Small and medium enterprises in Mexico

Small and medium enterprises in Mexico generally called PYMEs (Spanish: pequeña y mediana empresa), are an important segment of the Mexican economy. They are classified in two types of small and medium enterprises: family businesses and non-family businesses.[1]

The Mexican Government supports PyMEs since 2004. The Mexican Chamber of Economy with the help of the Mexican government creates different types of programs for the PyMEs that need to improve their participation in the national market and also for the international market. The PyMEs' size is classified by the number of employees they have. The main sectors are manufacturing, commerce and service.

PyMEs in Mexico

As of 2006 there were about 4 million enterprises in Mexico. Out of those 4 million, 99.8% were small and medium enterprises. About 52% of the Mexican GDP is generated by small and medium size enterprises. While the remaining 48% relies on large enterprises. Small and medium size enterprises contribute with the 72% of the formal employment in Mexico. PyMEs are subdivided into: 15% for Micro, 14.5% for small and 22.5% for medium enterprises.[2]

PyMes can be classified by type and size. There is a manufacturing, commerce, and service type. Within these, PyMEs are classified according to the number of employees—10, 50, 250 and more than 250 respectively—into micro, small, medium, and large enterprises. Service enterprises are classed by those with have 10, 50, 100, and more than 100 employees.[3]

PyMEs throughout the nation are distributed by region. About 38% of them in the central part of the country, 17% locate southwest, 6% southeast, 12% northeast and 27% center-west.

There are two types of PyMEs in Mexico (according to their origin). Those that began as family businesses and those formed by more formal partnership. The ones that start as family business are small and only very few of them have some type of projection abroad. These are usually the ones who search for government support mainly for financial and training purposes. The other type of small and Medium size enterprises in Mexico are those who follow an established path. An example of this could be franchises, these do not have a problem of expanding abroad. Franchises are small projection of big enterprises who have already done the market research before entering a new zone. They have all the possible experience on expanding overseas and very little risk on failing because in most cases they go under the concept of a high brand awareness.

PyMEs have been an important part of the country's development, especially in the area of exports. Due to their small size they are versatile, dynamic and have growth potential. This potential also includes entering international markets. They are a major source of job creation in the country and are the most likely to implement new technologies. Since many are located in different regions of the country, they foment local development. The main contribution to enterprises growth lies on PyMEs. The importance of small and medium size enterprises in Mexico has grown through time due to the positive effect these businesses have had on Mexico's economy. Since these enterprises continue becoming more important, government is focusing a lot on supporting them.

On the other hand, they also have some disadvantages. In general PyMEs have not development the habit of reinvesting to improve production or reinvest in equipment. They do not have enough economic resources to hire specialized employees nor to train current ones. This and lack of foresight can lead to insufficient sales, lack of competitiveness, inadequate customer service, low quality and higher prices. Because of the lack of quality control, legal problems such as dealing with VATs and defective products becomes an issue.[4]

Programs for PyME developments

Since 2004, Mexican government has had a number of programs to support PyMEs so that they help Mexico's economy growth. The government has two groups of programs to support PyMEs.The first group helps PyMEs to grow within the national market. The main programs are Emerging Programs, Productive Projects, Centros Mexico Emprende (Mexico undertake program), National System of Loan Guaranties, and Enterprises Consultancy.[5]

The main objective of the Programas Emergentes (Emerging Programs) is to help the economic areas that have been affected by natural disasters. This program achieves this objective through loans with special payment conditions. This help is given to the PyMEs that stop their economic activity because of a natural disaster. The Emerging Programs are coordinated and supervised by "Fondo PyMe." The regulations that this organization point out is that the PyMEs are supported with special resources with the concepts that the directive council determine that are essential to the economic reactivation of the enterprises. These enterprises have to satisfy certain conditions.[6] Proyectos Productivos (Productive Projects) helps to finance investment projects that improve the competitiveness of PyMes. This helps to trigger the creation and maintenance of jobs and regional development. The most important project is the financing. These funds are mostly targeted to production projects. The projects have to help by developing, expansion and consolidation of the enterprises.[7] The Centros Mexico Emprende (Mexico undertake program) is for the execution of public or private services to support PyMEs. The support is given in a comprehensive, accessible, lively, and timely way according to the size and the enterprises potential. The different types of center concepts are: fitting out and infrastructure, designing and updating information systems for planning, and measuring of results generated from the "Centros Mexico Emprende."[8] Sistema Nacional de Garantias (National System of Loan Guaranties) provides PyMEs with easy access to the financing programs with competitive conditions and payment periods.[9] The Consultoria Empresarial (Enterprises Consultancy) is a program that helps PyMEs be more productive and profitable. It achieves this objective through the identification of business intervention programs. These programs are applied to one or more fundamental areas of an enterprise as training and consultancy and the development of instructors and consultants.[10]

