Professional Labor & Education:

Effective Human Capital in México

Effective Human Capital Scope: Whether included in public policy reports, posted on bulletin boards, or

communicated through other media; everyone shares a consensus: People are the most important resource and number one competitive weapon. Successful countries know that:

historical competitive advantage is no longer enough, and a future edge will come from making better use of people,

The only way that a country can sustain performance excellence is with people,

a countries' labor culture is how to educate, motivate, and empower its people.

Human capital is: A stock of skills A Fundamental asset of productivity It is related to wage growth It is related to the gross national product growth And the professional labor is the human capital at its best.

Importance of Human Capital to Economic Growth

In today’s workplace, managerial skills and technological innovation, imposes demands in higher education.

An educated population creates wellbeing for a whole nation and impacts a society in several segments: increasing tax revenues, pushing the economic growth and accelerates political involvement and democracy.

The availability of professional labor determines the rate of economic growth and its integration to the world markets.

Thus, the pattern of human capital should be taken an integral part of any economic development policy.

Mexican Educational Policies to increase the availability of

professional laborFirst stage: 9-year compulsory education (6-16 years old)• Mandatory elementary education• Mandatory junior and high education

Second Stage, open more public schools for: Senior high school education in rural communities (15-19 years old)

Third Stage, increase the investment in technical higher education

Professional Education (18-24 years old)• Universities with emphasis in engineering and math learning • More Technical colleges (computing skills and technical skills)• Teacher-training institutes (mid range technical professionals)

The results: in Education policies

Despite the public policies of compulsory education since 1992, Mexico has not been yet able to cope with the educational demand.

First stage has not been accomplish fully, especially in rural areas (the enrollment rate in this segment in the whole country is 85% in 2005).

As a result of lack of accomplishment in those public educational policies: the supply and demand of

professional labor is ineffective. This can be considered as an ineffective Human Capital

in Mexico

This is the ineffective pattern created by those policies and a reason as to why the highly educated graduates in Mexico do not fit to the model of distribution of the supply and demand of professional labor, due to these factors:

a) More foreign direct investment has been channel to create lower labor skill work

b) More public spending is in infrastructure (highways, bridges, hospitals, dams, etc)

c) More opportunities to work are offered by informal or underground sector.

d) More investment in higher education has been channeled to social sciences (law, sociology, philosophy, social work, etc) and medicine

Main industries in Mexico: characteristics and distribution %

Division of activity RatioFood, Beverages and Tabacco 35.6%Textile and clothing 14.3%Wood,wood product 12.9%Paper,paper product and printing 6.8%Chemicals,oil derivatives and coal 3.2%Non-metallic mineral products 8.1%Basic Metallic Industries 0.1%Metallic Products,machinery and equipment 17.3%Other manufacturing industries 1.8%

Industry in Mexico

90 % of the companies in Mexico are micro, 8 % are considered small, 1 % medium, and only 1 % large industries.

The industrial plant in Mexico 36 % is in food, textiles, auto parts, and cement. Other machinery and equipment come second with 17 % ; all the other engineering-relevant industries (science an technology based) totals less than 14%.

Mexican economy is highly service oriented. Formal and informal.

Labor distribution

71.20%

18.60%10.20%

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%

Ratio

High School Senior High University

Education

Labor distribution

Work distribution

71% of the employees have no more than 2 years of high school education, while 19% of them upper secondary education and the remaining 10 % received university level education.

But, a sharp shortage yet under-utilization of higher educated labor force in Mexico

Science & Engineering Industries

The infant hi-tech industries in Mexico will create more jobs and diversify the economy.

To invest in the future, Mexican government should sensibly target investments in science and engineering education.

A strong scientific, engineering and technology community has postive macro-economic effects on the long-term growth of Mexican economy.

There also exist other benefits of innovation, manufacturing leadership, invention, etc.

The Status Quo of R&D in Mexico

In Mexico, our university graduates in

science and technology is just 2% in 2001 and has been growing, but we are not creating the jobs to employ them.

To push the sector we need to employ our professionals to the fullest

The Prospects

What we see in Mexico today are:

We produce more engineers that we can employ.

Even though Mexico is currently generating more jobs in: semiconductors, and harnessing and basic electronics.

Specially in maquiladora (twin plants) is not enough