VIII - 2013

Negociospara exportadores

The Lifestyle FeatureNatures Gifts to Mexico: 10 Natural Wonders Not to Be Missed

Mexico in the WorldMexico: A Strategic Partner for NAFTAs Creative Industries

Creative industries:

the Mexico advantage

The government of Mexico has set out to transform our country based on five major national goals: to have a peace-ful, inclusive, well-educated, prosperous and globally-responsible Mexico.

In order to build the prosperous Mexico we long for, we must gener-ate sustained high eco-nomic growth that re-sults in more and better jobs that will improve the quality of life of our population.

Mexico has a solid foundation on which to attain these goals: healthy public financ-es; a manageable debt level; a budget with no fiscal deficit; a respon-sible and autonomous monetary policy, as well as adequate inter-national reserves.

Our macroeconomic stability and institution-al strength are enriched by a wide sociopolitical consensus that favors important transforma-tions required to boost the development of our country. Through the Pact for Mexico, two constitutional reforms have been approved: one in education that will enhance the quality of teaching, and another in telecommunica-

tions, radio broadcasting and economic compe-tition that will open up the sector and ensure competition throughout our economy. Further-more, the Congress is analyzing a financial over-haul to increase the level of credit and make it

more affordable.Mexico offers cer-

tainty and confidence to investments, a business climate favoring produc-tivity and competitive-ness, and an ambitious plan to further develop infrastructure. Moreover, the countrys strategic geographic location and optimal legal framework for international trade, through a network of trade agreements with 44 countries, give us access to a potential market of over one billion people.

Mexicos exceptional economic and geograph-ic conditions, as well as the talent and quality of its human capital, make it the ideal destination

for new productive capital to flourish.This is the time to invest in Mexico. Inves-

tors will find the government of Mexico and ProMxico to be allies committed to the success of projects that create quality jobs and prosper-ity for the country.

Enrique Pea NietoPresident of Mexico

Table of Contents August 2013

Special ReportEntia

Biaani

Mexicos PartnerUDCI

Boxel

Astrolol

Gran Tiki Games

Motion Control

Don Porfirio

Machete Producciones

Baja Studios

Redrum

COVER FEATURECreative

Industries:

The Mexico AdvAnTAge

From ProMxico

Mexico in the WorldMexico: A Strategic Partner for NAFTAs Creative Industries

Guest OpinionFilm in Mexico:

An Industry with a Golden Future

Negocios ReportThe National Strategy for the Film and Audiovisual Industry: A Road Map

to the Future

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Special FeatureTurkey and Mexico as Priority Partners:Trade Diversificationand Emerging Markets in Asia

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Briefs6

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Guest OpinionCreative Intelligence: Design as an Agent

for Change in Mexico

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The Lifestyle The CompleTe Guide To The mexiCan Way of life

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Mexico, a Home Away from Home

The LifestyleBriefs

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When I dance, I am reliving my whole lifeInterview with Esteban Hernndez

The Strains of Mexico the Whole World is Singing

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Nelson Vargas, Poseidon of Mexicos Swimming Pools

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Natures Gifts to Mexico:10 Natural Wonders Not to Be Missed

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Business TipsThe Relevance of the Creative

Industries in Mexico

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Frompromxico.

Creativity has always been a key component of the Mexi-can culture. Thus, our human capital is enriched with two extremely powerful features:

talent and innovation.These features have been responsible for

boosting the growth of Mexicos creative in-dustries including video game development, digital animation, and film and television production, amongst others, making them absolute box-office hits on a global scale.

We have great news to share with you on this field. First of all, since the IT sec-tor is a cornerstone for the creative indus-tries, we are glad to announce that we will be the next venue of the World Congress on Information Technology in 2014. This congress is the worlds greatest interna-tional IT event and hopefully will open new opportunities for Mexicos global al-liances in the creative industries.

We are also working hard to create a Digital Creative City in Guadalajara, with the aim of boosting the creative industries in Mexico. This project will be the first of its kind in Latin America and could be described as a global hub for digital media development, within a world-class technology environment.

In terms of digital content development, the country ranks as one of the most com-petitive places in the globe. It stands out as the sixth largest exporter of new media. Fur-thermore, Mexico is the most competitive destination in the Americas for software de-sign, video games and digital entertainment.

Regarding the film industry, Mexico is home to one of the biggest markets world-wide. Both local and foreign film productions have prospered in Mexico thanks to the coun-trys highly-recognized talent, competitive costs, scenic variety, proximity to internation-al key markets, as well as the public policies and incentives that the Mexican government has granted to the creative industries.

Mexican film entertainment products are exported to over 100 countries. More specifically, Mexico is poised to become a global leader in the production of material for the Spanish-speaking market, given the increasing need for specialized content that better supplies this fast-growing segment.

Today, Mexican human capital with its talent and innovation capabilities is avail-able for anyone seeking to succeed in the ever more profitable creative industries, as a platform which grants the necessary tools to develop highly-innovative global proj-ects which are based on creativity.

Welcome to Negocios!

Francisco N. Gonzlez DazCEO

ProMxico

Para exportadores

Desde ProMxico

La Alianza del Pacfico a ojos de Mxico

Una bebida de Mxico para el mundo.ProMxico y las empresas exportadoras de tequila

La franquicia como modelo de crecimiento: lecciones de Mxico

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ProMxicoFrancisco N. Gonzlez DazCeo

Karla Mawcinitt Buenoimage and Communications General Coordinator

Sebastin Escalantedirector of publications and Contentsebastian.escalante@promexico.gob.mx

Advertisingnegocios@promexico.gob.mx

Natalia HerreroCopy editing

download the pdf version and read the interactive edition of Negocios ProMxico at: negocios.promexico.gob.mx

This publication is not for sale. Its sale and commercial distribution are forbidden.

Negocios ProMxico ao 6, nmero VIII, agosto 2013, se termin de im-primir el 9 de agosto de 2013, con un tiraje de 13,000 ejemplares. Impresa por Ca. Impresora El Universal, S.A. de C.V. Las opiniones expresadas por los autores no reflejan necesariamente la postura del editor de la publicacin. Queda estrictamente prohibida la re-produccin total o parcial de los con-tenidos e imgenes de la publicacin, sin previa autorizacin de ProMxico. Publicacin Gratuita. Est prohibida su venta y distribucin comercial.

ProMxico is not responsible for inac-curate information or omissions that might exist in the information provided by the participant companies nor of their economic solvency. The institution might or might not agree with an authors state-ments; therefore the responsibility of each text falls on the writers, not on the insti-tution, except when it states otherwise. Although this magazine verifies all the information printed on its pages, it will not accept responsibility derived from any omissions, inaccuracies or mistakes. August 2013.

Negocios ProMxico es una publicacin mensual editada en ingls por Pro-Mxico, Camino a Santa Teresa nmero 1679, colo-nia Jardines del Pedregal, Delegacin lvaro Obre-

gn, C.P. 01900, Mxico, D.F. Telfo-no: (52) 55 54477000. Pgina Web: www.promexico.gob.mx. Correo elec-trnico: negocios@promexico.gob.mx Editor responsable: Gabriel Sebastin Escalante Bauelos. Reserva de dere-chos al uso exclusivo No. 04-2009-012714564800-102. Licitud de ttulo: 14459. Licitud de contenido: 12032, ambos otorgados por la Comisin Ca-lificadora de Publicaciones y Revistas Ilustradas de la Secretara de Gober-nacin. ISSN: 2007-1795.