Programs for existing PyMEs and international expansion

The second group helps PyMEs to maintain a place and to succeed in the international market. The SPyME (Subsecretaría para la Pequeña y Mediana Empresa) was created to promote, encourage, and design tools and programs with the purpose of creating, consolidating and developing micro, small, and medium enterprises in the international market.[11] The Sub-secretary for Small and Medium Enterprise (SPYME), with the purpose of helping primarily small enterprises, created the Programa Nacional de Capacitación y Consultoría (National Program for Training and Consultancy). This program incorporates improvement actions in areas where weaknesses or opportunities are detected. The program stimulates the consolidation of the entrepreneurship through actions like the instrumentation of innovative methodologies in productive priority sectors. The program also foments the application of strategic programs to improve enterprises management.[12]

The National Program of Training and Consultancy (Programa Nacional de Capacitación y Consulta) divides its operation in four components. The Programa de Consultoría General (Program of General Consultancy), that was created for the projects of major demand identified by chambers and managerial associations, that as well as for state and municipal governments, will look for the support of the Fondo PyME (Fund SME). This program was made to take care of the needs of training and consultancy, across proven methodologies that assure they will have quantifiable results. The Programa Moderniza (Modernization Program), the Secretary of Economy (SE) and the Secretary of Tourism (SECTUR) started a System of Management named "Modernize" that allows to improve the quality of the services offered to the Micro, Small and Medium Enterprises of the tourist sector. The Secretary of Tourism carries out the consultants' formation, which are the only ones authorized to execute the program and to register in SECTUR. The Formación de Consultores PyME – JICA (SME Consultants' Formation – JICA) establishes the formation of advisers specialized in the methodology of the Japan International Cooperation Agency (JICA). The process is based on the application of Japanese tools of improvements of high impact with a lower cost. It lasts approximately one month and a half, and is directed to consultants with more than three years of experience in managerial consultancy. This has allowed relying on a base of specialized consultants that multiplies the efforts to offer specialized services of consultancy that generate more competitive enterprises. The Consultoría Empresarial PyME (SME Managerial Consultancy-JICA) estimulates the development and consolidation of the MIPyMES by the application of a model of integral attention of standardized consultancy, carried out by the consultants PYME-JICA and accredited by the Secretary of Economy. The process of consultancy that is offered in the facilities of the company lasts from 3 to 4 months, and is directed for MIPYMES, preferably with two years of operation. The Fondo PyME (Fund SME), along with the National Program of Consultancy PYME-JICA, helps with subsidies that go from 30 to 70 percent of the total cost of the service of managerial consultancy.

PyMEs exports

It is proven that many economies are based on their exports. Well organized and structured PyMEs can be a significant source of exports. For this reason, the Mexican government is giving special attention to PyMEs in this regard, allocating a big part of its economic resources to help small and medium size enterprises expand overseas. Supported PyMEs can mean increasing exports and a more open economy.[13]

The "Subsecretaria para la pequena y mediana empresa" (SPyME) was founded to design, foment and promote programs and other tools that have as objective the creation, consolidation and development of micro, small and medium size enterprises.

About 59% of Mexico's exports are controlled by 30% of the total enterprises in the country. Out of all the PyMEs existing only 9% of them export, while the remaining 83% do not have any type of presence overseas. International Commerce in Mexico is mainly based on big enterprises, this is why government is very interested on giving assistance and financial help to small businesses.

Out of all the exporting enterprises in Mexico only 64,000 are PyMEs. They are located mostly in the center part of the country, northeast and centerwest.

