an important partner for uk companies in IT and creative industries

April 30th, 2014

Bilateral trade between Mexico and the UK (2003-2013)

2

Exports

Mill

ions

dolla

rs

1,242

733

2,508

1,438

-509-

1,070

Imports Trade balance

Source: ProMéxico with information of Banxico, 2013.

Source: ProMéxico with information of INEGI / Bank of Mexico.

Solid macroeconomic environment

3

Evolution of inflation, exports and international reserves in Mexico (2000- 2013)

Infllation 2013 Reserves 2013 Exports 2013

3.97%

176 billion USD

380 billion USD

ManufacturesOilPrimaryReservesInflation

Record-high

Record-high

Bill

ion U

SD

4

Mexico’s global leadership

Source: ProMéxico with information of FEMIA, GTA, AMIA y OICA. .

IT • 3rd largest exporter in the world.

AUTOMOTIVE AND AUTOPARTS• 8th producer and 4th exporter globally of new light vehicles in the world.

ELECTRIC-ELECTRONIC• Leading flat television screen exporter in the world.

AEROSPACE• Mexico is the 6th supplier to the American aerospace industry.

We have the largest film and video games market in Latin America.

We rank first in creative industries in Latin America, according to UNCTAD.

Source: ProMéxico with information of CEPAL/ PWC, Global Entertainment and Media Outlook/ UNCTAD, Creative Economy Report 2010.

We have the largest talent pool for the IT and creative industry in Latin America.

We are building the Digital Creative City in Guadalajara, Mexico.

Latin America’s creative hub

We are the 5th country with the largest movie attendance.

5

Competitive costs

Internal market

Human capital

Strategic position

Government support

Mexico’s main competitive advantages

6

7

6.02

5.85

5.73

5.18

4.83

4.44

3.8

Mexico

Russia

India

Korea

Indonesia

China

Brazil

Quality of our labor force

According to IMD, Mexico offers a higher quality and availability of labor force and talent in comparison with other emerging markets.

Ran

k

Source: ProMéxico with information of IMD Competitiveness Yearbook, 2012

Source: ProMéxico with information of UNESCO.

Brazil México Germany Spain UK US

PERCENTAGE OF GRADUATES IN THE AREAS OF ENGINEERING AND MANUFACTURING

Mexico’s graduates in engineering and manufacturing

8

9

2nd country with the largest percentage of employment in the industry

Contribution of copyright industries to national employment

Source: ProMéxico with information of UNESCO, Creative Economy Report, 2013.

Phili

ppin

es

Mexic

o

Bhuta

n

Neth

erl

ands

US

A

Aust

ralia

Mala

ysi

a

Russ

ia

Hungary

Slo

venia

Chin

a

Kore

a

Sin

gap

ore

Colo

mbia

Tanza

nia

Latv

ia

Canada

Fin

lan

d

Trin

idad

Bulg

ari

a

Highly Skilled Professionals

Source: MexicoIT/ Carnegie Mellon University, 2010 (http://www.sei.cmu.edu/tspsymposium/past-proceedings/2010/Panel_Kernel.pdf)

• 6 out of 10 PSP certified developers in the world are Mexicans.

889,368

578,105

Mexico´s IT Professionals Workforce 2000 - 2014

11

Youth

Old-age

DemographicBonus

Men Women

Demographics are on our side

Source: ProMéxico with information of US Census Bureau: http://www.census.gov/population/international/data/idb/informationGateway.php ; INEGI, 2011; Population Projections for Mexico 2005-2050, CONAPO. *Population (in millions) by age group.

118 million inhabitants with a median of 27 years. 52 million in the labor force. According to forecasts, there will be more than 83 million

people of productive age by 2020.

12

Mexico’s Retail Sales IndexIndex 2003=100; SA

GDP by PPP (1990-2018)

• $15,000 USD= median income.• According to forecasts, income will grow 20%

by 2016.

Large domestic market

Source: INEGI/ IMF.

