Tijuana's leaders see start of economic rebound
From The San Diego Tribune
By Sandra Dibble
TIJUANA - "Tijuana's boom years of the late 1990s are long gone, as the city has struggled to emerge from the global economic crisis in recent years.
But now government and business leaders are pointing to hopeful signs that Tijuana, with an estimated 1.75 million residents, is moving forward again.
A key indicator is the more than 25,000 new jobs registered by Mexico's Social Security Institute during the first eight months of this year, though
unemployment has continued to hover between 6 percent and 7 percent.
The city's economy is expected to grow by 3 percent to 4 percent in 2012, according to the Business Coordinating Council, an umbrella group of the
city's main business organizations.
And the industrial sector is seeing the return of some companies that had moved to China and the introduction of higher value-added services.
Tijuana "is gradually recovering," said Miguel Velasco Bustamante, Tijuana's secretary of economic development. "In 2011, we had a recovery, and in
2012, that recovery continues."
More than 385,000 jobs in Tijuana were registered with Mexico's Social Security Institute as of August. But many other workers - more than one in
five, or a total of 117,000 - were employed in the city's informal sector (businesses with no formal audits), according to information for January
through July from Tijuana's Municipal Planning Institute.
"There's a lot more positive outlook," said Flavio Olivieri, director of the Tijuana Economic Development Corporation, known as DEITAC. "There's a
more realistic perspective of the future and more certainty of the things we need to do to get there."
Next month, the 10-day Tijuana Innovadora expo will highlight some of the sectors where business and political leaders are pinning their hopes, from
software development to aerospace manufacturing to culinary arts.
The following is a look at five sectors in Tijuana that are commanding attention.
Automotive
Baja California's automotive industry last year had 82 maquiladoras that employed 25,789 people, according to the AXIS Strategic Intelligence Center.
Tijuana's share was 51 companies with 14,414 positions.
A key development this year was the Korean company Hyundai's groundbreaking for a $131 million aluminum foundry for automotive parts. The facility is
expected to open in 2014.
While other companies produce components, Toyota has been building complete Tacoma pickups in eastern Tijuana since 2004. Starting with a production
level of 30,000 trucks a year, "this year we will get up to 54,000," said Joe Da Rosa, president of Toyota Motor Manufacturing de Baja California.
He said reliable and efficient cross-border rail transportation is vital to the automotive sector's growth in Baja California, and has been advocating
for rehabilitation of the Desert Rail line connecting the border to Plaster City.
Da Rosa has found support from Manuel Guevera of Tijuana's Economic Development Council. "We need to help them better move their goods," Guevera said.
Aerospace
Baja California is a key player in Mexico's aerospace industry, with the great majority of aerospace maquiladora companies being U.S.-owned and a
modest but steady growth of Mexican suppliers.
Last year, the state had 47 aerospace companies with more than 12,600 employees, according to the Tijuana-based AXIS Strategic Intelligence Center.
About half of those businesses were in Tijuana - 23 companies with 5,620 employees - and most of the rest were in Mexicali, the state capital.
(Included in this category is the defense industry.)
Among their products: cable harnesses, electronic components, hoses, seals and other aircraft parts such as overhead bins.
Along with Mexico City, Guadalajara, Queretaro and Monterrey, Baja California has been critical to the growth of Mexico's aerospace industry.
Tomás Sibaja, executive president of the state's aerospace cluster, said growth rates of more than 25 percent in recent years have exceeded the
national average. He links the regional industry's expansion to its close collaboration with the government sector and universities, which have
incorporated aerospace engineering into their academic programs and forged links with the aerospace industry.
Information technology
A small but rising number of technology-oriented businesses have emerged in recent years. Their future growth in large measure hinges on their ability
to draw clients from the United States and other regions of Mexico.
Last year saw the opening of the Mexico Innovation Development Hub, a private accelerator that houses close to 90 engineers specializing in software
development and graphic and digital design.
Another new center is Boxel Interactive, which specializes in digital graphic arts and animation.
A significant development this year was the launching of the 100,000-square-foot Baja Information and Technology Center, a $5 million project that
aims to gather small, startup tech companies under one roof. The center was established with funding from Mexico's federal Council on Science and
Technology and the Baja California government. It's operated by the local chapter of Canieti, the national chamber for the electronic,
telecommunications and computer-science industries, in collaboration with the Autonomous University of Baja California and the state government.
Claudio Arriola, Canieti's past president for northwest Mexico, said there are more than 100 I.T. software companies in Tijuana, most of them
employing fewer than 10 employees.
"The main advantage to their being small is that they're more flexible. Usually, they're more up to date on new technologies," Arriola said. "The
negative side is that if they want to start getting new customers in the U.S., they probably need to learn to work together or get bigger."
Specialty tourism
Tijuana's tourism promoters have been touting two key sectors - culinary arts and medical services - as they work to reawaken the cross-border segment
of visitors.
While there are no precise numbers, the consensus is that the tourism industry is experiencing a revival, creating jobs not only in food service and
processing but also in primary fields such as agriculture and fishing.
For tourism boosters, the growing international reputation of Tijuana's cuisine has created priceless benefits. "It's something that's very
promotable, very positive," said Alan Bautista, director of Tijuana's Tourism and Conventions Committee.
In the medical-services industry, many Tijuana health providers have been hit hard in recent years by the downturn in U.S. visitors to Baja
California. Mexico's federal government has been touting medical tourism, and Tijuana would be poised to become a key player if U.S. health care costs
rise markedly.
A 2011 study by the Baja California Tourism Secretariat showed that more than 282,000 "health tourists" traveled to Tijuana in 2010 for treatment,
accounting for 62 percent of the state's total.
One struggle has been uniting the different, and often rival, groups involved in medical tourism. "Right now, there's a lot of voices and opinions and
people doing promotions in the U.S.," Bautista said. "We're trying to make people come together with one strategy to project the same message."
Medical devices
Medical-device companies in Tijuana produce everything from pacemaker components to catheters, IV sets and orthopedics. Though many are U.S.-owned,
other foreign investors include Iceland, Sweden, England and New Zealand.
ProMexico, the Mexican federal agency that promotes trade and investment, in a recent report listed Baja California as the largest of seven
medical-device manufacturing clusters in Mexico. The state accounted for roughly 50 percent of the sector's exports.
Baja California had 65 maquiladora companies with 41,649 jobs in medical-device manufacturing last year, according to the AXIS Strategic Intelligence
Center. Tijuana accounted for 38 of those companies and 31,000 jobs.
Tijuana's economic development secretariat estimated that the city's medical-device industry creates an annual market demand of close to $1.58 billion
in materials such as plastics and services such as sterilization.
A key step forward took place this year - the groundbreaking ceremony for a Avantti MediClear facility expected to open in 2013. That company will use
electro-beam technology to sterilize medical products."
“Travel is fatal to prejudice, bigotry, and narrow mindedness.”
—Mark Twain
\"La vida es dura, el corazon es puro, y cantamos hasta la madrugada.” (Life is hard, the heart is pure and we sing until dawn.)
—Kirsty MacColl, Mambo de la Luna
\"Alea iacta est.\"
—Julius Caesar
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