Nearshoring In Latin America Faces Challenge of Technical Talent Deficit

The lack of specialized talent affects all of the region and is becoming more evident with the energy transition and electric vehicle boom

Fiffy-percent of technicians and engineers in the US are approaching retirement age.
May 11, 2023 | 01:17 PM

Read this story in


Mexico City — Latin America is the strategic destination for the landing of companies seeking to take advantage of nearshoring opportunities due to the region’s proximity to the US and Canadian markets, but the relocation of companies has evidenced a deficit of technical personnel that will be required to kick-start the electric-vehicle boom and the energy transition in the region.

The shortage of specialized talent affects all of Latin America, and is becoming more visible with the region’s foray into electric vehicles and the growing lithium industry, so the migration of talent and skills between industries will increase.

Mexico’s Exports Skyrocket in Sign Nearshoring Is Thriving

The United States has more than 900,000 technical staff vacancies, while in Latin America the technical talent deficit amounts to 1.3 million people, according to projections by the Association for Manufacturing Technology (AMT).

Carlos Mortera, AMT’s director for Latin America, said that there is a deficit of technical talent in the Americas, including in Mexico, although in the case of Mexico, the country’s companies are taking important steps with academia to develop the talent required by the industry.


Luis Lizcano, executive president of the Mexican Federation of the Aerospace Industry, said that it is bad news that there is a deficit of talent, but that the good news is the country can forge talent because it has the advantage of a demographic bonus, something that the United States and Europe do not have.

Fifty-percent of technicians and engineers in the US are about to retire. There are currently 12 million manufacturing jobs in the US and 53% of the people employed in such roles are over the age of 55 with a retirement age of 65, according to data compiled by Industry Sourcing LLC.

In the United States, the number of technicians and engineers who will retire is five times larger than the entire automotive industry in Mexico, the report states.


In this sense, Mexico and Latin America have an opportunity due to their demographic bonus, and there is potential for talent development in direct supply in processes such as carbon composites, electrical-electronic, metal structure processes, forging, casting, plastic injection, 3D printing, CNC machining, and textiles and leather.

Export potential vs. the lack of talent

The Inter-American Development Bank (IDB) projects that the potential gain for Latin America and the Caribbean from nearshoring opportunities in the short and medium term could represent an increase of up to $78 billion in new exports of goods and services, with significant opportunities for the region in the automotive, textile, pharmaceutical and renewable energy industries, among others.

Mexico and Brazil are seen as having the biggest opportunities, although all countries would benefit, according to advance data from a study to be published soon.

Monica Flores, president of ManpowerGroup for Latin America, said that the talent shortage affects the entire Latin American region, something that has become more visible with nearshoring.


She indicated that the relocation of companies from Asia to Latin America can increase exports of countries in the region, in fact, Central American countries such as Honduras, El Salvador and Nicaragua are already registering increases in this indicator.

Mexico’s Nearshoring Boom Spurs Job Creation In Multiple States

Likewise, Argentina, Brazil, Colombia, Costa Rica, Guatemala, Panama and Peru are countries that are more conducive to the mobility of talent and the migration of labor sources, while Mexico is the country that has benefited the most from the relocation of companies in the region.

Flores pointed out that, with nearshoring there will be a regional alignment in terms of the availability of adequate talent to meet the demand, especially if we consider that in the Latin America region the talent shortage is 71% in 2023, which means that seven out of 10 employers have difficulties in finding the talent they need.


Mexico, Brazil and Argentina are the countries whose exports could grow the most due to the impact of nearshoring, according to IDB data; however, Brazil and Argentina are the countries in the region where employers have the hardest time filling vacancies with the right talent, according to ManpowerGroup data.

“Nearshoring is a great opportunity, but also a great challenge, we have to talk about planning, migration of skills between sectors, migration of people from some regions and take advantage of what technology allows us to do. We used to talk about taking talent to where the work is, today we talk about taking the work to where the talent is.”

Mónica Flores, presidenta de ManpowerGroup para América Latina

Nearshoring and lithium

In July 2022, the US State Department organized a ministerial forum on supply chains, to which Mexico and Brazil were invited to work on building more resilient value chains.

According to Economic Commission for Latin America and the Caribbean’s (ECLAC) Raquel Artecona, Mexico and Brazil’s participation in the forum is part of the opportunities that Latin America has in nearshoring, especially in areas such as semiconductor manufacturing and advanced packaging supply chains; high-quality battery supply chains, including batteries for electric vehicles; and critical minerals supply chains.

Argentina, Bolivia and Chile make up the so-called ‘lithium triangle’ in Latin America; the countries are working on projects that contribute to the energy transition and electromobility, as lithium is considered a critical mineral for achieving the goals of the Global Climate Action and Sustainable Development (SDG) agendas to reach zero emissions by 2050.

In particular, Argentina is already in the process of developing the lithium value chain and training human resources and qualified suppliers, in order to promote technological development and strengthen the industry.

Head of New Lithium Giant Wants to Build a LatAm-Based Battery Supply Chain