One of the cringiest moments at the Mexican Christmas Eve parties of my childhood would be when my tías (aunties) sat around watching folks unwrap their presents. “¡Qué modernou!” (How modern!) they would coo in unison, whenever a gadget or fluorescent pair of sneakers came out of a box. They’d really hit that “r” to accentuate the faux American accent they were imitating. Beyond the cringe, the implication was that “modernity” (gadgets, and progress generally) was both inherently good and foreign.
Across Latin America, when it comes to tech — and the eye-watering funding and growth the sector has come to imply — it would seem we’ve all become my aunties.
That is not to say the well-greased hype machine around tech is unique to the region. Part of startup culture worldwide is based on selling pipe dreams that could someday go big. Latin America, however, suffers from a strange combination of overconfidence and low self-esteem that has made it unquestioningly fond of incoming foreign tech.
The overconfidence comes from the tech boom that Latin America recently experienced alongside the rest of the world. True, at many points, the region’s VC funding or its adoption of technological solutions topped the global rankings, but it could easily be argued that Latin America was catching up to places like India or China, where adoption of payment apps and last-mile delivery was miles ahead.
We’ve been seeing a similar tech triumphalism more recently surrounding the nearshoring trend — one in which countries like Mexico, Colombia, and Guatemala could be set to capture much of the China-based industrial capacity currently servicing the U.S. By definition, this sort of increased industrial output would ultimately be dependent on U.S. and foreign investment. That in itself is not a bad thing, but the recent cajoling and backstabbing to get a slice of the nearshoring pie reveals how unquestioningly the region is willing to take it.
It might explain why Mexico’s usually immovable president folded like a wet piece of paper to Elon Musk’s confirmation that Tesla would be setting up shop in the country’s north — a region the president had previously insisted was too arid for such a development.
“Don’t look a gift gigafactory in the mouth,” the old saying goes, but contrast Mexico’s reaction with India’s recent clapback to Musk, when the billionaire failed to secure tariff concessions from the Modi government.
Perhaps Mexico, as opposed to India, can’t afford to lose this opportunity. But Mexico doesn’t seem to be putting in the work to end up in a position where it can haggle with Musk. In an upcoming Rest of World report on Mexico’s electric vehicle transition, we’ve found from experts in the field that the country’s local auto industry is nowhere near making the most of the arrival of those like Tesla. There seems to be an excess of bluster, and not enough work being put in to make the dual potential opportunities of the rise of EVs and nearshoring a success.