BRIEFS BRIEFS

VANGUARD LOGISTIc SeRVIceS

Multinational port operating giant Hutchison Port Holdings (HPH) will invest 1.5 million usd to improve logistical capabilities at the port of Ensenada on Mexicos northwestern coast. Upgrades include the installation of a new container crane that boosts capacity while reducing carbon emissions.

www.hph.com

LOGISTICS

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MANUFAcTURING IN THe BORDeR

CONSUMER GOODS

DUPONT eXPANDS ITS TITANIUM DIOXIDe PLANT

US chemicals giant DuPont will invest 500 million usd to increase operating capacity at its production plant in the northeastern state of Tamaulipas. The major expansion is aimed at making the site the worlds second largest producer of titanium dioxide.

www.dupont.com

CHEMICAL3M: A SOLID LONG-TeRM BeT

US-based diversified manu-facturing multinational 3M will invest 400 million usd in its Mexico operations over the next five years. Projects include expanded output of products for the health, auto-motive and telecommunica-tions industries at the compa-nys plant in the northeastern state of San Luis Potos.

www.3m.com

MANUFACTURING

British consumer goods manufacturer Reckitt Benckiser will invest 10 million usd to open a new production facility in the northern border city of Tijuana, Baja California. The company currently has operations in Monterrey, Guadalajara, Tijuana, Mrida and Mexico City.

www.rb.com

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AHMSAS NeW FAcILITY

Mexican steel maker Altos Hornos de Mxico (AHMSA) inaugurated a major new production plant in the northern state of Coahuila. The massive 2.3 billion usd facility will produce specialized steel plate for the automotive, railroad and energy industries, among others.

www.ahmsa.com

METALLURGICAL

BUILDING GROWTH BRIcK BY BRIcK

Danish toymaker Lego will invest 125 million usd to expand production capacity at its manufacturing plant in the northern state of Nuevo Len. Lego has experienced double-digit sales growth in Mexico in recent years.

www.lego.com

MANUFACTURING

eXPANDeD NeTWORK

IT Mexican IT services provider RedIT will invest 12 million usd to extend its fiber optic network in key growth areas such as the cities of Guadalajara, Monterrey, Quertaro, Tijuana and Toluca. RedIT offers services such as data centers, fiber optic networks and IT infrastructure management.

www.redit.com

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HIGUcHIS NeW MANUFAcTURING PLANT

AUTOMOTIVE

MAGNA, ADDING MANUFAcTURING cAPAcITY

Canadian auto parts manufacturer Magna International will invest 100 million usd to build three production facilities in the northern state of Coahuila. The added capacity is slated to produce auto seats for export and suspensions for domestic OEMs.

www.magna.com

AUTOMOTIVE

cOOLING INVeSTMeNT

MANUFACTURING

GRUPO SOMAR, LeADeR IN LATIN AMeRIcA

Mexican pharmaceutical manufacturer Somar will invest approximately 50 million usd to install a plant with plasma fractionation capabilities outside Mexico City. According to the company, the new facility will be the largest of its type in Latin America.

www.gruposomar.com

PHARMACEUTICAL

SUMITOMO MAKeS ITSeLF AT HOMe IN MeXIcO

Japanese electronics manufacturer Sumitomo Electric Wiring Systems will invest approximately 19 million usd to build a new distribution center in the northern state of Coahuila. The site will be used to concentrate and distribute imported inputs for the companys two electrical components plants in the region.

www.sewsus.com

ELECTRONIC

A BUSINeSS AS SMOOTH AS LeATHeR

Brazilian industrial manufacturer Embraco will invest up to 60 million usd to expand production capacity at its Mexico plant in the northeastern state of Nuevo Len. Resources are targeted to boost output of refrigeration compressors and initiate production of next-generation compressor technology.

www.embraco.com

Japanese automotive parts manufacturer Higuchi Manufacturing will build a new production plant in the northern state of Coahuila. The 3.5 million usd facility is planned to produce components for safety belts and air bags.

www.hig-jp.net

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AUTOMOTIVE

US-based automotive leather producer Eagle Ottawa initiated operations at a new 40 million usd production plant in the central state of Guanajuato Mexicos leather working heartland.

www.eagleottawa.com

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Negocios ProMxico |

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| Negocios ProMxico

August 2013

photo archiveSpecial Report Special Report

THe ADVeNTURe OF SOFTWARe DeSIGN

Entia has devised a new method called Active Action that enables companies to design the software project that best fits their needs.

by kARLA GARDUO

If software were a building, Entia would be the team of architects that listens to and guides users to define the best project for their needs. But that is not all: Entia would also find the best builders, carpenters, forgers, painters and plumbers to build it as efficiently as possible.

Depending on the build of a house, the modernity, we bring in experts from mul-tiple disciplines to make the most cost-effective project, says Juan Carlos Gonzlez, CEO of the company created in early 2013.

Entia was born from In-nox, a small software devel-opment firm that was founded by four partners in 2003 in

an office that did not look like an office and a house that did not look like a house, recalls Gonzlez. We started growing and by 2008 we were 70 developers, he adds.

With the arrival of new competitors from countries such as India, the interna-tional software development market began to lower its prices, so Entias partners decided to change the focus of their business.

We created a service called Innocamp, which basi-cally meant bringing custom-ers in with their entire work team to design their software project, he explains.

Innocamp emerged as part of the companys sales

process, which was too long as it involved speaking to ev-ery stakeholder in the project to create an offer suitable for everyone.

We decided to turn the process around: instead of visiting the customer for eight months to speak to all the stakeholders in a soft-ware development project, we could bring them all to the office and in five or six hours when they could freely contradict each other, reach an agreement to everyones liking he reveals.

The challenge was to pres-ent it so that it appealed to all the projects players within a corporation, take them out of their everyday context and get them planning. That was how they came up with play-ful techniques to complete a process they call collabora-tive design.

That new method in-creased the chances of clos-ing a sale significantly but there came a time when this collaborative design in it-self became a service appeal-

ing enough to leave software development behind.

We saw clearly how peo-ple got excited about present-ing their ideas and discussing their software project and we realized that the service itself of getting them together to think was very valuable, affirms Gonzlez.

Using several methodolo-gies and dynamics Lego, team building, nominal groups and other dynamics the group designed a strategy that was no longer called Innocamp, since it was no longer a one-day camp but had become an approach that required from three to six weeks.

That was how Entia came to life in January 2013, a company whose only product is Active Action, a strategic design process for high-value software projects.

The method has seven stages, from meeting the project stakeholders, to contacting potential develop-ers, suppliers and investors, including follow-up, at the clients request.

We became talent inte-grators. That is what we do to generate high-value proj-ects, boasts Gonzlez.

Close to 70% of the projects designed with that approach have been success-ful, says Gonzlez. And while close to 30% of them have been cancelled during the pro-cess, it is not seen as a failure since, when a customer realiz-es that creating new software is not a viable option, it just means that Entias methodol-ogy has been effective.

It is a success to us. If the project is declared un-feasible, we have saved the business a lot of money, says Gonzlez.

Entia no longer employs developers or marketers. How-ever, they create value in fol-low-up and in hiring the person who will lead the project.

We decided to stay away from specific solutions and act as neutral technology consul-tants, explains Gonzlez.

Often, at the end of the process, the recommendation is not to develop new tech-

nology but to use existing resources such as cloud host-ing services.

We have been looking at many types of technology for so long that we discovered that if a percentage of the solution is already there, we dont have to develop it that would be like reinventing the wheel. Instead, we guide and, at most, integrate the existing services. That automatically reduces project costs dramat-ically, says Gonzlez.

Entias work is novel in one segment. While large con-sulting firms do similar work with industry giants, Entia has been able to reach small and medium-sized businesses (SMBs) that had no access to strategic design services.

The company is currently headquartered in Guadalajara but by the close of 2013 will reach Monterrey and Mexico City two of the countrys largest cities and plans to open an office in Central America within three years. N

www.entia.com.mx

1. Pre-Day. The program for the day is to find out the customers goals and plans to achieve them.

2. Intensive Day. For 12 hours, the clients team is taken out of its regular routine by the experts to discover, identify and design the technology project that will enable them to reach their vision using diverse techniques.

3. Post-Day. The information generated in the Intensive Day is analyzed to design and document the set of solutions that will enable the company to reach its goals.

4. Action Day. Alternative solutions are presented that align with expectations so that the client can make the decision to launch his/her project.

5. Meeting Day. Once the project is designed, a work day is organized for the client to meet the work teams proposed by Entia.

6. Team-up Day. The project leader is recruited and prepared.

7. Follow-up Day. Periodical meetings are held to follow-up on the project and ensure its success.

ACTIVE ACTION, The Method

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| Negocios ProMxico

August 2013

BIAANI: Technology Applied To Business And heAlTh

by ANTONIO VzqUEz

photos courtesy of biaani

Four years after its foundation, this Mexican company offers both technology solutions to small and medium-sized businesses (SMBs) and mobile device applications that measure a users health status.

In Zapoteca language, biaani means light, clarity and wis-dom. These three concepts were the inspiration for the Mexican entrepreneurs that created Biaani, a company devoted to the development of technology solutions, which has been recognized with national and interna-tional accolades.

In 2009, Biaani appeared as a business that offered mo-bile technology development

to its customers. The firms applications gave customers access to their information from anywhere in the world, without the need for a server.

We saw that develop-ing web applications for corporations was our biggest strength. We approached several institutions such as the Mexico-US Science Foun-dation (FUMEC) and we decided to not only perfect these applications but also

to get involved in creating others for the health sector, says Enrique Lpez Muoz, CEO of Biaani.

