Optimism and Challenges in Mexico’s Future
Karen Harris, the global leader of Megatrends at Bain, notes that there is more optimism about Mexico’s future and opportunities outside of Mexico than within the country. She explains, “To see certain things, you need distance; it’s like an impressionist painting: when you’re very close, you see color splotches and formless masses. With a bit of distance, you can observe the picture with more clarity and better perspective.”
Mexico faces significant challenges, but opportunities are present, according to Harris. “Among global companies, there is a strong conviction that the integration between Mexico and the United States will continue, and Mexico will remain an ideal location for doing business in North America.”
The Future of Manufacturing: Robots and AI
Harris highlights a future scenario that is not widely discussed in Mexico: by 2040, manufacturing worldwide will be primarily carried out by robots. “This is only 15 years away, and it will have profound consequences. As technology becomes more sophisticated, factories will require fewer workers, and Mexico’s advantages in labor-intensive manufacturing will lose relevance.”
The shift in manufacturing is radical and accelerating, not slowing down, Harris asserts. “Mexico’s challenge is to adapt, and it will, as it has demonstrated its ability to do so. It has highly skilled technicians, engineers, and professionals who are very competitive.”
When assessing competitiveness, Harris points out the importance of energy costs. “Any process or industry requiring significant energy at low cost would initially choose Texas or Louisiana, where energy costs are among the lowest globally. However, Mexico shares similar geological conditions as the southern United States.”
Artificial Intelligence and Automation
Harris’s perspective on Artificial Intelligence (AI) is intriguing, especially as she compares it to robotization and automation. “I am very interested in AI and see its potential. In recent years, there have been many advancements in manufacturing through robotization and automation, and now it’s moving into services, such as automated checkout in stores and automated room cleaning. Soon, we’ll see machines preparing burgers in many locations.”
The United States’ Role in the World
What will become more widespread in 10 to 15 years is already beginning, Harris warns. “We do not forecast US isolation but rather a redefinition of its role in the world, accompanied by a reassessment of many domestic matters. Our focus is on understanding why things happen and their impact, not making policy recommendations. In Washington, there’s concern about domestic issues: more than half the population has seen stagnant or declining living standards for the past 20 years. There needs to be a response to this concern. I’m not saying the proposals are correct, but identifying the problem is progress.”
Regarding the United States’ role in the world, “the ongoing experiment is leveling the playing field against China, which has implications for North American partners. There will be growing demand for a unified trade policy towards China. This demand applies to Mexico and Canada, bringing many benefits for the region. The US cannot achieve its long-term strategic vision without them.”
US-Mexico Relations and Latin America
Harris foresees a new phase in US-Latin American relations: “There is increasing attention to this region after decades of neglect. Some current conflicts are part of this heightened focus. I am confident that, in the long run, we will see a more robust agenda with greater US presence in Latin America and more development opportunities for the region.”
Key Questions and Answers
- What is Karen Harris’s role at Bain? Karen Harris leads the Megatrends team at Bain, a group she founded in 2008 that incorporates geopolitical, technological, and social aspects into its analyses.
- What does Harris predict about manufacturing in 2040? By 2040, Harris expects manufacturing to be primarily carried out by robots, which will require fewer human workers and diminish Mexico’s labor-intensive manufacturing advantages.
- How does Harris view the future role of the United States in the world? The US is redefining its global role, focusing on domestic issues like stagnant living standards. This shift will require a unified trade policy towards China, with increased collaboration between the US, Mexico, and Canada.
- What is Harris’s outlook on US-Mexico relations and Latin America? There is growing attention to Latin America, leading to increased US presence and development opportunities in the region.
