Foreign Investment Must Translate to Local Business Growth: Canacintra

Foreign Investment Must Translate to Local Business Growth: Canacintra

Despite positive foreign direct investment (FDI) figures being reported, this has not necessarily translated into economic growth for local businesses, warned Erika Vidrio, president of Canacintra Aguascalientes. The business leader pointed out a discrepancy between investment indicators and the reality faced by national industry, particularly micro, small, and medium-sized enterprises (SMEs), which continue to encounter challenges in growing, diversifying, and integrating into value chains.

“As we have shared, we had record foreign direct investment, but that does not translate into growth,” she stated.

Vidrio explained that part of this behavior may be related to profits originating from abroad that have not been repatriated, while, in contrast, the national economy maintains moderate growth.

The president of Canacintra Aguascalientes noted that, while new investments are announced, many have yet to materialize or do not generate sufficient value for companies established in the country.

“What is happening? That only investments that have not yet arrived are announced, but they only seek us out as labor,” she affirmed.

In this regard, she warned that Mexico cannot remain solely as a labor provider, as this model does not generate sufficient added value nor necessarily better salary conditions.

“If we continue to be that labor, then that labor does not generate value, it is only labor and in some cases it is not well paid,” she stated.

Vidrio maintained that the challenge is to strengthen national companies, understood as any entity operating in Mexico, regardless of the origin of its capital. However, she emphasized that the priority should be on SMEs, as they face the greatest difficulties in incorporating into growth and diversification processes.

The business leader indicated that asking companies to diversify their activities may seem simple, but in practice, it requires investment, technical capabilities, and conditions that many companies currently lack.

“It is very easy to say diversify, but in practice it is not so simple, it is not so simple when you have dedicated yourself to a single sector to start diversifying, because everything requires investment,” she pointed out.

She also noted that some companies are facing a complex economic period, and there are even businesses that are closing. Therefore, she considered it urgent to promote regional strategies that will prevent further damage to the productive sector.

Vidrio added that informality indices reflect some of the pressure businesses face, as many people opt to operate informally rather than closing their activities completely, due to the families that depend on them.

Given this scenario, Canacintra proposes that economic strengthening must go beyond investment announcements and focus on generating local value, integrating SMEs, and building real conditions for companies to grow.

The president of Canacintra Aguascalientes insisted that to achieve this, coordination between government, the private sector, and academia will be indispensable, as well as serious diagnostics that allow for the identification of real needs and the design of effective industrial public policies.

first appeared on Líder Empresarial.