Since completing its first products, Biaani has created Walk-Biz, an application for SMB owners, and Zabani, a mobile device application (Ap-ple iOS and Android) to moni-tor a users quality of sleep.

Enrique Lpez Muoz explains that Walk-Biz is software for handling a com-panys institutional informa-tion, its services and products and any type of data. Users can manage their own ac-counts from a web page and update their information whenever they want.

According to information by Biaani, 38% of Internet searches made through a smartphone are related to products and services, while 66% of cell phone users in Mexico have downloaded some mobile application in

the last two years. Further-more, 26% of smartphone owners have made purchases from their devices and 33% have said they will do so in the future. Based on that information, it is estimated that in the medium term, five out of every 10 smartphone owners will make transac-tions, purchases and product and service searches from their devices.

We have always worked with solutions aimed at SMBs, to enable them to have their own applications. This is a big sector where online sales are increasing through mobile devices and tablets, which today are sold far more than desktops, states Lpez Muoz.

Biaanis application for SMBs is easy, integrative, quick and affordable. Walk-Biz buyers do not require any

sleep-related disease, says Lpez Muoz.

Zabani was introduced in Canada in 2011. It won an award to creativity as part of TechBA and with it, Biaani received the feedback it need-ed to position its application internationally.

Zabani will be available for the most popular plat-forms Apple, Android and for the Nokia S40 family of phones, of which close to 1 million units are sold daily around the world.

The application captures sounds through the devices microphone during the night and subsequently analyzes the sleep patterns and makes a diagnosis that can be sent to a doctor to determine if the patient suffers from a disease. According to some companies, by 2017 the mo-bile healthcare market will be

worth 23 billion usd. Such an application offers savings in distances, time and cost, since a doctor can check up on a patient even if he or she is hundreds of miles away, clarifies Lpez Muoz, point-ing out that one of Biaanis advantages over its competi-tors is Mexicos geographic location, closeness to the US, national technology talent and low production costs.

Biaanis CEO adds that in the future, the firm plans to improve and consolidate its applications for SMB cus-tomers. Without a doubt, product development for these business owners will be the companys strongest area. We want to mature in that aspect and continue growing with Walk-Biz and Zabani, he concludes. N

www.biaani.com

knowledge of programming or design to create their own ap-plication using the platform.

Owners who get an ap-plication using Walk-Biz will have the advantage of offer-ing other cybernauts infor-mation about their business, as well as their products and services, which can be down-loaded from any cell phone or tablet.

As for Zabani, Lpez Mu-oz claims that it is Biaanis venture into the health sector.

We decided to propose something in health and we used Zabani to participate in Vancouver, Canada, through a program by FUMEC called Technologies Business Accel-erator (TechBA). The applica-tion monitors and analyzes users sleep patterns and, based on that information, determines if the individual is at risk of suffering some

Special Report Special Report

Since completing its first products, Biaani has created Walk-Biz, an application for SMB owners, and Zabani, a mobile device application (Apple iOS and Android) to monitor a users quality of sleep.

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| Negocios ProMxico

August 2013

Creative industries: THE MExICO ADVANTAGE

Mexico is poised to become a global leader in the production of content for the Spanish speaking market. With an unprecedented convergence of perfectly aligned conditions and a clear industry strategy oriented to that end, the country is taking firm steps in the pursuance of its destiny of leadership.

by MARIANA LARRAGOITI kOLkMEyER*

a Creative OppOrtunityLatin America is one of the worlds fastest growing media markets and Mexico is a lead-ing force in the digital audiovisual production renaissance in the region. The countrys cre-ative industries are transforming their busi-ness and production models and evolving with the advent of new technologies and consumer trends, which range from cinema and TV pro-duction all the way to digital animation, spe-cial effects (VFX), video game and multimedia development. As a result, the national media landscape has registered rapid growth in re-cent years, placing Mexico at the forefront of the digital, cultural and entertainment revolu-tion of the Spanish language and establishing it as the Matrix of the Spanish Digital Wave.

The need for specialized content that bet-ter caters the Spanish language market, along with the search of strategic partners for global media companies based primarily in North America and Europe, has prompted increasing interest in the region. Given Mexicos highly recognized talent, as well as its extremely com-petitive costs, international quality standard infrastructure, natural wonders, world re-nowned hospitality, great local market, prox-imity to key international markets and gener-ous incentives, the country has become, now more than ever, the most attractive production destination on the globe, with unmatched fi-nancial, logistic, human capital and geograph-ic advantages.

Mexicos audiovisual and interactive in-dustry is committed to the development of intellectual property for the digital screen in any platform. Strategically located, neighbor-

illustrations oldemarCover Feature Cover Feature

ing the most important market in the world the US and gateway to Latin America and the Pacific Rim regions, business culture affin-ity, an integral government support platform, quality of life, industry-tailored incentives and highly competitive costs are some of the ele-ments that factor into the Mexico advantage.

the MexiCan audiOvisual industry and the age Of spanish COntentMexico is one of the most important consumer markets and the gateway to the highest grow-ing markets in the globe: ThecreativeindustriesinMexicocontribute

up to 7% of the Gross Domestic Product (GDP) of the national economy.

AccordingtofigurestakenfromtheCreativeEconomy Report 2010 of the United Na-tions Conference on Trade and Development (UNCTAD), Mexico exported 5,167 million usd of creative goods and services and it is the largest exporter of Latin America, fol-lowed by Brazil, which exported 1,222 mil-lion usd. In fact, Mexico exports more than Latin America and the Caribbean combined.

Mexicanaudiovisualcontentiscurrentlybe-ing watched by over 1 billion people around the globe in more than 10 languages.

LatinAmericaisoneofthefastestgrowingconsumer regions and Mexico is one of the most important markets in the world.

In 2012, the media sector in Mexico re-corded over 15,500 million usd in sales. The sector includes advertising, broadcast televi-sion, cable television, and film marketing.

Mexicoisrankedamongthe15mainvideogame markets worldwide and it is the first in Latin America with almost 50% of the sales of the region, equivalent to 893 million usd during 2012.

According to information from MexicosMinistry of Public Education (SEP), over 110,000 engineering and technology-related students graduate in the country each year.

Mexicoistheninthglobalhubofinforma-tion technology (IT) resources and Americas most important technology talent pool.

Thecountrysaudiovisualproductionanddevelopment costs are very competitive. According to KPMG, Mexico is 37.7% and 38.9% more cost competitive than the US in terms of software development and digital entertainment, respectively.The Spanish speaking population is one of

the fastest growing segments in the world, es-pecially in the US. Mexico is not only a prime

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Cover Feature Cover Feature

Mexico is not only a prime market for entertainment products but also an ideal platform to create Spanish language content, since the country can be both a test market and a development center for products that target the increasingly important and influential Spanish speaking market.

market for entertainment products but also an ideal platform to create Spanish language content, since the country can be both a test market and a development center for prod-ucts that target the increasingly important and influential Spanish speaking market. Said market constitutes a huge community that shares products, services and culture, a situ-ation that offers businesses and institutions a truly unique growth opportunity. Here are some important facts regarding the Spanish language: Spanish, theofficial language in21coun-

tries, is the third most widely spoken lan-guage in the world, after English and Man-darin.

Morethan400millionpeoplespeakSpan-ish worldwide.

Expertspredictthatby2050therewillbe530 million Spanish speakers, of which 100 million will be living in the US.

The demand for quality Spanish contentnationwide has been fueled, in part, by the Hispanic media market explosion led by TV advertising at a national and network level, which has seen growth of nearly 74% in recent years.For the aforementioned reasons, as well as

Mexicos potential to become the global pro-duction leader of these industries, the Mexican government is working on the implementation of an integral strategy for its development and improvement, where the attraction, generation and retention of talent play an essential role.

prOgraM fOr high-iMpaCt audiOvisual prOduCtiOnHaving identified the creative industries as a priority sector for the Mexican economy, the government embarked upon a strategy designed to enhance the countrys cost effec-

tive competitiveness to boost the audiovisual production platform and to promote export services and investment in the industry by strengthening Mexicos position as a preferred production destination.

As part of its strategy for the sector, in March 2010, the Mexican government launched the Support Program for High-im-pact Audiovisual Production (ProAV), which comprises a dedicated government service platform for audiovisual production and in-cludes an industry incentive.

