Tradeology, the ITA Blog

Leslie Wilson is the Mexico Desk Officer for the U.S. Department of Commerce

A neighbor, an ally, and our third-largest trading partner: Mexico – and its relationship with the U.S. – has never been more important. As part of the ongoing work to reinforce that relationship, Mexico has published a new and innovative National Cluster Map, which identifies areas for investment and job creation and enhances regional economic development between the United States and Mexico.

Mexico-US flag

On July 22, 2016, in conjunction with Mexican President Enrique Peña Nieto’s visit to Washington, D.C., the Mexican government released the map as a free, open website available to the public around the world. During his visit, President Peña Nieto met with U.S. President Barack Obama and Department of Commerce Secretary Penny Pritzker, among others, to discuss ways to continue strengthening the U.S.-Mexico relationship. For example, as Mexico is the United States’ third largest trading partner, $1.5 billion in trade crosses our border every day.

The site, a key milestone of both governments’ efforts to increase North American competitiveness, is a component of the U.S.-Mexico High Level Economic Dialogue (HLED). Through the HLED, the Innovation Cluster Subcommittee of the Mexico-U.S. Entrepreneurship and Innovation Council (MUSEIC) – in collaboration with Mexico’s National Entrepreneurship Institute (INADEM) and the U.S. Department of Commerce’s Economic Development Administration (EDA) and International Trade Administration (ITA) – has worked to develop binational, compatible cluster maps that identify geographic concentrations of interconnected companies, suppliers, service providers, and associated institutions that are present in the United States and Mexico.

The U.S. and Mexican maps can be used to enhance regional economic development by identifying an area’s assets and creating important connections between the public and private sectors. They can also be used by innovators working in similar sectors and spaces to share best practices, identify opportunities for public investment, and serve as a framework for understanding drivers of private investment and job creation.

Cluster Mapping as a Tool for Regional Integration                                     

According to U.S. Assistant Secretary of Commerce for Economic Development Jay Williams, “The Mexico National Cluster Map is essential for understanding the competitive landscape of North America and facilitating regional collaboration. The U.S. and Mexican maps will help regions work together to capitalize on assets and discuss best practices in economic development, policy, and innovation.”

To further the goal of regional integration, President Obama, President Peña Nieto, and Canadian Prime Minister Justin Trudeau committed to establishing a broader North American Cluster Map at the most recent North American Leaders’ Summit held in June to best display synergies among the major regional economies. The development of Canada’s cluster map will be the next step in achieving this goal.

EDA, in partnership with Harvard University, runs the U.S. Cluster Mapping website, which offers a member directory that profiles cluster initiatives throughout the country and provides statistical and visual data that assess business environment characteristics.

How Mexico Created Its Map

Mexico’s cluster map was developed by Mexico’s Statistics Agency (INEGI) based on 2014 census data, the latest cluster definitions  by Michael Porter, Scott Stern, and Mercedes Delgado (also used in the U.S. map) and the location quotients of the country’s 32 states. It combines the Porter, Stern, and Delgado methodology using employment and occupation data, and the Monterrey Institute of Technology and Innovation (Tec de Monterrey) methodology adopted by INADEM to identify strategic sectors in Mexico. Mexico has undertaken a data alignment and cluster definition matching exercise so the data can be used and analyzed in a binational fashion, ensuring the compatibility of the information provided in the U.S. and Mexican maps.

“Mexico has convened key stakeholders of government, academia, and private industry to develop its Cluster Map and a global strategy for Cluster Development,” said Enrique Jacob, President of INADEM. “The map helps to identify smart specializations, promote private industry investment, support new public policies in innovation, and foster global value chains.”

Dynamic initiatives such as the U.S.-Mexico binational cluster mapping project offer a powerful knowledge-based tool that can generate clear, positive outcomes for government, industry, academia, civil society, and entrepreneurs. Specifically, the U.S and Mexican cluster maps provide reliable data essential to foster regional and global value chains, support investment decisions, and enforce data-oriented public policy. In fact, a full 40 percent of the content of Mexican exports is comprised of U.S. inputs. This means that of all the products Americans purchase that are manufactured in Mexico, about 40 percent of those products’ value-added components are made here in the United States. This reflects the highly integrated nature of our bilateral value chains.

The compatibility of the U.S. and Mexican maps is also a critical step toward the development of cross-border  economic development strategies that can help drive the sustainable, long-term economic vitality of urban and rural communities along the U.S.-Mexico border.  And most importantly, these maps underscore the importance of using innovative tools to best leverage our connections to create jobs in both countries and across the region.