Chihuahua’s StateInitiative of Competitiveness

Ing. José González Baeza, PhD

Commissioned for Competitiveness

Initiative “Chihuahua toward Competitiveness”

Strategy of short term

Clusters’ strategy

Competitive position

Objectives

Strategy for long term

Vision

Values Mision

MONITORING

S IY NS DT IE C

M A T OO RF S

Philosophy

VISION

The project visualizes that Chihuahua will become the most competitive state of Mexico as a consequence of acting in a culture of continuous improvement that permit to increase the good performance of the indicators of competitiveness, achieving thus to elevate people´s quality of life who live in Chihuahua.

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VALUES

HUMANISM

CONTINUOUS IMPROVEMENT

INNOVATION AND ENTREPENEURSHIP

SUSTAINABLE DEVELOPMENT

EFFICIENT PUBLIC MANAGEMENT

TRANSPARENCY

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MISION

Consolidate Chihuahua’s State as a world competitive region, creating a socioeconomic environment that permit the people, business organizations from civil society and public institutions, to include the conditions of growth and development that differentiate them from the rest of the country, achieving that the Chihuahua’s habitants feel themselves proud of their state.

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CURRENT COMPETITIVENESS

Posición EGAP-ITESM, 2007 IMCO, 2006

1 Nuevo León Distrito Federal2 Distrito Federal Aguascalientes3 Baja California Sur Nuevo León4 Baja California Baja California Sur5 Coahuila Baja California6 Chihuahua Chihuahua

7 Quintana Roo Quintana Roo8 Tamaulipas Tamaulipas9 Aguascalientes Coahuila

10 Campeche Querétaro

Chihuahua’s State competitive position at national level.

National competitiveness of Chihuahua’s main cities

N° CIDE, 2007 N° IMCO, 20061 Monterrey 1 Aguascalientes2 Chihuahua 2 Chihuahua3 Ciudad de México 3 Guadalajara4 San Luis Potosí 4 Ciudad Juárez5 Ciudad Juárez 5 Monterrey6 Tijuana 6 Ciudad de México7 Aguascalientes 7 Querétaro8 Hermosillo 8 Mexicali9 Saltillo 9 Tijuana

10 Toluca 10 La Paz

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From: (CIDE) Center for Teaching and Research on Economics, Mexican Institute for Competitiveness. (IMCO)

FUNDAMENTAL OBJECTIVES

1. Chihuahua should be the most competitive state of the Mexican Republic in the year 2010.

2. Local, national and international business sector should identify Chihuahua as the most competitive state in Mexico to doing business; as a consequence of its high quality of life.

3. All Chihuahua’s citizen should feel proud of living and practicing the competitive values, besides perceiving that Chihuahua is the best place from Mexico to live.

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Long Term Competitiveness

• Competitiveness in long term is supported by:

1) The adoption of technological innovations.

2) The formation of human capital.

COUNCIL FOR THE ECONOMIC DEVELOPMENT OF CHIHUAHUA (CODECH)

STRATEGYC INITIATIVES

A. Regional Economic Specialization.

B. Pertinent economic infraestructure.

C. Innovative business of highly aggregate value.

D. Associativity and entrepeneurness.

E. Development and technological education.

F. Environmental and social commitment.

A. Regional Economic Specialization

Councils of Economic Development in each region.

Exercise of planning continuing the methodology of the strategic prospective in each region

Impulse of certain clusters in each region according to their vocation and regional specialization.

The development of the most lagged regions is promoted

The regions are the base of development.

B. Pertinent economic infraestructure

Modernization of frontier bridges. Program of Strategic fiscal places and development of duty-free zones Acquisition of industrial reserves. Improvement of complexes and industrial parks. Multimodal highway Sinaloa-Chihuahua-Texas Construction of Regional Airport for Copper Canyon in Creel. New highways in all the State to improve the communication inter and intra

regional and with other states of Mexico. Investment in urban infrastructure in the main cities of the State State Hydraulic Project. Significant investment in hydraulic infrastructure in

Ciudad Juarez (Conejos-Medanos aqueduct’s construction) Chihuahua and the Copper Canyon Region (System of conduction from the Situriachi dam).

Besides the six industrial clusters the State search to be positioned in two emerging areas.

Businesses of aeronautic sector established in Chihuahua

Chihuahua occupies the third national level position. The main competitive states are Querétaro, Nuevo León, Baja California, Sonora and Coahuila

1) Aerospace industry

C. Innovative Business of highly aggregate value

Company Products

Honeywell aerospace Turbines production

Labinal Safran Group Harness, Engineering and design

SGI-Electro Switch Electronic

Textron Cessna Harness

Aerosan Metalic structures

Cambrian Industries Plotted

Capsonic Automotive & Aerospace Turbine's parts

Hawker Beechcraft Corporation Helycopters

Zodiac Emergency products

Air Crussiers Airplane's parts.

The businesses market that hire technology

management will surpass US$43,000 millions in

Mexico, figure upper 9% to the registered in 2007.

Chihuahua is one of the states leaders in the

attraction of that kind of businesses.

Example: EDM in Ciudad Juárez. Provides

technological solutions with highly specialized

equipment, it works in systems areas, accounting

and corporative finances. Actually it has more than

3,000 employees, and a great quantity of them are

engineers and bookkepers.