ProAV grants foreign and local audiovisual productions with an incentive of up to 7.5% on the whole of eligible expenses incurred and in-voiced in Mexico, whose minimum total is equal or larger than 40 million pesos (approximately 3.125 million usd) of expenses in production or 10 million pesos (approximately 780,865 usd) in post-production costs (VFX), animation and video games or digital interactive.

The policies of ProAV are very flexible in terms of eligible costs; the only requirement is to back the expenses with authorized fiscal invoic-es. Practically any expense incurred in Mexico related to the production and post-production of an audiovisual production is contemplated.

As an additional advantage, producers can now have access to the ProAV Program benefit through a bundle mode, which allows a single production company to apply for the incentive with a production portfolio of projects for set/location shoot or digital post-production.

digital Creative City Digital Creative City (DCC) is an exciting new project that will create a hub for the digi-tal media industry within Mexico from TV, cinema and advertising to video games, digi-tal animation, interactive multimedia and e-learning. DCC will be located in Guadalajara, the countrys second largest city and home to Mexicos Silicon Valley.

DCC aims to attract Mexican and inter-national creative minds to develop new digi-tal media content. The project will advance Mexicos natural position as a global creative

leader while pushing the boundaries of sus-tainable urban development. In short, DCC will stand out as a new model to be replicated across the country and Latin America.

In November 2012, the Mexican Ministry of Economy (SE) formally presented the DCC Master Plan developed by a team of world re-nowned urban development specialists, such as the Massachusetts Institute of Technology (MIT), Sensible City Lab (MIT) Carlo Ratti Associati, Metropolis Foundation, Accenture Mobility in Chain and ARUP. The Plan has been launched and has already begun work in the first urban interventions. In addition, be-fore the end of 2013, DCC will formally an-nounce the investment committed by its first anchor international digital media company. With the launch of DCC, Mexico will reap the following benefits: A planned contribution to the national

GDP of 3.5 trillion usd by 2023.

IncreasedForeignDirectInvestment(FDI)estimated at between 1.8 and 4.9 billion usd over 10 years.

Creation of 31,000 jobs (19,000 direct,8,000 indirect and 3,500 induced).

Creativity fOCuses On MexiCO In recent years, Hollywood and many pow-erful audiovisual production giants have tried to play the game with China but abrupt changes in their markets rules of engagement and deep business culture differences have made producers fix their vision in the rapidly growing and increasingly influential Spanish language market.

Mexico appears as the natural gateway to that profitable segment, not only in Spanish speaking countries but also, most important-ly, in the US.

Today, creativity has set its sights on Mex-ico, an interest that, given the growth poten-tial of the creative industries in the country, will surely pay off in the years to come. N

*Director of Innovation, Business Intelligence Unit

(UIN), ProMxico.

According to figures taken from the Creative Economy Report 2010 of the United Nations Conference on

Trade and Development (UNCTAD), Mexico exported 5,167 million usd of

creative goods and services and it is the largest exporter of Latin America,

followed by Brazil, which exported 1,222 million usd. In fact, Mexico

exports more than Latin America and the Caribbean combined.

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Business Tips Business Tips

the relevance of the Creative industries in Mexico

by MARA CRISTINA ROSAS*

The creative economy has become a source of development and growth. Mexico is the top creative economy in Latin America, sixth among developing countries and 18th worldwide. The country is fertile ground for new business opportunities in this field.

The United Nations Educational, Scien-tific and Cultural Organization (UNES-CO) states that creative industries are an increasingly relevant component of knowledge-based, post-industrial econ-omies. These industries contribute to economic growth and job creation and are vehicles for the transfer of cultural identity.

The growing interest in the industry has implied the proliferation of analyses, statistics, mappings and studies on the relationship between the creative indus-tries and economic development, provid-ing legislator bodies in several countries the necessary data and information to create public policies.

The concept of creative economy was introduced in 2001 by John Howkins a journalist and consultant for over 30 countries around the world including Aus-tralia, Canada, China, France, Greece, In-dia, Italy, Japan, Poland, Singapore, United Kingdom and the US.

During an interview with the World In-tellectual Property Organization (WIPO), Howkins explained that a creative econ-omy is an economy where the major inputs and outputs are ideas [] where most people spend a significant amount of their time in having ideas. Its an economy or society where people are concerned with their capacity to think and have an idea [] Its where people, at any stage talking to their friends, having a glass of wine, waking up at 4 oclock in the morning think they can come up with an idea that actually works, not just an idea with some sort of esoteric pleasure but the driver of their career and their thoughts of status and their thoughts of identity. [Therefore]

the creative economy consists of the transactions in (the resulting) creative products. Each transaction may have two complementary values: the value of the intangible, intellectual property and the value of the physical carrier or plat-form (if any). In some industries, such as digital software, the intellectual property value is higher. In others, such as art, the unit cost of the physical object is higher.

Howkins refers to a creativity-based production model, however redundant it may seem, with proposals that go beyond established patterns.

The creative economy operates dif-ferently than the traditional industrial economy which shows a rigid and hierar-chical behavior that is clearly divided into the stages of origination, production, dis-tribution and consumption. In contrast, there is more flexibility in a creative econ-omy, particularly in the phases of origina-tion, distribution and consumption.

Howkins considers 15 industries in the concept of creative economy, rang-ing from arts to the wide fields of sci-ence and technology. These industries, technologies and/or sciences include art (painting, for example); crafts; design; fashion; film; music; performing arts (theater, opera, dance and ballet); editing and publishing (books and magazines); research and development; computer programs; toys and games, excluding video games; television and radio; video games; architecture and advertising.

The common denominator between all these industries is creativity, which is both their raw material and their most valuable economic product. In other words, for a product or service to be considered a by-product of the creative economy, it has to

be the result of creativity as well as have economic value.

However, Howkins acknowledges the difficulties of quantifying the economic value of creativity, which is why there are only a few estimates.

Thus, according to the United Na-tions Conference on Trade and Devel-opment (UNCTAD), that has published a report on creative economies since 2008, global exports of creative goods and services doubled between 2002 and 2008, reaching 592 billion usd in 2008 with an annual growth rate of approxi-mately 14%.

Creative economy is positive for de-veloping countries which always strug-gle to access international markets in the traditional branches of economy. For instance, in 2008, developing countries exported goods and services for around 176 billion usd, 43% of total trade in the worlds creative industries that year. That contrasts against the severe con-traction of global trade in the same year, which was 12%.

The creative economy can be an op-tion for growth, even a means to reduce poverty in developing countries amid the prevailing international economic crisis.

MexiCO and the Creative industriesMexico is the top creative economy in Latin America, sixth among developing countries and 18th worldwide. According to Pro-Mxico, Mexicos trade agency, creative industries rank fifth among the countrys strategic sectors, behind only the aerospace, agricultural, food and automotive sectors.

There are many companies in Mexico that offer cultural, audiovisual and enter-tainment services. For instance, in 2006, the television content distribution market earned approximately 167 billion usd and is expected to reach 251 billion in 2013. The advertising market is signifi-cant as well, especially considering that it was valued at 479 billion in 2008, with television recording the largest share.

Of Mexicos creative industries, de-sign is the most important component, accounting for 73%, followed by publish-ing (9.8%), music (5.8%), arts and crafts (5.2%), visual arts (4.6%), new media (1.5%) and audiovisual products (0.3%).

Other sectors are very promising in terms of development, such as jewelry the country is the leading silver producer in the world fashion, leather and shoes, decora-tion and furniture.

One sector experiencing a sweet spot, thanks to tax incentives provided by the Mexican government, is film close to 70 films have been produced. Furthermore, due to the recent boom in the industry, some 30,000 jobs that are directly linked to film production have been created.

According to the 2012 Statistical Yearbook for Mexican Cinema, 67 Mex-ican films premiered in national theaters and a total of 112 films were produced, of which 63% received government sup-port. It is important to note that in 2012, 36 Mexican films produced with gov-ernment support received a total of 66 awards in international film events.

With regard to digital industries, the use of information technology is ever ex-panding and will have an effect on creativ-ity and the competitiveness of the Mexican economy, particularly in trade, cultural and social activities. Also of special inter-est is that Mexican laws are being adapted to recognize and stimulate projects per-taining to the creative industries, opening a window of opportunity for investors. N

*Professor and researcher in the Political

and Social Sciences Faculty, National Auton-

omous University of Mexico (UNAM).

