-
sumption and high levels of carbon gas emissions, among other factors.
This has led some industries, including advanced manufacturing, to focus on ac-
tions that promote environmental conservation. Because of this, the TRM wor-
king group identifed global trends as well as new business opportunities for
manufacturing, arising from the growth of the low-carbon economy, the develo-
pment of more environmentally efcient technologies, the drive for and imple-
mentation of efcient processes of energy consumption, increased competition
for natural resources, new environmental regulations and increasing demand for
green products.
54
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Environmental trends in the sector worldwide
Political-legal
The development and growth of the industry of design, engineering and advan-
ced manufacturing will depend in large measure on trends of a political-legal
nature, which involve such issues as: regulations, dual-use technologies and har-
monization of international regulations, among others.
It will be observed, above all for the purposes of the market, that there will be
a proliferation of more stringent regulations, especially in the areas of the envi-
ronment and security. This phenomenon will have a regional focus which will
impose non-tarif barriers to inter-regional trade.
Another important aspect to consider is the system for the control of exports
and information for dual-use technologies, the purpose of which is to ensure the
non-proliferation of weapons of mass destruction. Countries interested in using
and developing state-of-the-art technology, professionals and goods, should
guarantee their peaceful or controlled use to allied countries.
Export control is necessary, both to attract investment, projects and dual-use
ofsets, as well as for security issues. Naturally, Mexico does not represent any risk
in the use of such technology; however, some industries have approached the
borderline in the utilization of dual-use technologies.
2016 2017 2018 2019 2012 2013 2014 2015 2008 2009 2010 2011 2004 2005 2006 2007
Strong industry action to combat
climate change
New business opportunities
for manufacturing due to the growth
of the low-carbon economy
Development of technologies
with greater environmental efciency
Development and implementation
of efcient energy consumption processes
Greater competition
for natural resources
New environmental regulations
Increased demand for green products
Source: ProMexico Business Intelligence Unit, 2010.
55
As part of the actions, work should be carried out on the establishment of a har-
monization of international regulations for the registration, monitoring, control,
safety and quality of manufactured products.
Likewise, the working group acknowledges future changes in the Law on Scien-
ce and Technology to encourage the creation of new products and knowledge-
based companies.
Political-legal trends in the sector at a global level
Social
The growth of demand in China and India represents a trend with multiple con-
sequences. On the one hand, the two countries represent potential markets for
manufactured products that their chains have not yet been able to develop and
which, owing to the size of these markets, are highly attractive for various pro-
ducts in the world. Moreover, this trend will be a major driver for attracting in-
vestment and manufacturing towards these centers, with the consequent loss to
areas with less important markets.
The most important strategic implication to be watched will be (although today
it is already visible in some cases) that these large markets will create standards
and business models that favor their own development and will act as inhibitory
strategies for other players in the world; paradoxically there is a great and rising
shortage of engineers, especially in countries where the manufacturing structure
needs them. These countries with economies based on innovation have not found
sufcient human resources to meet that demand from their own populations.
2016 2017 2018 2019 2012 2013 2014 2015 2008 2009 2010 2011 2004 2005 2006 2007
Stricter regulations / increased security
Common international regulatory
frameworks by region
Export control systems /
dual-use technology
Harmonization of international regulations
Source: ProMexico Business Intelligence Unit, 2010.
6. Roadmap for technology insertion
56
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
In this situation, Mexico has an advantageous scenario that combines a large
supply of human resources and engineering and on the other, a experience in
the production of highly sophisticated goods, with world-class levels of quality.
Gradually Mexican industry has been able to ofer suitable conditions for investments
in design, product development and R&D. These conditions have helped attract
companies and projects in advanced manufacturing, design and engineering in recent
years.
However, despite the advantage represented by the manufacture and development
of engineering and design projects in Mexico, this is not the general perception.
Social trends in the sector at a global level
2016 2017 2018 2019 2012 2013 2014 2015 2008 2009 2010 2011 2004 2005 2006 2007
Growing demand from China and India
Tendency to develop projects in manufacturing,
not engineering, with large volumes in China
Withdrawal of engineering capability
in the United States and Europe
In Mexico there is more manufacturing than engineering
Mexico is the most competitive country for manufacturing costs
Increased wage competition with low-cost countries
Large number of engineering graduates in Mexico
Onset of the demographic dividend
(greater supply of human resources, without implying quality)
Increased investments in intangible assets
(design, brand, human capital, product development, R+D)
Remote working trend through use of ICT
Low recognition of the development capabilities
of Mexican engineering
Professional work with higher remuneration
Source: ProMexico Business Intelligence Unit, 2010.
