In the last installment, I talked about the new IT Industry Competitiveness Index and the importance of a healthy R&D environment for a productive and innovative country. Today, let's look at what is an even more important ingredient for an IT nation: people, or what the Index refers to as human capital. How does the Nearshore stack up?
The compilers of the Index (Business Software Alliance and the Economist Intelligence Unit) say these are the factors they consider when rating a country's human capital: enrollment in higher education programs; enrollment in tertiary-level science programs; number of people employed in the IT sector; and the item assigned the most weight: quality of tech skills.
One thing that jumped out of the rankings is that there are only two countries from the Nearshore region on the BSA's "top 10 best human capital" list: U.S. and Canada. (List at end.) Another point of possible concern is that Mexico fell in the analyst's evaluation since 2009, dropping one spot to 47th place, tied with Brazil. Overall enrollment in college has gone up slightly in Mexico, but numbers in science and engineering are down, according to data from UNESCO. Dropping one spot is not a big deal, but it's not good news either.
Still, the Economist researchers say Mexico has the second-largest IT workforce in Latin America, at 300,000 strong. What the Index assessment tells us is that Mexico government and business have to work together to keep that number heading upward if the growing Mexican sourcing industry is to keep growing. China is graded highly in this category because this year alone it stands to graduate 400,000 IT workers, says one of the consultants who worked on the Index. "And the quality is there on a number of levels," he adds.
Not to pick on Mexico. The country jumped up four spots in the overall rankings, due mostly to "streamlining of business regulations" and a "significant boost" in patent filings. That latter item can be seen as a great harbinger.
It's easy to dismiss a number on a ranking list as just a number, but take a minute to ask "How did they arrive at that number?" Take just a minute to ask if there's something deeper behind it.
The point is that the Nearshore success stories like Mexico have become success stories because of the people in their IT outsourcing industry. You don't get anywhere on the global IT stage without ambitious individuals who launch start-ups and smart, energetic people to work for them. All the Nearshore IT countries should look at these Index rankings as a reminder that raising talented citizens and investing in their education is the best way forward.
Last, for my fellow info-junkies, here are the top 10 countries rated in terms of doing the most to develop their IT workforce:
1. U.S.
2. China
3. Australia
4. South Korea
5. United Kingdom
6. New Zealand
7. Ireland
8. Taiwan
9. Canada
10. India
If you're into this kind of data, the BSA site lets you sort the Index results by 66 countries and by benchmark category (human capital, IT infrastructure, etc). There's a lot of information particularly for anyone who is just checking out Nearshoring for the first time.
Dennis Barker