There are many companies in Mexico that offer cultural, audiovisual and entertainment services. For instance, in 2006, the television content distribution market earned approximately 167 billion usd and is expected to reach 251 billion in 2013.

photo archive

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by jOS ANTONIO PERAL*

The creative industries can be defined as those that are based on individual cre-ativity, skills and talent that combined create value through the generation and exploitation of intellectual property. They are composed of the film, televi-sion, video game, animation and multi-media sectors.

According to the study Global En-tertainment and Media Outlook 2009-2013, carried out by consulting firm PricewaterhouseCoopers (PwC), the global entertainment and media market was worth over 1.35 trillion usd in 2008 and it is forecast to rise to approximately 1.6 trillion usd by 2013.

As the knowledge versus industri-al economy continues to grow, creative industries become more essential, since they increase the knowledge-based job creation engine, preparing workers for a digital future that relies on creativity rather than physical work.

Creative industries also represent a significant part of many countries Gross Domestic Product (GDP), as nations around the globe recognize the impor-tance of the sector to their future eco-nomic growth. For countries such as the US and Canada, innovation is the key to continue growing in different industries, including the creative ones.

In the US, the creative industries have two major influences: one cultural for example Hollywood, sports champion-ships and world recognized toys the other technological innovation carried out by companies like Google, Microsoft and Facebook, among others. In short, the creative industries have become one of the largest, most dynamic and profit-able sectors in the US.

For Canada, creative industries are the backbone of the countrys innovation

creation of highly innovative projects i.e. the planning and current building of the Digital Creative City in Guadalajara, Jalisco. That city is destined to house several creative industry global giants and to become a hub in which animation, software, technological clusters, film and video game companies can develop proj-ects not only for Latin America but also for the global market.

In the meantime, however, the re-maining sectors in both the US and Ca-nadian creative industries should not lose the opportunity to expand into the Mexican market via the tropicalization of their products. After all, since Mexico offers highly skilled talent in these kinds

and faster economic growth. According to a report by the Ontario Entertainment and Creative Cluster, only the province of Ontario is among North Americas top entertainment and media economies, ranking third in employment just behind California and New York. It is among the worlds highest revenue generating creative clusters and has the potential to surpass its current status and place at the top of the second tier of media economies.

However, that growth and special-ization requires the combination of dif-ferent skills, talent and experience. On-tarios six cultural industries need global partners to reach the potential growth that is compulsory for the sector. The provinces six cultural industries are: video production (film, TV, mobile and online), music recording and publishing, commercial theater, interactive digital media (including mobile content), maga-zine publishing and book publishing.

In the case of Mexico, the country is an ideal location for the creative indus-tries thanks to its infrastructure, state of the art technology, scenic variety, expe-rience, highly skilled human capital and internationally recognized talent. In that sense, Mexico represents the perfect ally for Canada to create a synergy as well as develop a strategic partnership to reach its true potential and competitive level for projects in the North American Free Trade Agreement (NAFTA) region and other countries.

Over the past 20 years, Mexico has experienced a steady and stable growth in its economy due to its openness to in-ternational business, which, in turn, has led it to be ranked as one of the top three emerging markets.

With an estimated population of 116 million people, a large and growing middle

class, and an average of 100,000 engineer-ing and technology students graduating every year, Mexico is a significant potential consumer market and, more importantly, a potential business partner for any com-pany within the creative industries sector.

Mexico has succeeded in the creative industries by implementing a partner business mentality as opposed to a com-petitor business mentality, with the ob-jective of complementing existing firms to better consolidate the North American market and to make it more competitive regarding global standards.

According to KPMGs Guide to In-ternational Business Location Costs 2012, in terms of costs Mexico is 37.7% more competitive in the area of software design and 38.9% in digital entertain-ment compared to the US.

What the country offers through re-nowned companies like Baja Film Studios (worlds largest sets and aquatic stage) and Estudios Churubusco, among oth-ers, are potential partnerships to enhance the creative industries productions while offering competitive costs, in order to strengthen the sector in the continent.

To date, both the Canadian and the US film industries have chosen Mex-ico as their partner for their cinemato-graphic projects, in comparison to the other sectors that make up the creative industries. Both nations film industries have produced several award-winning films which were filmed in Mexico. That serves as an excellent example as to how the cooperation between the NAFTA countries can lead to even greater success when Canadian and American know-how are combined with Mexican talent. Synergies such as that have boosted the development of Mexicos creative indus-tries exponentially and resulted in the

of processes, all three countries would be creating an initial win-win partnership that will grow into something greater and will provide the necessary tools to pursue highly ambitious projects in the long run.

What is more, all of the above comes to show that a strategic partnership be-tween NAFTA companies will create greater competitiveness against non-NAFTA countries for projects within the region, which is the best alternative NAFTA has to contend with other for-eign companies. N

*Trade Commissioner of the ProMxico

office in Chicago, United States of America.

photo archive

Thanks to its infrastructure, state of the art technology, scenic variety, experience, highly skilled human capital and internationally recognized talent, Mexico is an ideal location for the creative industries in North America.

Mexico has succeeded in the creative industries by implementing a partner business mentality as opposed to a competitor business mentality, with the objective of complementing existing firms to better consolidate the North American market and to make it more competitive regarding global standards.

Mexico: a strategic partner for NAFTAs Creative Industries

Mexico in the World Mexico in the World

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photo archive

film in Mexico: An Industry with a Golden Future

by GISELLE OTERO OSORNIO AND LUIS ESTEbAN MUIz*

Mexicos geographical diversity and natural, architectural and cultural wealth, the abundance of quality infrastructure and technical equipment, along with the countrys creative and artistic talent, have made it a natural set for the film industry.

The golden age of cinema in Mexico was of huge importance for the countrys film industry. It was a period of great social, po-litical and cultural unrest not only in Mex-ico but also around the world. The Second World War was ravaging Europe and Asia. The US was dedicating most of its resources to the arms trade. In that context, the Mexi-can film industry encountered an opportu-nity to offer the world something other than the products of war.

Between 1936 and 1945 there appeared films such as All en el Rancho Grande by Fernando Fuentes, Ah est el detalle by Juan Bustillo Oro and Saln Mxico by Emilio Fernndez, which are now classics of Mexi-can and world cinema.

Major Hollywood studios have shot films in Mexico that have been box office hits not only in the US but across the globe, thanks to the geographical, artistic and eco-nomic benefits the country offers. For ex-ample, the film Titanic by James Cameron was produced by Twentieth Century Foxs recently built Baja Film Studios (1996) (lo-cated in Rosarito, Baja California). The com-plex is home to the largest aquatic studio in the world and has been the set for shooting other films such as 007: Tomorrow Never Dies by John Richardson and Metro-Gold-wyn-Mayer (MGM) and Deep Blue Sea by Renny Harlin and Warner Brothers (WB).

Foreign directors have discovered that Mexico is a paradise for filmmaking with at-tractive locations and incomparable talent. Furthermore, in recent years agreements and incentives have been established to support the growth of the film industry in Mexico, leading to the development of new opportuni-ties to facilitate the production of films in the country. The number and variety of incentives offered in Mexico has evolved to the extent

that, together with financial and tax benefits, comparative advantages are also available re-lating to locations. The geographical diversity and natural, architectural and cultural wealth of Mexico, together with the abundance of quality film support infrastructure and techni-cal equipment, and the countrys creative and artistic talent, ensure the conditions are pres-ent for numerous film success stories.

In that context, the financial and tax incentives to consider include the Fund for Film Production Quality (FOPROCINE), a trust that aims to support quality cinema with venture capital, loans, guarantees, pro-motion and recognition of efficiency. The Fund for Film Investment and Promotion (FIDECINE) is another trust that supports production, post-production, distribution and screenings with venture capital and loans. Also available is the Fiscal Stimulus for National Film Production Investment Projects (EDICINE 226), an incentive pack-age that grants a tax credit equivalent to the amount invested, to be discounted against the income tax levied during the tax year in which the loan is agreed. All these incentives are available through Mexican producers.

In 2010 a new incentive called Support for High Impact Film and Audiovisual Pro-duction or Fondo ProAV was created. Pro-Mxico, the international economic promo-tion agency of the Mexican government, es-tablished the program to promote the inter-nationalization of the countrys film industry. Fondo ProAV is designed to receive invest-ment in audiovisual projects (film, series, an-imations, video games, apps and e-learning programs), through financial reimbursement of up to 6.5% of eligible expenditures made and invoiced in Mexico.