57
2016 2017 2018 2019 2012 2013 2014 2015 2008 2009 2010 2011 2004 2005 2006 2007
Outsourcing to companies that require no learning curve
Working with suppliers with broad capabilities
and experts who do not require supervision
Economic recession
Use of suppliers with global presence and facilities
close to global customers
Strong cost pressure
In Mexico, support is given frst to production
and then to product development
Manufacturing sector growth
Stable exchange rate (USD-MXP range between 12.99-14.23)
Worldwide growth of value chains
(outsourcing of goods and services)
Greater emphasis on closed-loop value chain development
Increase in demand for SMEs with specialized
external technologies and services
Increased market share through
specialization and cost reduction
Loss of capacity to design and produce capital goods in Mexico
Increase in the transfer of particular
tasks to subsidiaries in low-cost areas
Increased product diferentiation
Source: ProMexico Business Intelligence Unit, 2010.
6. Roadmap for technology insertion
Economic
The trends in the economic sphere present great opportunities and challenges
that should be considered.
The importance of outsourcing and the increasingly demanding nature of con-
tractors create a more competitive environment, demanding ever-lower costs
and seeking suppliers of subcontracted services with a high level of expertise
that ensure operation without delay and long learning processes.
In global industry there is a particular interest in fnding the most complete and
robust supply chains possible, both in infrastructure and process capabilities,
such as certifcations and qualifed talent, looking to establish itself under the
best conditions.
The ongoing search for optimal costs faces the entire industry as it locates itself
in places where it can take advantage of the exchange rate or cheaper sources of
fnance, and gradually abandon those regions, which increase its cost structure.
Economic trends in the sector worldwide
58
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Technology
In the feld of technology, the trends anticipate the development of more sophis-
ticated models and prototypes, as well as more structured development proces-
ses, which require the creation of a solid platform to raise the technological level
of Mexican manufacturing and the efciency of processes employed. The inter-
est in reducing times and costs in the engineering and development cycle will
prompt new investment in R+D+i, with the objective of obtaining higher greater
benefts through improved time to market and in the time needed before new
product lines become proftable.
A more intensive use of information technology is considered to be a fundamen-
tal tool to improve not only certain business operations, but also to increase the
efciency of the entire manufacturing process and to reduce the development
time of new products. Advanced materials, nanotechnology and biotechnology
are some of the areas in which an early progression to advanced manufactu-
ring is envisaged, which will be reinforced by technological changes such as the
large-scale migration to electric and hybrid engines in the automotive industry.
Likewise, the development of new information technologies, especially those
that ofer support to telecommunications and Internet product development,
will result in various areas of opportunity for the sector.
59
For selected countries
0 1 2 3 4 .5 1.5 2.5 3.5
1995 2007
Index of technological sophistication
OECD
Philippines
Hong Kong, China
Taipei, China
Korea
China
Japan
Singapore
Malaysia
Thailand
Mexico
Costa Rica
Asia (except Japan)
Mauritania
India
Brazil
South Africa
Indonesia
Latin America
Colombia
Argentina
Sub-Saharan Africa
Chile
Peru
Source: OECD, Perspectives on Global Development, 2010.
6. Roadmap for technology insertion
60
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
6.2 Management of talent
Design, engineering and advanced manufacturing will require a workforce with higher ca-
pabilities in engineering and science, to be complemented with skills and competences
that enable good performance in diferent disciplines. Internationally, we are seeing a clear
reduction in sources of talent for scientifc and engineering disciplines, mainly in the deve-
loped world, also the new generation shows very little interest in these professional areas.
This presents a scenario where there is ferce competition for talent, which extends from in-
dustrialized countries to rapidly developing areas, in which Mexico plays an important role.
The national perspective takes in the fact that Mexico has become the reservoir of talent
for North America, generating more engineers than any other country on the continent,
making it a very attractive alternative for companies that foresee complications arising for
their operation derived from a shortage of talent. Eforts in human capital management
must be focused on identifying high-level professionals, on the development of personnel
in accordance with the requirements of the areas of advanced manufacturing that will be
relevant according to the analysis in this document and on the retention of national talent.