There are many ways PyMEs can be supported in Mexico. Fiscal support to Mexican exporters. VAT return or VAT compensation. Program of foment for the manufacturing industry maquiladora and export services (IMMEX). Also through the program of sectorial promotion. Program of Drawback ( through which Government offers VAT return to those Mexican small businesses that export to a country that has imposed tariffs on imports). There are Benefits to High level exporting enterprises (ALTEX). Benefits to International commerce enterprises (ECEX). Mechanisms of Indirect Exports such as VAT elimination or Application of 0% VAT on exports. Mixed Commission for the Promotion of exports (COMPEX). An annual incentive named National Exporting Price. Government aid such as information or opportunities to expand overseas, consultancy and training. Commercial opportunities such as analysis of the market. Selection and establishment of contact with client within the foreign market. Government may also support PyMEs though a Positioning process.

The most important programs supporting for exports are Financing, Consultancy, Training, Exporting, Technical Assistance and Information on exports.[14]

The services that the Programa Nacional de Franquicias (Exemption National Program) offers to PyMES are: commercialization, consultancy and financing. Likewise, they approach to the entrepreneurs, MIPyMES and owners of exemptions, to give them supports that offer the opportunity to start a new business taking advantage of the experience of an exemption, stimulate successful business to turn them into exemptions, develop new exemptions. Support the consolidation of the existing exemptions. Export models of Mexican exemptions. Strengthen the positioning of the brand of the existing exemptions and realize the re-engineering of existing models of exemptions.[15]

The PyMExporta Centers are federal, states and local organizations who have the objective of helping the PyMEs that have the special interest to start, increase, or to diversify their exports worldwide. This organizations join efforts with the Business Mexican Sector to achieve this aim.[16]

Some of the advantages and benefits that the centers bring to PyMEs are the training of the export process, a specialized consultancy for the development of export projects, the possibility of being able of promote the PyMEs in the international market, consultancy in customs Mexico requirements, information about markets and legal regulations for exports and the support in the tasks of logistics and management. The PyMExporta Centers work with their own register methodology, accompaniment and management of institutional supports according with what the businesses require. The supporting service is personal and specialized for each need of the enterprises.[16]

Services are given depending on the levels of the identification of the enterprises potential, in case the enterprises have the facilities to export its product a document will be signed for the development of each process stage of the export. The commerce strategy identifies the requirements of the product, it supports and advises the businessman since the beginning of the contract of international sale until the end of the sale.[16]

See also


  1. ^ Mexico Emprende (2009). "PyMEs" (in Spanish). Mexico City: Mexico Emprende. Retrieved October 18, 2010.
  2. ^ "semana nacional de PyMEs" [national week of small and medium size enterprises in Mexico] (in Spanish). Mexico: Government.
  3. ^ "semana nacional de PyMEs" [national week for small and medium size enterprises] (in Spanish). Retrieved November 2, 2010.
  4. ^ "que son las PyMEs?" (in Spanish). Mexican government. Retrieved 2010-10-18.
  5. ^ "Fondo de Apoyo para la Micro Pequeña y Mediana Empresa" [Support Fund for the Micro, Small and Medium Enterprises] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  6. ^ "Programas Emergentes" [Emerging Programs] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  7. ^ "Proyectos Productivos" [Productive Projects] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  8. ^ "Centros Mexico Emprende" [Mexico undertake project] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  9. ^ "Sistema Nacional de Garantias" [National System of Guaranties] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  10. ^ "Consultoria Empresarial" [Enterprises Consultancy] (in Spanish). Mexico City: Fondo PyME. Retrieved October 10, 2010.
  11. ^ "Contacto PyME" (in Spanish). Mexico City. Archived from the original on October 21, 2010. Retrieved October 14, 2010.
  12. ^ "catalogo Mexicano de normas" [catalog of Mexican rules] (in Spanish). Mexico. Retrieved October 15, 2010.
  13. ^ "semana nacional de PyMEs" [national week of support for small and medium size enterprises] (in Spanish). Mexico: Government. Retrieved November 2, 2010.
  14. ^ "secretaria de economia" [Secretary of Economy] (in Spanish). Mexico City. Archived from the original on 2010-10-17. Retrieved 2010-10-21.
  15. ^ "Mexico Emprende" [Mexico Undertakes] (PDF) (in Spanish). Mexico City: Contacto PyME. Retrieved October 10, 2010.
  16. ^ a b c "Programas de Centros PyMExporta" [Programs of PyMExporta Centers] (in Spanish). Mexico City: Fondo PyME. Archived from the original on October 8, 2010. Retrieved October 10, 2010.
Economy of Mexico

The economy of Mexico is the 15th largest in the world in nominal terms and the 11th largest by purchasing power parity, according to the International Monetary Fund.