However, what sets Mexico apart and makes it truly unique in the history of cin-

makers continue to demonstrate their artistic qualities: Luis Estradas El infierno; Carlos Carreras The Crime of Father Amaro; Luis Mandokis Innocent Voices and Carlos Reygadass Silent Light. The internationally recognized work of Amat Escalante who was awarded as Best Director at the most recent Cannes Film Festival for his film Heli and received the Best International Film award at the Munich Film Festival is also worth mentioning. All of the above shows that Mexican cinema is achieving a great sense of drive and importance on an inter-national level.

Bringing together all of these elements means business opportunities will continue

to consolidate further, perhaps to achieve a new golden age of Mexican cinema that leads to the flourishing of an internation-ally renowned, quality film industry. Mexico is evolving and it has everything it needs to boost the creation and development of the national film industry. What is more, Mexico not only offers an innovative environment that helps create an art of ever increasing val-ue and profit (film) but also achieves greater universal successes. N

*Giselle Otero Osornio is an Independent film

director and Luis Esteban Muiz an independent

film producer. Both are graduates of Centro:

Diseo, Cine y Televisin.

ema are the number, quality and variety of its locations, together with the existing facilities for obtaining a range of discounts in goods and services from state and municipal gov-ernments. Support is also offered in obtain-ing filming permits and the transport and set-up of operations, to name but a few.

International film productions have seized the countless opportunities offered by that range of advantages. Neil Blomkamps Elysium received support from the ProAV fund, as did the film Colombiana by Olivier Megaton. Turning to Mexican cinema, key films include Amores Perros by Alejandro Gonzlez Iarrit and Y tu mma tambin by Alfonso Cuarn, while a number of film-

What sets Mexico apart and makes it truly unique in the history of cinema are the number, quality and variety of its locations, together with the existing facilities for obtaining a range of discounts in goods and services from state and municipal governments.

Guest Opinion Guest Opinion

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Negocios Report

The National Strategy for the Film and Audiovisual Industry:

a road Map to the future

ProMxico and representatives from Mexicos film and audiovisual industry have worked on the National Strategy for Film and Audiovisual Industry, which

will be presented to Mexicos filmmaking community in the fall of 2013.

by LUIS ARCHUNDIA*

Negocios Report photo archive

In the wake of the growing demand for Spanish language entertainment and cultural products with a Latin touch in the United States and around the world, Mexico is currently in a unique position in the globalization of audiovisual pro-duction. The development of new digital technologies has exponentially increased the countrys chances to sophisticate and deepen its participation and influence in the industrys global value chain.

Known for its long filmmaking tra-dition, Mexico is a powerhouse of tal-ent and the country has the potential to establish itself as the worlds largest producer of filmed entertainment and cultural content in the Spanish language

across the audiovisual spectrum: loca-tions, geostrategic position, experience, as well as award-winning and cult-fol-lowing cinematic storytellers.

While encouraging the outlook for the country, Mexico faces a paradox: enormous challenges in the digital age demand that the sector gradually leaves behind its heavy dependence on state subsidies and develops a strong business model that ensures constant growth and diversification of the moving image in-dustry (film, television, animation, video games, new media or visual effects), in order to formulate a new scheme with the support and guidance of the federal government.

a three-year long Mexican and interna-tional industry analysis is reflected in the National Strategy for Film and Audiovi-sual Industry, which will be presented to Mexicos filmmaking community in the fall of 2013.

The document to be published in both digital and printed format will show the current state of the industry. It will include a diagnosis and concrete proposals for an action plan to trans-form the current production and busi-ness model into a virtuous circle of growth and profitability through a better industrial integration to take advantage of the opportunities brought by digital technology convergence.

For that reason, in 2010, ProMxi-cos Business Intelligence Unit (UIN) and representatives from the creative com-munity, who participated in the develop-ment of a Road Map for the Creative In-dustries, identified the need to establish an ongoing dialogue with the film and audiovisual industry. They began col-lecting diverse views from a Trust Group representing the entire value chain, to perform together a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the sector and make propos-als and public policy recommendations to give a definite boost to the industry, in front of the challenges posed by the digital age. The result of that input and

This National Strategy is also a refer-ence for the best practices of leading film industries in the world, country cases and sources of documentation of global leaders in multi-disciplinary analyses of the sector. Research on international ex-periences was an essential component of the document, given that the film indus-try is truly global, especially in the digi-tal age. The vision is much broader that in the analogical times: It is not about local theatrical performance anymore; it is a multicultural, international, simulta-neous and multiplatform industry

In that regard, the National Strategy for the Film and Audiovisual Industry is a road map to a forward-thinking in-

dustry which demands its players to mi-grate from an analogical mind frame to a digital one; to learn and master new and fast-changing production and busi-ness models; to know and embrace the opportunities of the digital production and distribution environments and to join multidisciplinary forces to make a global export-driven difference in mass or niche markets.

In short, the document is designed to tackle domestic and international challenges and build upon its strengths, a new pathway to a future of consolidated leadership. N

*Sector Advisor, Business Intelligence Unit

(UIN), ProMxico.

photo courtesy of qurum

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Creative intelligence: Design as an Agent for Change in Mexico

Design is booming. Driven by a group of leading designers, the government, the private sector and academia, the perception of the discipline is shifting, from the added value delivered at a product or business level, to improvements on quality of life, education and the environment to society as a whole.

by LUIS HERRERA ROjAS*

The history of design in Mexico was ignited by the 1968 Olympics that took place in the country. That was followed in the 1980s by a wave of professionalization headed by or-ganizations such as Qurum and the School of Industrial and Graphic Designers of Mexico (CODIGRAM), while the third wave of the Mexican design boom started about four or five years ago with a number of strategic-based projects focused on design policies, educational models and sustainable trends, led by a number of designers across the country.

For some disciplines of design, this journey has seen an evo-lution to new levels of sophistication, having the project Desti-nation: Mexico as a case in point. A joint initiative between the Museum of Modern Art (MoMA) in New York, the Ministry of Economy (SE), ProMxico and the Centro design school, it involved placing a selection of Mexican-designed products in the museums shops for over a month to promote the countrys perspective on design. The projects success was reflected by the shift in perception of Mexican design and culture as ex-pressed by hundreds of visitors and even through the online store, which sold out within a few days of the project opening.

tOwards a design Culture Claiming that design is everywhere is not the same as having a strong design culture. For that to exist, government, private sector and academic professionals need to prove the value of design and its benefits to peoples quality of life. That may be achieved through large-scale projects that offer high functional and aesthetic value at low cost, such as the one developed by Swedish-Dutch company IKEA, or through strategic design projects involving a real democratization of design, that go be-yond lifestyle to provide tangible benefits in everyday life to a wider population, such as the government-led program Ver Bien para Aprender Mejor (See Better to Learn Better).

To that end, Qurum, Mexicos Design Council has outlined a design ecosystem consisting of six habitats: government, aca-demia, the private sector, society, the professional design com-munity and the media. Their actions must be synchronized in order to create the conditions, attitudes, programs and results

that will help to provide tangible benefits to the economy, the environment and society at large. To achieve that, Qurum is urging the design community and other productive sectors to see and use design not only as a set of skills but as a mindset focused on new ways to solve old problems.

Examples of government involvement in design include early developments on funding programs, design policies and Integrated and Sustainable Urban Developments (DUIS) such as the showcasing of Puebla as a design capital, Guadalajara as a multimedia regional hub or Quertaro as a city focused on the promotion of creative industries.

Strategic-designed initiatives impacting on peoples welfare include projects such as Ciudad Mural by Colectivo Tomate,

which focuses on the renewal of the social fabric in certain neighborhoods. The strategy is complex; however, the tac-tics are fairly simple as they involve only a dozen paint cans and the will of hybrid teams formed out of locals and artists to transform these so called red zones into places for young people and families to meet and relax. For these types of proj-ects, design is used as part of the business model to change behaviors, attitudes and even industries, fostering growth and generating employment for partners, allies and suppliers alike.

design OppOrtunitiesMexico offers a wide range of opportunities for foreign com-panies looking to venture into the national market or boost

their growth by hiring talented design artists or consultants who can provide guidance and consulting in areas such as in-novation and strategic design, offering world class experience with a regional perspective at a local price.

In terms of business, Mexican designers have helped a number of foreign companies to successfully expand into niche markets ranging from premium brands, such as frozen yo-gurt or urban fashion clothing to mass market products. That means that those whose business models are based on margin or volume can benefit from the experience of local consultants to design, build and try out prototypes or pilot businesses tap-ping into local talent and experts.

