Daily Archives: September 4, 2011

Education is Getting Worse by the Day

According to a recent article in the Washington Times which indicates that scores show students aren’t ready for college, only 25% of students cleared all of ACT’s college preparedness benchmarks. This says that 3 out of 4 graduates are not prepared for college and will likely need to take at least one remedial class. This is appalling!

Not only are six of seven American adults not “proficient” at math (as per an article on why American consumers can’t add), but one in four can’t even handle College level English! (Despite the fact that at least four in five households speak English as a first language!)

How did public education get so bad? And how will we ever solve the talent crunch without more highly educated graduates?

Near-shoring: Advantage Mexico

As per this recent article in Logistics Management on Near-Shoring/Right-Shoring Strategies, a recent poll of 80 C-level executives across more than 15 industries by AlixPartners found that 63% of senior executives chose Mexico as the most attractive locale for re-sourcing manufacturing closer to the U.S. market. With its geographical proximity and recent improvements in transportation services between the borders, Mexico is regaining its attractiveness. If 33% of senior executives are going to re-shore within the next three years, Mexico could be on track to regain its former glory. Especially since its attractiveness ranking by these executives was more than seven times that of Central America and Brazil.

Why is Mexico more attractive than the BRIC? In addition to near-shoring, lower freight costs, and improved speed-to-market times, as cited in the article, it’s also lower cost. Costs in the BRIC are rising aggressively. Manufacturing is getting more expensive by the day in China. Services are getting more expensive by the day in India. Raw Material costs are rising in Russia. And inflation in Brazil is over 6%.

Plus, there are the time-zone advantages, cultural alignment with the rest of North America, workforce passion, and free trade zones. Security is still a concern, but the number one cause of death for foreigners in Mexico is still car accidents, not crime. Crime has doubled since the economic crisis of 1994, but most of the crime is non-violent. Unfortunately, “organized crime” (gangs and cartels) is still very violent and a real concern, especially in the northern border region. However, near-shoring to other regions of Mexico is, on average, not much more of a security concern than Home-Shoring in the more dangerous US cities, and a viable alternative.