Mexico City’s boom shows Mexico’s creative potential. A skills gap holds the country back.
It’s unusual for a superstar to spend weeks in an emerging market. Even more unusual to devote a star’s social media feed to that market’s creative scene. But that’s what Fred Again did last month in Mexico City prior to hosting a surprise gig there.
Mexico’s creative sector accounted for 3% of GDP in 2020. The recent boom in film production across Mexico City suggests that’s a floor not a ceiling. In six years, Mexico City has transformed into a global creative capital. This success highlights a challenge that Claudia Sheinbaum needs to address: skills.
Mexico City’s film economy grew 80% in 2021, hosting over 1,200 productions in 2022. In 2023, six of the 35 Super Bowl commercials were produced there. This growth has helped to offset the deep cuts forced on culture programmes by AMLO. However, the entire country's production expenditure still doesn’t match the U.S. state of Georgia’s.
Sheinbaum’s new Economy Minister, Marcelo Ebrard, knows there’s work to do. In 2023, he met with Hollywood executives. They announced a plan to bring in more production with tax incentives. But production costs have risen due to global demand for Mexico’s limited pool of experienced crew. The skills gap threatens to weaken Mexico’s creative hub status and render any tax scheme DOA.
It's not just production. Hospitality, agriculture, and manufacturing are feeling the skills gap. Last year, 75% of Mexican employers struggled to find workers. This is despite a labour market with 10 million untapped workers. The situation is driving up costs, threatening Mexico’s claim as a nearshoring hub.
AMLO made mistakes in education policy, like former president Enrique Peña Nieto’s reforms. But some of his changes could provide Sheinbaum a platform to solve the problem. For instance, AMLO opened 140 “well-being” colleges. These are well funded but have failed to attract students or deliver results. Using existing funds, they could transform into polytechnics and vocational schools.
Sheinbaum has announced a new cabinet department for Science, Humanities, Technology, and Innovation. The new ministry could coordinate a skills curriculum across the revamped well-being schools. In time, this could set conditions for a sustainable talent pipeline.
Executives in LA and London have often seen Mexico as just another cost-efficient location for cash-strapped jobs. Mexico City’s boom offers Mexico the chance to become a global creative powerhouse. Tax incentives for Hollywood studios may help. They’re not enough. Mexico needs a proper skills strategy. Without one, Mexico will continue competing with other emerging markets on a cost basis. With one, Mexico might be able to link its creative and industrial bases, supercharging its status as a leading integrated economy. Sheinbaum must grab the chance.