Other opportunities can also be found in Mexico for com-panies interested in developing Shared Value Creation business models, which are aimed at impacting positively on the wel-fare of the local community while generating economic value for the corporation. Such is the case of projects like Sala Uno, which is determined to eradicate eye cataracts for disadvan-taged people with excellent results in terms of quality of life improvement and business growth.

the futureMexicos future will become more promising when the six habitats of Qurums design ecosystem align in terms of ob-jectives and resource allocation. That will allow the country to use design as creative intelligence to build smarter cities, lifestyle solutions, educational systems and products that could solve everyday problems.

On the other hand, the democratization of design should also become an integral part of the national agenda to promote its use at a policy level so that it is accessible to everyone. Put-ting these ideas into practice is an ambitious challenge that will require boundary-breaking partnerships, determination and a focus on clear priorities.

To that end, several design schools such as Centro, Anhuac Norte and Centro de Estudios Superiores de Diseo de Mon-terrey (CEDIM) are embracing that vision through programs aimed at giving students a broader perspective based on busi-ness, innovation and sustainability skills. The challenge for design educators is to generate professionals trained simul-taneously in problem solving and creativity. If that is pushed forward, design will precipitate a positive change in public perception and encourage the private sector to invest in origi-nal projects that will raise the quality of peoples lives, leading towards a new sense of social responsibility.

The future of design in Mexico is bright, due to the trust that many companies, schools and institutions have put on the use of design as a strategic bridge between the productive sectors of the country: a strategic vehicle to tell the story of a new Mexico to the world and a strategic tool to solve the key challenges of the nation. When that reality becomes operational, the country will be recognized in the eyes of the world as a forward-thinking culture that is ready to be an agent for change in as many indus-tries as possible. N

*President of Qurum, the Mexican Design Council and partner at

MBLM, an international brand consultancy agency.

Guest Opinion Guest Opinion

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photos courtesy of universidad de las californias internacional

by OMAR MAGAA

A UNIVeRSITY OUT OF A MOVIe

Having a good curriculum has never been enough for the managers of a film school in Tijuana. For them, being on the set of major productions is nothing short of fundamental.

Almost any university stu-dent knows the importance of participating in real pro-duction processes before graduating, especially if the experience involves heavy responsibilities coordinated by the best in the field.

For five years, one of the basic goals of the film studies program at the Universidad de las Californias Internacional (UDCI), operating in Tijuana for the last 20 years, has been to have students participate in medium and big budget film

Mexicos Partner Mexicos Partner

While the program gives significant weight to theoretical training with a focus on screenplay, production and business, Castillo and his academic partners believe that it is crucial, even natural, that students who have already completed their fifth term get hands-on practice, especially in a region where documentaries and commercial and film productions with significant budgets are being made throughout the year.

productions made along the border. Generally, they are Hol-lywood productions that are filmed close to Tijuana to make use of natural sea and land set-tings, the purpose built studios and the specialized human capi-tal that has been formed in the city over the last decade.

The same filmmakers that brought the academic plan into the Universitys menu of pro-grams in 2008, have launched a solid and assertive program of agreements with governments, producers, film studios, film equipment rental companies and universities, to give students

the necessary tools to train in a profession that requires both enormous creativity and knowl-edge of technical, legal and financial guidelines.

We offer the best connec-tions. If you are accepted into the school, you will be involved in a real production, says Ren Castillo, who coordinates the UDCIs film program.

The eight first-generation graduates of the program and current students have partici-pated in feature length films and television series, such as Little Boy, by Alejandro Monteverde; Americano, by

Mathieu Demy; Benjamin Troubles, by Kai Ephron; The Bridge, by Elwood Reid and Meredith Stiehm; Knight of Cups, by Terrence Malick; Foreverland, by Max McGuire; Workers, by Pepe Valle; Ghosts of the Pacific, by Brian Falk; Ah va el diablo, by Adrin Garca Bogliano; Miele, by Valeria Golino; Volando bajo, by Beto Gmez and Chronicles of Narnia: Voyage of the Dawn Treader, by Michael Apted.

That is possible and Castil-lo emphasizes this as one of the schools main advantages over other film faculties in Mexico

thanks to our border location, where students can travel free-ly between Tijuana and Los Angeles, where they can get, for example, equipment from Hollywood Rentals, one of the largest suppliers in the US, at no cost thanks to an agree-ment with UDCI. Another pact with Baja Studios the set for James Camerons Titanic in the late 1990s ensures that their doors will always be open to students working on practical assignments during the program.

Several other good links between the UDCIs film school and universities such as Jinan in Guangzhou (Guang-dong, China), Oviedo (Spain), Cienfuegos (Cuba), Catlica de Honduras, Francisco de Paula Santander Ocaa (Co-lombia) and the Escuela Inter-nacional de Cine y Televisin de San Antonio de los Baos (Cuba) are opening up new opportunities for academic ex-change for students. The UDCI is about to consolidate a plan with Jinan University for 10 film students to travel to Chi-na and 10 Chinese students to visit Tijuana to develop a film project in which each culture will portray the other.

While the program gives significant weight to theo-retical training with a focus on screenplay, production

and business the basis of the 63 courses that students must complete during nine four-month terms (three years) Castillo and his aca-demic partners believe that it is crucial, even natural, that students who have already completed their fifth term get hands-on practice, especially in a region where documen-taries and commercial and film productions with signifi-cant budgets are being made throughout the year.

COntinuOus praCtiCeThe school can guarantee that new students will have the same, if not more, opportuni-ties than earlier generations. The UDCI is building its own film set in its Santa Fe campus, close to the beaches of Tijuana and a post production room in another facility.

Furthermore, students and faculty will be involved in the production of a feature film in the Guadalupe Valley, based on the screenplay of one of their students, and another couple of projects from the US and Argentina.

In addition, they are to coordinate the Corto Creativo festival that the UDCI has been holding for 10 years, and which marked the begin-ning of the program, and prepare their participation in

the Tijuana Innovadora 2014 exhibition, where they will be in charge of the film section, as they were in 2012.

a BOOst tO the industry frOM aCadeMiaSeveral initiatives by the UDCIs film school, state and local governments as well as the private sector are seeking to recover the momentum of investments in film produc-tions experienced along the Mexico-US border after Ti-tanic and the establishment of Baja Studios. When large production companies decide to come to Tijuana, Rosarito or Mexicali, explains Castillo, the image of the region im-proves around the world and that translates into economic benefits for people in the area and professional opportunities for new film graduates.

The UDCIs film school was very active in the consul-tation and analysis process of the Law for the Promotion, Support and Development of the Film and Audiovisual Industry of the State of Baja California, which was pub-lished in the Official Gazette of the Baja California State Government on September 20, 2010. Furthermore, professors of the program are on the Film Consultation Board of Baja California and are conducting

an investigation requested by the State Film Commission, which is part of the state Min-istry of Tourism (SECTUR), aimed at showing whether the economic impact of the film industry in the region is equal to or higher than in other ar-eas, such as medical tourism.

The University was also involved in an investigation on the effects of the Free Trade Agreement on the Mexican film industry, led by a team of researchers from Penn States Center for Global Studies, coordinated by Dr. Sophia A. McClennen. The collaboration paid off, to the point where UDCI professors have presented their experiences and findings in Pennsylvania on the fervor for film that has erupted along the Mexico-US border in the last decade. Meanwhile, Penn State professors could join the list of guest lecturers who visit the University from other institu-tions in Los Angeles, San Fran-cisco and Mexico City.

According to Castillo, Tijuana has everything it takes to build a Vancouver-style film complex a city that became a prime destination for productions and formed, from that, the human capital required to advance projects with a local seal. N

www.udc.com.mx

photos courtesy of boxel

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Negocios ProMxico |

30 August 2013

| Negocios ProMxico

August 2013

BOXeL: exporTing QuAliTy creATiviTyThis Tijuana-based company has a perfect understanding of what is needed to be successful in an increasingly global market in which Mexico has huge opportunities: creativity.

by OMAR MAGAA

The visual content firm Boxel has set itself a goal that is an example to every new creative endeavor in Mexico: to com-ply with international quality standards in terms of pro-cesses, product delivery and products themselves.

Because for ideas, concepts and anything else resulting from creative work to set in motion the virtuous cycle that creates industry, moves capital and generates jobs, quality is of the essence.

Andrs Reyes, founder and CEO of Boxel, believes that idea has been the key to

making his company one of the main suppliers to the US entertainment industry from Tijuana, Baja California.

