By Zenyazen Flores
Latin America is the strategic destination for nearshoring due to its proximity to North America. However, the relocation of companies has come up against a talent deficit of technical personnel required to implement electromobility and the energy transition in the region.
The shortage of specialized talent affects all of Latin America.
It is becoming more visible with the region’s foray into electromobility and the growing lithium industry, so the migration of talent and skills between industries will increase.
The United States has more than 900,000 technical staff vacancies, while in Latin America, the technical talent deficit amounts to 1.3 million people, according to projections by the Association for Manufacturing Technology (AMT).
Carlos Mortera, AMT’s director for Latin America, said there is a deficit of technical talent in the Americas, including Mexico.
However, in the case of Mexico, the country’s companies are taking important steps with academia to develop the talent required by the industry.
Luis Lizcano, executive president of the Mexican Federation of the Aerospace Industry, said that it is bad news that there is a deficit of talent.
Still, the good news is that the country can forge talent because it has the advantage of the demographic bonus, which the United States and Europe do not have.
Half of the technicians and engineers in the United States are about to retire.
There are currently 12 million manufacturing jobs in the US, and 53% are over 55 with a retirement age of 65, according to data compiled by Industry Sourcing LLC.
In the United States, the number of technicians and engineers who will retire is five times larger than the entire automotive industry in Mexico.
In this sense, Mexico and Latin America have an opportunity due to their demographic bonus, and there is potential for talent development in direct supply in processes such as carbon composites, electrical-electronic, metal structure processes, forging, casting, plastic injection, 3D printing, CNC machining, and textile and leather.
EXPORT POTENTIAL VS. TALENT SHORTAGE
The Inter-American Development Bank (IDB) projected that the potential gain for Latin America and the Caribbean from nearshoring opportunities in the short and medium term could represent an increase of up to US$78 billion in new exports of goods and services, with significant opportunities for the region in the automotive, textile, pharmaceutical, and renewable energy industries, among others.
According to data from a study to be published soon, Mexico and Brazil would have the greatest opportunities, although all countries would benefit.
Monica Flores, president of ManpowerGroup for Latin America, said that the talent shortage affects the entire Latin American region, something that has become more visible with nearshoring.
She indicated that relocating companies from Asia to Latin America can increase exports of countries in the region.
Central American countries such as Honduras, El Salvador, and Nicaragua are already registering increases in this indicator.
Likewise, Argentina, Brazil, Colombia, Costa Rica, Guatemala, Panama, and Peru are countries that are more conducive to the mobility of talent and the migration of labor sources. At the same time, Mexico is the country that has benefited the most from the relocation of companies in the region.
Flores pointed out that, with nearshoring, there will be a regional alignment in terms of the availability of adequate talent to meet the demand, especially if we consider that in the LatAm region, the talent shortage is 71% in 2023, which means that 7 out of 10 employers have difficulties in finding the talent they need.
Mexico, Brazil, and Argentina are the countries whose exports could grow the most due to the impact of nearshoring, according to IDB data.
However, according to ManpowerGroup data, Brazil and Argentina are the countries in the region where employers have the hardest time filling vacancies with the right talent.
“Near-shoring is a great opportunity but also a great challenge.”
“We have to talk about planning, migration of skills between sectors, migration of people from some regions, and take advantage of what technology allows us.”
“We used to talk about taking talent to where the work is, today we talk about taking the work to where the talent is,” said Mónica Flores, president of ManpowerGroup for Latin America.
NEARSHORING AND LITHIUM
The US State Department organized a ministerial forum on supply chains in July 2022, to which Mexico and Brazil were invited to work on building more resilient value chains.
According to ECLAC’s Raquel Artecona, Mexico and Brazil’s participation in the forum is part of the opportunities that Latin America has in nearshoring, especially in areas such as semiconductor manufacturing and advanced packaging supply chains; high-quality battery supply chains, including batteries for electric vehicles; and critical minerals supply chains.
Argentina, Bolivia, and Chile comprise the so-called Lithium Triangle in LatAm.
The countries are working on projects contributing to the energy transition and electromobility, as lithium is considered a critical mineral for achieving the goals of the Global Climate Action and Sustainable Development (SDG) agendas to reach zero emissions by 2050.
In particular, Argentina is already developing the lithium value chain and training human resources and qualified suppliers to promote technological development and strengthen the industry.
With information from Bloomberg
News Latin America, English news Latin America, nearshoring
More: Latin America news in English, every day from The Rio Times.
In depth
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error