Industrial Transformation MEXICO
October 6 - 8, 2021, Poliforum León - Guanajuato

How Can We Do “Our Part” to Contribute to Economic Growth?

By Bernd Rohde, CEO of Hannover Fairs México

Since 2016 I have been CEO of Hannover Fairs México, the Mexican subsidiary of Deutsche Messe, a German state-run company specialized in the organization of tradeshows and exhibitions. The reasons we decided to begin operating in Mexico was because the country had a stable economy, solid exports and global value chains, a leading position in several industrial sectors, a high capacity for innovation, legal certainty and, more importantly, a growing market.

Today, almost four years later, many of the competitive advantages that were a constant in Mexico are coming under siege by the COVID-19 pandemic. Consequently, we would like to express our support for Concamin and other leaders, like Guanajuato State Governor Diego Sinhue Rodríquez Vallejo, who are pooling efforts to make economic growth the driver that enables us to “do our part” to see that Mexico emerges stronger than ever from this crisis, and that we can look forward to an inclusive, sustainable future.

On this note, I would like to take the opportunity to share some of the lessons history has taught us. After World War II, the German economy was ravaged by years of armed conflict and price controls, compounded by the loss of patents and its top-level scientists. However, things turned around in the 1950s due to economic growth, coupled with a transformation spearheaded by the private sector, namely small and mid-size companies or Mittelstand, which played a central role in this transformation.

This group of companies all had something in common: they had less than 500 employees, a family structure, were specialized in one specific niche and were open to global markets. These are traits Germany’s small and mid-size companies still have today and that many of Mexico’s no doubt share, but what sets Mitttelstand apart are things that are also present in Mexico’s business sector and that we need to focus on developing if we are to surmount this crisis: an emphasis on innovation, social responsibility and, more importantly, a long-term vision.

These concepts are not exclusive to Germany’s business community. In fact, they were cited by OECD Secretary-General Ángel Gurría in his recommendations of April 15 to governments on how to address the challenges posed by the COVID-19 pandemic.

One major key to success is innovation, especially innovation based on cooperation between the public and private sectors and a dual education model. In this regard, the Mexican government has invested in industrial research, like the Center for Optics Research, whose projects have applications in the footwear industry, and the Guanajuato State Training Institute, which has strong ties to the Bajío automotive sector and that is producing trained talent under a program developed in conjunction with industry.

As is to be expected, the countries that have made the greatest progress in terms of digital transformation are the ones that will tend to adapt best in the aftermath of the COVID-19 crisis. For instance, countries that have a solid network of software companies producing cooperation tools, artificial intelligence, cloud-computing and robotics will have excellent growth prospects and Mexico is one of them. For years, the country has shone in this industry on the strength of its talent. The time has come to capitalize on this opportunity and ensure the industry gets the support it needs, not just from the private sector, but from all three levels of government.

Social responsibility stems from the conviction that companies and society are interdependent, as opposed to two separate realms. In Germany, for example, companies are obliged to provide stability, both economic and social, and employers and trade unions are known as Soziale Partner or “social partners”. In Mexico, it is clear to me that the private sector has assumed its responsibility to society, with many companies making the very laudable decision to protect their employees by letting them work from home, even before the state of emergency was officially declared. However, I sense that the federal government needs to forge closer ties with the business sector so they can become true “social partners”, especially in light of the challenges that lie ahead.

Finally, a long-term vision is vital. In Mexico, the common threat posed by the pandemic has created rifts and, in some cases, ruptures. At this moment in time, I believe it is essential we weigh up the future consequences of every action together—not just companies, but families and governments too. Being aware of what is to come does not mean avoiding risks, but being prepared for every possible scenario and, more importantly, taking decisions “jointly”, because—and I quote Manuel Pérez Cárdenas, head of CONCAMIN’s Office of the Presidency—“only with a shared vision can we walk in the same direction for longer.” To this end, we need to coordinate our efforts like the blades of a windmill, each rotating in synchronicity to propel us into the future.

I firmly believe we will emerge from this crisis stronger, more innovative and more united than ever as a society. Mexico has always been an example of resilience and responsiveness. Just as we acted quickly and effectively during the AH1N1 epidemic and the earthquake of September 19, 2017, I am confident this occasion will be no different. It is time to join efforts and “do our part”.