The Role of MNCs within the Global Aerospace Industry in Mexico
Jorge Carrillo & Redi Gomis
The aerospace industry in Mexico has been growing significantly for several years. Based on the national statistics, the sector from 2005 to 2013 went from 65 to 297 companies; the exports grew from 1.7 to 4.5 US billions; the FDI increased from 0.34 to 1.5 US billions, and the employment increased from 14,000 to over 35,000. While the vast majority of companies are multinational and mainly manufacture several parts, expectations are so high that some clusters believe that Mexico is ready for manufacturing a complete aircraft. However, the capacity achieved in some regions, there is a significant gap in information about the role occupied by the companies in the global value chain aerospace, at a national level and in the existing clusters.
The main objective of the study is to determine the productive and organizational capabilities of the aerospace multinational corporations that have been developing in Mexico, especially within some specific regions of the country, resulting in particular ways on how they are becoming part of the global value chain.
It is known that all the economic activity in the aerospace industry is organized in different and segmented activities, grouped together and hierarchically organized in staggered “tiers”, coupled together within highly specialized regional systems called clusters, functioning as dynamized attractors for big corporations (Niosi & Zhegu, 2005; Martinez, 2011; Bamber & Gereffi, 2013). All these characteristics (place among the value chain, region and activity) serve as a guide to steer the search and analysis on this study.
The key questions that we have formulated related to MNCs in the aerospace industry are as follows:
1) What place does Mexico holds within the global value chain? That is, is Mexico positioned on a specific tier or is it spread in an indistinctively way among all tiers?
2) Is it a specialized level of capabilities or is it general? That is, how generic or specific are the capabilities that are shown? This will allows us to know how easy is to replicate, or not, the competences that are being generated. Are all of them within the same “tier”?
3) What kind of arrangements are being adopted by the companies within the clusters? Are all of the clusters integrated in a similar fashion or in different ways in regard to their capabilities? Is there any specificity for some of them?
All data that will be analyzed comes mainly from a national directory created by ProMexico, which is an agency from the federal government (http://www.promexico.gob.mx/), and other directories that allowed us to create a database. The advantages of using this information are: i) all of the companies officially registered are included; and ii) the economic activities that each company undertakes are classified as well. This information will let us identify the place that each company has within the global value chain and, parting from this, we will be able to examine the regional clusters and their geographical specifics, allowing us to compare them in terms of the structures that they are composed of and the levels of specialization that their activities have.
The main hypothesis of this project establishes that the level of productive capabilities for each company belonging to a regional cluster is closely related to the regional innovation system (Cooke, 2001; Cooke & Memedovic, 2003). The level of participation for each company within the global value chain will strongly depend on the level of engagement of the regional innovation system and its components. In fact, empirical studies made on these innovation systems in Latin America have shown the lack of relevance that these regional innovation systems have and the weaknesses of the institutional environments, as well as the strong presence of transnational companies as sources of local knowledge and the importance of incremental and process innovations (Dutrénit, 2009; Giuliani, Pietrobelli & Rabelloti, 2005; Cimoli, Primi & Rovira, 2011). Therefore, the strong presence of multinationals among the automotive and electronic sectors in Mexico, for the last four decades (Carrillo & Hualde, 2013; Brito, 2014), allow us to predict that the regional innovation systems have evolved from the regional clusters. This is why we would expect a positive relationship between the capabilities of the companies, their place within the value chain and the regional innovation system.
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