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The North American Block: A Nearshore Software Development Advantage

An undervalued strategy for international tech companies still operating exclusively from the US

Canada, the US, and Mexico as part of North America


How is the North American Block: the US, Canada, and Mexico region, strategically relevant for nearshore software development companies? 

A couple of decades ago, businesses started to look for talent outside the US. It all began with tech companies searching for the best engineers, designers, and managers, no matter their location or even their background. Nearshore software development is a considerable investment that should be reflected in the company’s expansion. The traditional procedure relies on the hiring process and in-person interviews, retention strategies, establishing a real work-life balance when employees have joined, and so on.

25 years ago, Microsoft started hiring engineers from the best university and engineering program back in Mexico, at the time: Tecnológico de Monterrey. This plan was expanded into other universities. It became a virtuous circle, converting current employees into HR advocates with a special budget assigned to attract more talent from their Alma Matter, assuming more engineers with the same quality as themselves might be found. 

Around the same time, in 1994 the NAFTA 1.0 agreement was signed, and the TN visa became a reality. This is a visa that allows Mexican, American, and Canadian citizens to settle in any of these 3 regions by justifying their job; creating a fast path for people, and a versatile process for companies in expansion.

In Canada, the industry has seen companies leveraging the immediate proximity to the Northwest and the mid-Atlantic regions in the US. Huge companies such as Amazon, Facebook, and others, have started establishing R&D+AI outposts, hiring people from Universities in Toronto, Waterloo, BC, bringing foreigners using the advantageous immigration process Canada has while providing a great quality of life to engineers in those places

Before COVID-19 hit, there was an unfair advantage for nearshore software development companies in this whole block: proximity. The aforementioned becomes key to generate cohesiveness, collaboration, and other determinants enabling businesses to be more efficient in many ways. Traveling to visit engineers in Mexico City, returning to San Francisco for a strategic session, and then having a retreat in Cabo with a couple of crew members from the AI center at Toronto and Montreal to talk about the next move. All that is possible within a 2–4 hours flight, in the same time zone, and mutual respect because of the countries' affinities and long history. Nevertheless, ties between cross-border countries have been undervalued, mainly between Canada and the US with Mexico, and generally speaking, Latin America.


Nearshore software development in a COVID-19 world

Today, in a COVID-19 world and with the new normality being settled, proximity is still highly relevant. Despite privileged tech companies that can work remotely, the opportunity to generate a work-life balance based on working hours is important. Considering some team members might have family, children, or responsibilities —the flexibility to unplug at some point and be focused on the family will be an enjoyment. 

Ultimately, traveling is going to be a thing again. The IACA states that until 2024, flights will climb back to the pre-pandemic numbers. Progressively, having in-person interactions (with precautions) will add value to all outcomes for any company and strategic relationship. Think about a release planning session, talking to potential customers, or just having time to hang out with the rest of the team; it will be more amenable and less annoying than traveling 30+ hours with all implicit risks and costs considered in that trip.

Most companies in the US and Canada don’t look at Latin America as a cheap labor spot, but as an unexplored region where great engineers are preparing for the next big venture and challenge. The main barrier is the language, but if companies struggle with talent, why not hire someone as a proxy and learn Spanish rather than the other way around? Still, English is the business language by default, even in Asia, so there’s a gap to be covered. Where there’s a will, there’s a way. 



A killer formula: Business Development and leadership in the US; strategic roles in the US and CA, and operations and product talent in MX and CA. The nearshore software development approach optimizes the positioning of the business as a world-class entity. This opportunity is among the whole block: communication channels, proxies, reducing frictions between hubs and regions, leveraging economies of scale, and bringing more exciting opportunities with state-of-the-art projects for all people across the region — basically fostering a single unit where everyone is allowed to grow and impact.

If you want more information on how to adapt a modern Digital Product Design Process in your team, or if you are interested in running a Design Sprint with my team, write us a line at weare@icalialabs.com

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