2). Information and Communication Technologies (ICT’s)

C. Innovative Business of highly aggregate value

D. Research and Development Centers

A. Industria Aeroespacial

The technological development is not exclusive of educational institutions. In Chihuahua there are centers for design and applied research from transnational enterprises such as Delphi and Visteon

Economic Activity Research CenterAgriculture, cattle, wood Agriculture and Forestry Sciences Faculty. University of Chihuahuaand food industry Agroindustries Faculty. University of Chihuahua

Chemistry Science. University of ChihuahuaBasic and Veterinary Sciences. University of Juarez CityInstitute for National Research on Forestry, Agriculture and Cattle (INIFAP)Center for Research and Development on Food Industry (CIAD)

Minery and industry for non Civil Engineering Faculty. University of Chihuahuametallic minerals Civil Engineering and Basic Sciences. Institute for Tecnology. University of Juarez CityAutomotive and High Delphi Center for Research and DevelopmentTecnology Industry Visteon Center for Research and Development

Industrial Engineering and Manufacture & Computer and Electricity Departments. Institute for Engineering and Technology. University of Juarez City.

Nanotechnology Center for Applied Research on Science and Technology. Institute for Engineering and Technology. University of Juarez City.

High Technology Innovation and Technology Park. Tecnologico de Monterrey. Campus Chihuahua

1) Park of Innovation and Transfer of Technology.

ITESM Campus Chihuahua

The innovation and technology transference park is one of the most important project in the field of Technological Development.

The park is built with an investment of 90 millions pesos shared between federal subnational and local, as well as the ITESM Campus Chihuahua and private sector.

It will support 30 small and medium businesses of High Technology.

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Company Research fieldSACEN Metrology LaboratorySIMS Control and automatizationVISTEON Automobile designITNOVA Software developmentFREESCALE Semicontuctors and SoftwareTESTING Software automatizationTGC Specialized softwareDINAMICA Networks and telecomunicationsIn process to sign an agreement

NEORISTechnology information for business

TDE Networks and telecomunicationsTEXTRON AerospaceLABINAL AerospaceHAWKERBECHCRAFT AerospaceHONEYWELL Aerospace

Chihuahua’s Competitiveness in the short term

1) A dynamic local economy

2) Effectiveness and character of its institutions.

3) Infraestructure quality and quantity.

Chihuahua has a diversified economic structure supported by four economic sectors: agriculture, manufacturing industry, construction and commerce, restaurants and hotels.

The driving motors of state economic activity in the last fifteen years have been the manufacturing industry and the tourist-commercial sector.

Chihuahua has an efficient government that occuppies the second place in Mexico by the income generated from local taxes.

Chihuahua has an excellent infrastructure: highways, airports, and so on.

A. Employment evolution in 2004-2008 Chihuahua’s State. Insured in IMSS

In the present administration 96.881 formal jobs have been created in Chihuahua. In recent months a small decrease has been registered due to the effects of the U.S. recession on Chihuahua.

The manufacturing industry has contributed with 40.021 formal jobs in the present administration, more than the 40% of the new jobs created. In recent months some difficulties have been faced due to the U.S. recession

From: Center for Economic and Social Information. Ministry of Industrial Development.

Date Total Employment Accumulate Manufacturing Employment Accumulatesep-04 671,523 311,338sep-05 701,664 30,141 335,657 24,319sep-06 743,857 72,334 355,096 43,758sep-07 775,621 104,098 363,793 52,455feb-08 768,404 96,881 351,359 40,021

B Foreign Direct Investment (FDI) by main states, 2005-2007 (in million dollars)

From: General Direction of Foreing Direct investment. Minister of Economy-2008.

Lugar Estado 2005 2006 2007 2005-2007 Porcentaje1 Distrito Federal 8,695.3 8,609.6 10,112.8 27,417.7 47.32 Nuevo León 4,822.0 1,481.2 1,809.6 8,112.8 14.03 Chihuahua 1,484.9 1,434.7 1,134.2 4,053.8 7.04 Baja California 1,098.9 931.1 840.0 2,870.0 5.05 Estado de México 799.3 1,273.2 477.1 2,549.6 4.46 Michoacán 91.5 180.7 1,939.3 2,211.5 3.87 Jalisco 1,238.1 618.7 228.3 2,085.1 3.68 Tamaulipas 354.5 503.2 400.2 1,257.9 2.29 Sonora 235.3 280.1 609.3 1,124.7 1.9

10 Puebla 404.8 386.4 156.7 947.9 1.6Total 10 Estados 19,224.6 15,698.9 17,707.5 52,631.0 90.8México 20,822.7 17,425.1 19,729.2 57,977.0 100.0

C. GDP Distribution by great division of economic activity.Chihuahua, 2006

Economic activity GDP Participation (%)Farm cattle, sylviculture and fishing 6.4Mining 0.8Manufacturing industry 18.7Construction 3.6Electricity, gas and water 0.9Commerce, restaurants and hotels 34.1Transport, storage and communications 12.9Financial services, real estate agencies 11.6Communal services 12.2

D. Chihuahua’s manufacturing GDP distribution, 2006.

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Manufacturing division GBP participation (%)Food, beverages and tobacco 10.4Textile industry and clothing 10Wood industry 5.9Paper, press and editorial 2.9Chemical substances by-products of the petroleum 3.2Mineral not metallic 8.4Basic metallic industry 0.9Metallic products, machinery and equipment 52.5Another manufacturing industries 5.8

Clusters consolidated: Electronic industry and telecommunications Automobile industry & autoparts Farm products & food industry Tourism Construction materials Furniture Industry

Emergin clusters: Aerospace industry/ Information and Communication Technologies (ICT`s)

Clusters State of Chihuahua

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INDICATORS SYSTEM

Chihuahua’s index

95 variables for Economic, Social and Infraestructure issues.

Variables that appear in the index realized by IMCO, EGAP and AREGIONAL.

Impact measurement of the public policies in competitiveness indicators.

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