Historic Forecast

• Geographic proximity to NAFTA market

• Similar time zone

• Cultural affinity

• Natural supplier for Latin American Markets

+/- 2 hours

Strategic location and time zone

13

Competitiveness

Source: ProMéxico with information of KPMG, Competitive Alternatives, 2014.

Software Development International Results (US=100)

Video Game productionInternational Results (US=100)

Cost Index Cost Index

México

Canadá

UK

Holanda

Australia

Japón

Francia

USA

Italia

Alemania

México

Canadá

UK

Holanda

Australia

Japón

Francia

USA

Italia

Alemania

14

Solid infrastructure

15Source: ProMéxico with information of Ministry of Economy, 2013.

technology parks30clusters that gather more than companies30 1,000

400development centers with quality certifications3,200companies

related with the IT Industry

Government Support in the IT sector

16

PROSOFT, created by the Ministry of Economy,

provides financial aid to invest in

and to develop IT projects in

Mexico.

MexicoFIRST is an

initiative supported

by the Ministry of Economy and the

World Bank, whose main objective is

the generation of human

capital in the IT sector.

ProMéxicoSupport for investment

projects that promote

innovation, technologica

l development and R&D in the country.

INNOVATEC PROINNOV

APrograms that foster

the developmen

t and innovation in IT projects.

Support projects that

propose investment

in infrastructure for R&D.

Initiative executed by the CANIETI

and supported

by the Mexican

Ministry of Economy. Its objective is to promote

Mexico as anideal hub for

the establishme

nt of IT enterprises.

The ProAV Fund

The PROAV Fund grants to foreign and local film and audio-visual productions an incentive of up to 7.5% rebate.

• Apocalypto• Elysium• Cristiada• Chávez

17

Film-Friendly México

18

ProMéxico launched Film Friendly México, an online web resource tool, where you are able to find:• Locations. • Production managers. • Soundstages. • Talent. • Skilled talent. • Detailed production guide in

English.

Leader in relevant events

19

www.promexico.gob.mx

promexico@promexico.gob.mx

@ProMexicoTW

+52 (55) 54 47 7000Camino a Santa Teresa 1679, Col. Jardines del PedregalCP 01900, México, D.F.

20

Case Study: Information Technology

• Infosys opened two centers in Monterrey, Mexico, over the course of 4 years.

• Offers IT Help Desk, design of web-interfaces and other BPO and IT-related services.

• Mexico was chosen because of its population size, large graduate pool, proximity to US, and Spanish speaking population.

• The company has gained approximately 30 new clients after the launch of Mexico’s operation.

• Operations are currently carried out in three modern centers: two in Gualadajara and one in Querétaro.

• Offers application development and testing, consulting, infrastructure services and BPO.

• Mexico is one of the most important links for the expansion strategy of the company in the region.

• Mexico’s competitive advantages: closeness in distance and time zone to the United States, political and economic stability, and high academic level of graduate professionals. 21

Exports of Medium and high manufactures as percentage of the GDP (2013)*

22Source: ProMéxico with information of IHS – Global Insight. * Only G20 nations.

28.9%24.8%16.7%14.1%12.4%

1

2

3

4

5

Germany

South Korea

China

Mexico

France

A sophisticated economy

Creative industries chain

23

Creativeindustries

app

TV

books

moviesVideo games

24

IT Mexico’s Market Overview

Source: Business Monitor International, Information Technology Report, Q3 2011.

2008 2009 2010 2011 2012 2013 2014Total IT Market (Billion US$) 12.7 10.7 12.5 14.4 16.4 18.2 20.0

Hardware (Billion US$) 6.0 4.9 6.1 6.7 7.5 8.4 9.1Services (Billion US$) 4.3 3.7 4.1 5.0 5.8 6.4 7.1Software (Billion US$) 2.4 2.1 2.3 2.7 3.1 3.4 3.8

IT Market as % GDP 1.17% 1.21% 1.20% 1.20% 1.21% 1.22% 1.22%IT market, nominal value growth, % Y-Y 14% -16% 17% 15% 14% 11% 10%