Boxel has its own com-petitive advantages over other firms in Mexico that produce latest-generation visual con-tent cartoons, feature films or 3D images for video games like its closeness to the worlds largest supply and demand center, the bilingualism of its human capital and the deep cultural exchange that takes place along the border. But at the end of the day, the com-panys success has been pos-

sible thanks to the eagerness of Reyes and his partners who embarked on this adventure in 1998 to match their way of doing things with the leading economies of this sector.

The difference between the US and Mexico does not lie in the ability to do things but in the ability to guarantee quality, believes Reyes.

Having solved this, Boxel has been able to position itself as a reliable and profitable op-tion for US corporations that sign agreements with studios located on the other side of the world in an effort to lower pro-duction costs. That is how Boxel has written its own outstanding history of organic growth and consecutive successes.

Reyes started out as a freelancer, taking jobs that required knowledge on interac-tive presentation and web page development. His work earned him an excellent reputation in the region; so much so that, in

time, he had to partner up with his brother, a programmer and a designer to bear the work load. In 2006 there were eight people working in the company.

At some point, the partners understood that they could export their products, while firms on the other side of the border saw an excellent ally in this group of entrepreneurs. Someone in San Diego realized that people in Tijuana were do-ing things with the same quality as in the US but at lower costs, explains Reyes.

Boxel is currently a studio with its own facilities, infra-structure and a workforce of 27 people.

the advantage Of talent trainingBoxels brand comprises two large areas: a studio that of-fers visual solutions for ex-port and a training and spe-cialization center for young talent with basic preparation

in design, communications, marketing, architecture, plas-tic arts and film, among other disciplines.

The areas are mutually supportive. Boxel Workshops, the companys training cen-ter, uses the studios technol-ogy to find, first-hand, people with creativity and training in the processes they need to ensure a privileged spot in the industry.

Between 2006 and 2013, 400 young people have come through Boxels doors. Some of them become part of the firms team after graduating, either temporarily or perma-nently, while others establish their own companies else-where in the country or join large projects abroad.

Human resources are extremely important in this industry. You have to really know who you will be work-ing with because you often

get involved in long projects, says Reyes. Thus, Boxel Workshops achieves two goals simultaneously: improv-ing the academic training of future creative professionals and increasing the chances to renew its workforce or grow as new orders come in.

I am positive that this will be the industry that will fight unemployment in Mexico and strengthen the countrys social relations with the world. It is a key sector for the global economy, af-firms Reyes.

the Challenges India, the Philippines, Ro-mania, China and Korea are competing to get the largest slice of a market pie valued at 170 million usd, according to Reyes estimates.

Large studios in the US have found opportunities in these countries to lower

production costs, by develop-ing their infrastructure and human capital for specific projects. According to Reyes, some studios have opted to send specialized staff to these nations to train and oversee the work instead of financing large workforces in their own studios. He adds that many of them have discovered that is not always a viable option because the physical distance from the parent firm com-plicates reviewing and cor-recting processes, therefore extending the delivery times of the projects.

This is exactly where Boxel comes in: as the best solution for US production companies. With us, projects are authorized at the sec-ond review. And if there is a problem, we can be with our clients and solve it personally. We are two hours away from Los Angeles, he boasts.

Mexicos Partner Mexicos Partner

He adds that the cost of living in Mexico is lower than in the US, reducing payroll numbers while guaranteeing respectable salaries for Mexi-can creative professionals. Our work might not be 80% cheaper than Indias but it can still be 40% lower [than in the US] and my colleagues make a good living, says Reyes.

He concludes by saying that the country has everything to become the strategic collab-orator to the US and Canada in this sector. He believes govern-ments are analyzing and un-derstanding the importance of the industry and are beginning to understand that investments must be allocated to training and certifying talent to make Mexico the leading player, the one that produces better work, in less time and at more com-petitive costs. N

www.boxelinteractive.com

photo archive

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Negocios ProMxico |

32 August 2013

| Negocios ProMxico

August 2013

by ANTONIO VzqUEz

ASTROLOL cONqUeRS SPAce IN ITUNeS

In less than two weeks, Skyport, a video game created by the Mexican firm Astrolol, became a favorite among

Apple iTunes users, with over 25,000 downloads.

In early July 2013, Astrolol, a Mexican mobile device enter-tainment company, launched its video game Skyport on iTunes, which in less than three weeks has been valued at 364,230 usd, more than double the initial investment, by SensorTower. That is a goal that no other Mexican IP has achieved in the Apple iTunes AppStore.

The game has been given a four star average on the five star rating that iTunes customers can award an ap-plication.

Astrolol is a Mexican business created in 2012. While still very young, the company is supported by the experience of its CEO, Fran-cisco Casanova Parra, who for four years led Digital Chocolate Mexico, an inter-national mobile device game firm founded in 2003, with offices in the US, Spain, Fin-land and India.

Digital Chocolate began a process of optimizing re-sources and shut its branch in Mexico. Before it closed, I began working on a new project, like Astrolol, and that is how Skyport was con-ceived, recalls Casanova.

Skyport is a Farmville-type game that became fa-mous on Facebook in which players collect airplanes, send them around the world, invest money and purchase new planes until completing a fleet with different aircraft.

The game focuses on a micro transaction model; players earn Aircoins they can invest to expand their airport and collect more aircraft. It is very simple but for us, Sky-port has achieved one of its main goals, since it got us our first investor says Casanova.

The company maintained itself with its own limited resources during Astrolols first takeoff in 2012. Two graphic artists, one designer and Casanova were all that was needed for Skyport to be launched into the Appstore in 2013.

and the Tecnolgico de Mon-terrey (ITESM) two of the leading private education insti-tutions in Mexico Francisco Casanova founded Digital Chocolate in Mexico in 2009.

Since then and until 2012, he led several game projects for iTunes and other platforms such as Android, Facebook, Google Games, Spill and so on.

The difference between Astrolol and other companies is the knowledge behind it, claims Casanova. Being part of Digital Chocolate opened new doors for us internation-ally. But the work system we are implementing is different from other places. We offer our collaborators the chance to earn more money within the company. We want a deep commitment from every per-son and in our six months as a new business, we offer con-sulting in addition to game projects, helping the firm and its employees to grow, he asserts.

Casanova explains that As-trolols confidence in its video game apps for iTunes lies in the innovation in gameplay and relevant business models that are of interest to Apple users.

Every company does it; we look for our own market niche, especially to create em-pathy with large brands. Its part of our growth strategy, says Casanova.

After Skyport, the firm will launch Monster Pop Diary, which will closely resemble Candy Crush a famous mo-bile social game.

In the future, Astrolol plans to create more projects that attract investors and continue, via outsourcing, to offer con-sulting services to companies that design apps for Apple, with strong brands that people love and can have fun with. N

www.astrolol.com

Mexicos Partner Mexicos Partner

Our investor is from Monterrey but instead of diving into Skyport we went on to create a new project relevant to what players want right now adds Casanova.

Having worked at Digital Chocolate Trip Hawkins busi-ness, who built Electronic Arts,

3DO, worked on the famous franchise Madden and designed games such as Rollercoaster Rush 3D, Beach Mini Golf or Kings & Warlords gave this young entrepreneur the right set of tools to launch Astrolol.

Having studied in the Uni-versidad Iberoamericana (UIA)

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Negocios ProMxico |

34 August 2013

| Negocios ProMxico

August 2013

GRAN TIKI GAMeS: for The BesT AgreemenTs

The conquest of interactive televisions through video games is brewing in western Mexico. Gran Tiki Games is part of the new digital entertainment trend and it is surging forward.

by OMAR MAGAA

Gran Tiki Games is a Mexi-can startup with five years of experience. During that time, it has focused on ex-porting its video games using the platforms of the largest video game distributors in the world.

This company with global aspirations is located in Gua-dalajara, Jalisco, where there has been an important boom in information technology and entertainment in recent years. Fifteen employees work in its head office but a large part of

firms CEO, its strategy was to review and learn how business opportunities were created in international markets, espe-cially through the examples of countries such as Canada, Germany, the US, Sweden, the Netherlands and Spain, where some companies have more than 20 years of experience.

The next steps in this sector-recognition dynamic

into the US, Brazil and Ger-man markets and to do so it intends to make contact at every show with the largest content distributors such as Electronic Arts and Apple, medium-sized companies that establish work agreements via outsourcing and com-panies committed to team work, mainly from Spain, Holland and Germany that

Our added value [as a Mexican industry compared to other countries] is the existing creativity and talent. The third point we need is marketing and distribution. It is one of the niches we need to work on, he explains.

In addition, Mexico has federal and state fu