EL PASO, Texas (Border Report) — Large U.S. companies have run manufacturing operations in Juarez, Mexico, for the past 50 years, yet only a handful of local businesses have managed to become part of their supply chain.
Two business incubators — one based in El Paso, the other one in Juarez — are teaming up to change that, and they’re being backed by Microsoft Corp.
“The maquiladoras (foreign-owned assembly plants) input over $39 billion into their operations every year, but only 2 percent of that are El Paso or Juarez suppliers. Our goal with the Bridge Accelerator is to change that. We can definitely do it through the use of technology, and having Microsoft as a sponsor will most definitely help,” said Ricardo Mora, CEO of the Juarez Technology Hub, or T-Hub.
T-Hub and The Hub for Human Innovation in El Paso this summer taught 12 small-business owners how to incorporate technology into the way they do business. The result: $1.5 million in new orders, new investors pledging $250,000 to them and the creation of 33 new jobs.
The outcome prompted Microsoft to extend the pilot program known as the Bridge Accelerator for another three years. The partners will pick new cohorts of 12 companies to train twice a year through 2022.
Mora said many small and medium-sized businesses along the border underutilize technology. “We helped them change their mindset. Instead of just being a supplier that needs to deliver ‘X-amount’ of pieces on time, they started understanding their capabilities. … If they’re doing business with a manufacturing plant in Juarez, most likely there’s a sister operation in El Paso and perhaps another one in Michigan or Germany. We prepared them to sell globally,” he said.
Carlos Martinez Vela, CEO of The Hub for Human Innovation, said many American companies overlook a slam-dunk opportunity for growth by ignoring the gigantic maquiladora industry south of the border. The international manufacturers employ 250,000 Mexican workers and sustain 50,000 jobs in El Paso, according to the University of Texas at El Paso’s Department of Economics and Finance, as well as business groups like the Tecma Group of Companies.
“There are many Fortune 500 companies operating over there. (Local businesses) can overcome their fears by talking to those that are already doing business over there,” Martinez said. “The border is real, yes, but there are many of us who are privileged to cross back and forth every day. … There are, however, different business practices and a culture of doing business that you have to learn.”
The Bridge Accelerator also wants to help companies already doing business with the maquiladoras expand those relationships. “In order to help these companies grow their business, we need to identify new opportunities, develop new capabilities, connect them and help them market themselves in different ways,” Martinez said.
Mora said the Bridge Accelerator will pick the next 12 program participants around January. Information for the program is available online.