Sector talent management trends at a global level
2016 2017 2018 2019 2012 2013 2014 2015 2008 2009 2010 2011 2004 2005 2006 2007
Reduction in the sources of talent in developed countries
Decreased emphasis on master’s degrees
in advanced manufacturing
New generations less interested in engineering
and science at on a worldwide level
Intense competition for talent
Growth in sources of talent in rapidly developing
countries, but with a lack of skills
Greater importance of competencies
and values in recruitment
Reduced loyalty, as the most capable
people may change jobs rapidly
In advanced sectors, engineering is one area
where drop-outs are increasing
High-level professionals will have greater authority
and decision-making ability in the job market
Higher value placed on intellectual capital
and knowledge management
Lowering of standards for recruitment,
focus on training and ftness
Extension of virtual collaboration schemes (BPO + design)
Source: ProMexico Business Intelligence Unit, 2010.
61
6.3 Defnition of strategic milestones
The setting out of strategic milestones is one of the cornerstones for the defnition
of the sector’s strategy. The TRM working group for design, engineering and advan-
ced manufacturing defned the principal short, medium and long term milestones.
Thus the principal strategic milestones set by the Mexican advanced manufac-
turing industry are:
Short-term (2010-2011)
Incentive program for capacity building in design, engineering and advanced ma-
nufacturing.
Development of talent. Support for fexible training programs (academic
programs, technical and industrial scholarships, nationally and internationally),
to ensure that 15 percent of engineering graduates quickly become integrated
into industry R+D+i functions.
Creation of infrastructure. Supporting the development of infrastructure for
design, engineering and advanced manufacturing, to achieve at least three
centers or networks of excellence at national level covering the entire process
and with an orientation to user sectors of aeronautics, automotive, electrical-
electronic, domestic appliances, energy and so forth.
Medium-term (2012-2015)
Creation of a revolving PPP (Public-Private-Partnership) fund of one billion pesos to
support the area of design, engineering and advanced manufacturing.
Development of talent. Creating a database of notable engineers in design,
engineering and advanced manufacturing, recognized (certifed or approved)
by their peers in other countries, at least 30 percent carrying out activity with a
high R+D+i content.
Creation of infrastructure. Consolidation of three centers or networks of excellence
in design, engineering and advanced manufacturing, which meet all international
requirements for product design and validation for their respective original
equipment manufacturers (OEM).
6. Roadmap for technology insertion
62
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Long-term (2015-2020)
To increase the infrastructure capacity in the country to carry out physical and virtual
testing, making use of existing capabilities to consolidate six world-class manufac-
turing and design testing centers with their respective networks in Mexico (fve per-
cent of GDP contributed by this sector).
Development of talent. Consolidation of Mexican engineers with high international
prestige.
Creation of infrastructure. Global recognition of the three centers or networks of
excellence in design, engineering and advanced manufacturing, generating at
least one percent of patents worldwide in their respective felds.
Formation of partnerships and knowledge transfer units. Global scope
for the relationships and projects managed by partnership units, with 60
percent of their projects in interdisciplinary and international groups, and
with 30 percent of resources managed destined for research.
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
65
7. Participating bodies
National Metrology Centre (CENAM)
CENAM is the national laboratory of reference for measurements. It is responsible for
establishing and maintaining national standards, providing metrological services such
as calibration of instruments and standards, as well as certifcation and development
of reference materials. It also works with national laboratories and international
organizations involved in metrology in order to ensure international recognition of
national standards in Mexico and, consequently, to promote acceptance of our country’s
products and services.
Because of its leading role in the advanced manufacturing sector, CENAM was invited
by ProMexico to preside at the TRM meetings for design, engineering and advanced
manufacturing.
ProMexico
ProMexico is the Mexican Federal Government’s body in charge of strengthening
Mexico’s participation in the international economy. To do this it supports the export
activity of frms established in the country and coordinates actions to attract direct
foreign investment to Mexican soil. ProMexico was established by presidential decree
in 2007 as a public trust under the auspices of the Ministry of the Economy. It has a
network of 25 ofces in Mexico and 33 ofces abroad.
ProMexico has invited the principal public and private actors in the advanced
manufacturing industry in Mexico to make up the TRM working group with the
purpose of facilitating the defnition of a national strategy for the industry, in order
to increase its exports.
Ministry of Economy (SE)
The SE is the Federal Government department that promotes the creation of quality
jobs and economic growth in the country through the promotion and implementation
of public policies that boost competitiveness and productive investment.
66
ROADMAP FOR DESIGN, ENGINEERING AND ADVANCED MANUFACTURING
Designed in Mexico
Roadmap for design,
engineering and advanced
manufacturing

doc_892048127.pdf