Since the 1994 crisis, administrations have improved the country's macroeconomic fundamentals. Mexico was not significantly influenced by the 2002 South American crisis, and maintained positive, although low, rates of growth after a brief period of stagnation in 2001. However, Mexico was one of the Latin American nations most affected by the 2008 recession with its Gross Domestic Product contracting by more than 6% in that year.

The Mexican economy has had an unprecedented macroeconomic stability, which has reduced inflation and interest rates to record lows and has increased per capita income. In spite of this, enormous gaps remain between the urban and the rural population, the northern and southern states, and the rich and the poor. Some of the unresolved issues include the upgrade of infrastructure, the modernization of the tax system and labor laws, and the reduction of income inequality. Tax revenues, all together 19.6 percent of GDP in 2013, are the lowest among the 34 OECD countries.The economy contains rapidly developing modern industrial and service sectors, with increasing private ownership. Recent administrations have expanded competition in ports, railroads, telecommunications, electricity generation, natural gas distribution and airports, with the aim of upgrading infrastructure. As an export-oriented economy, more than 90% of Mexican trade is under free trade agreements (FTAs) with more than 40 countries, including the European Union, Japan, Israel, and much of Central and South America. The most influential FTA is the North American Free Trade Agreement (NAFTA), which came into effect in 1994, and was signed in 1992 by the governments of the United States, Canada and Mexico. In 2006, trade with Mexico's two northern partners accounted for almost 90% of its exports and 55% of its imports. Recently, the Congress of the Union approved important tax, pension and judicial reforms, and reform to the oil industry is currently being debated. Mexico had 15 companies in the Forbes Global 2000 list of the world's largest companies in 2016.Mexico's labor force is 52.8 million as of 2015. The OECD and WTO both rank Mexican workers as the hardest-working in the world in terms of the number of hours worked yearly, although profitability per man-hour remains low.

List of Mexican brands

This is a list of Mexican brands, which encompasses brand-name products and services produced by companies in Mexico.

List of companies of Mexico

Mexico is a federal republic in the southern half of North America. Mexico has the fifteenth largest nominal GDP and the eleventh largest by purchasing power parity. The Mexican economy is strongly linked to those of its North American Free Trade Agreement (NAFTA) partners, especially the United States. Mexico was the first Latin American member of the Organisation for Economic Co-operation and Development (OECD), joining in 1994. It is classified as an upper-middle income country by the World Bank and a newly industrialized country by several analysts. By 2050, Mexico could become the world's fifth or seventh largest economy. The country is considered both a regional power and middle power, and is often identified as an emerging global power. Mexico is a member of the United Nations, the World Trade Organization, the G8+5, the G20, the Uniting for Consensus and the Pacific Alliance.

For further information on the types of business entities in this country and their abbreviations, see "Business entities in México".

List of companies traded on the Bolsa Mexicana de Valores

List of companies traded on the Bolsa Mexicana de Valores (Mexican Stock Exchange) sorted by revenues and classified according to GICS.

Small and medium-sized enterprises

Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO).

SMEs outnumber large companies by a wide margin and also employ many more people. For example, Australian SMEs make up 97% of all Australian businesses, produce one third of total GDP, and employ 4.7 million people. In Chile, in the commercial year 2014, 98.5% of the firms were classified as SMEs. In Tunisia, the self-employed workers alone account for about 28% of the total non-farm employment and firms with fewer than 100 employees account for about 62% of total employment. In developing countries, smaller (micro) and informal firms, have a larger share than in developed countries. SMEs are also said to be responsible for driving innovation and competition in many economic sectors. Although they create more jobs, there is also a majority of job destruction/contraction.

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