The Monterrey International City of Knowledge: The Vision

By Jaime Parada
CEO and President, Monterrey International City of Knowledge

Twelve years have passed since the launch of the North American Free Trade Agreement (NAFTA). NAFTA raised expectations for accelerated economic growth in Mexico, but the general feeling in our country is that the anticipated sustainable development has not occurred at the rate we had hoped.

Manufacturing plants hiring cheap labor (“maquiladoras”) in proximity to the world’s largest economy raised the quality of life for Mexicans near the border in the mid-1990s, but some of the gains were short lived. Other nations, with considerably cheaper labor costs, eroded Mexico’s relative advantage in some low-cost manufacturing sectors and took away market share. It quickly became apparent that Mexico needed a parallel vision or model with which to build stable, long-term economic growth.

To address this situation, the Governor of Nuevo León, México, initiated the Monterrey International City of Knowledge Program (MICK) in November 2004. The program’s strategic goal is to build a knowledge-based economy for the region based on innovation, using the talent and creativity of the region’s more than four million citizens. Other regions, notably in Korea, Spain, and Ireland, have undertaken similar aggressive programs with startling success. There is a clear relationship between economic growth and the investment made in research and development and innovation (R&D+i). South Korea, for example, invested an average of about 0.4 percent of its GDP annually into R&D in the 1970s and had a GDP per capita of $500 (USD). Thirtyfive years later, after committing to growing its knowledge economy, South Korea today invests 2.8 percent of its GDP in R&D, and its per capita GDP is almost $20,000 (USD).

The Monterrey International City of Knowledge Program

Understanding that there are several possible definitions of what a “Knowledge City” could be, the government of the state of Nuevo León visualizes the MICK as a grand alliance among universities, companies, and government in a “triple helix” whose main purpose is to generate economic growth via innovation. The MICK represents not just constant improvement but disruptive change that imposes a new standard for which everyone in the community strives.

It is not manufacturing, it is “mindfacturing.” It is not fundamentally a real estate project, but it is very important to have technology parks where researchers and private companies can collaborate. It is not a single university campus but broad connections among many universities, each with a wide range of talent. Finally, the MICK is not a short-term project but a new way of life. It is not “made in Mexico,” but “created in Mexico.” The state government’s long-term vision is to increase Nuevo León’s per capita GDP by growing and attracting knowledge industries and activities and to promote an innovation culture throughout the state.

There are six basic strategies for the program:

To redesign the curricula of the education system.
To attract new research centers and investment in technology-based companies to Monterrey.
To promote innovation in existing companies
To promote entrepreneurship and new company formation
To increase urban infrastructure improvements
To promote a culture of innovation and technology

For example, in education, the state has redesigned the academic agenda of high school and college institutions to emphasize five strategic technology areas (Biotechnology, Health Sciences, Nanotechnology, Mechatronics, and Information Technology). In coordination with the State Ministry of Education, it has launched an initiative called “Innovec” to teach basic sciences in real-world situations at the elementary school level, simultaneously fostering an interest in sciences and innovation.

To attract new research centers and innovative technology companies, the state has begun constructing the Research and Innovation Technology Park (PIIT), close to Monterrey in the town of Apodaca. The main purpose of the PIIT is to integrate innovation, research, and development through the linkage of universities, companies, and R&D centers. The first phase of the PIIT consists of nine centers. Three of them are from universities: Monterrey Tech, the State University of Nuevo León, and the University of Monterrey. Two more are centers by Jaime Parada CEO and President, Monterrey International City of Knowledge Texas Business Review 3 February 2008 ...today in Monterrey, there is a new “business philosophy” whereby large companies have multiple suppliers for different parts of their production systems, and their relationships with suppliers are mainly short-term, only for the duration of a specific project. from the National Science and Technology Council (CONACYT): the Engineering and Industrial Development Center (CIDESI) and the Advanced Materials Research Center (CIMAV). Also committed to locating in the PIIT are the Research and Advanced Studies Center (CINVESTAV), the Monterrey IT Cluster (a group of 42 small and mediumsized software enterprises), the Mexican RFID company IDZ, and the State of Nuevo León’s Institute of Water.

The attraction of research centers and the creation of new companies in Monterrey is not limited to the PIIT but has spread to other local and regional institutions over the past 18 months. Local universities recently have established 15 more R&D centers as well as three high technology business incubators. Local manufacturing firms in Monterrey have launched at least three product design centers as well.

The state understands that the Monterrey International City of Knowledge program is a long-term strategy that will take years to develop, but the rewards---a diversified economy with a strong base of homegrown technology firms thriving on innovative ideas---are very much worth the risks.

Source: The University of Texas at Austin
BUREAU OF BUSINESS RESEARCH
IC² Institute
1 University Station A0300
Austin, Texas 78712

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