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Tijuana is experiencing a technological startups revolution

Tijuana is experiencing a technological startups revolution

Posted by PanamericanWorld on August 03, 2017

The San Diego-Tijuana Metropolitan Area is home to five million residents, two million employees and is worth an estimated $230 billion, or approximately the GDP of Ireland. Trade between the two cities is worth $2.1m each day. But Tijuana has lagged behind Mexico’s other tech hubs of Jalisco and Mexico City.

When Ramon Toledo ditched a career in diplomacy for tech, in 2001, he knew success would be a tall order. He had spent years matchmaking between the public and private worlds at global events like Davos, and each year someone from the World Economic Forum’s technology council would call, asking which people from Mexico he’d like to invite.

“Every year I said no-one,” Toledo tells Red Herring. “Because there was no interest for the tech industry in Mexico. It was incredible: there were no Internet companies, no startups, no nothing.”

At least, Toledo thought, when he founded what would become tech firm Busca Corp, he would find cheap programmers. Toledo’s home town of Tijuana, home to 1.7m and just a short ride from the US border, had pedigree as a manufacturing hub. In the 1990s it was one of the world’s biggest makers of televisions, exporting millions across the busiest border on earth into neighboring San Diego and beyond.

It wasn’t so easy. Talent was thin on the ground and Tijuana’s tiny tech scene centered mostly around a close-knit band of hackers. Tijuana was thriving on a reputation not for vice, but tech: known for decades as ‘Vegas before Vegas was Vegas’, it was a place for gringoes to saunter south and spend–on drinking, drugs and prostitution.

As California’s dot com bubble was bursting, barely anyone in Baja California, Tijuana’s home state, knew what a startup was. Toledo hired instead from India, as he slowly built an empire of online media brands and sites that today includes gaming site LevelUp, tech mag Qore and Tomatazos, Latin America’s Rotten Tomatoes affiliate.

Today Toledo’s fortunes have changed. So have Tijuana’s. Busca Corp is one of the city’s leading lights, and sits among a clique of tech firms pushing the envelope for change in Mexico’s Sin City. Incubators and coworking spaces have popped up all over town. Graduates are pouring from local universities. Nightlife has gone from seedy to hip.

And, despite the White House’s anti-Mexican rhetoric, people are beginning to see that cross-border cooperation could yield vast riches.

Tijuana, historically, has had a tie relation with narco violence, which continues to rock Tijuana. Fighting–mostly between rival drug cartels–has resulted in the murders of thousands of people. The first quarter of this year brought half the total figure of 2016.

But as with the rest of the country, a middle class is fast-emerging. And it is bringing serious change to Tijuana. Zona Centro, the city’s historic downtown, has been transformed from vice and urban decay into a rejuvenated nightspot. Since 2013, when 70% of shops, restaurants and bars along the piebald Avenida Revolucion were shuttered, 12 projects have been undertaken to change the city’s image.

There are still many remnants of Tijuana’s former life as “Las Vegas South”. And not everybody has benefitted from the shift in fortunes: some of the lowest paid factory work pays just $6 a day. Tijuana is ringed by swathes of shanties and wrinkle-tin homes to reflect, in rust-covered clarity, the stark differences between the city’s rich and poor.

But Tijuana has glommed onto trends for craft ale, design-led hotels and eateries. It is slowly shaking off the bawdiness and troubles for something altogether more hip.

Tech is playing a big role in that revolution. 3DRobotics, a drone company, was the poster child for Tijuana tech until last year when it folded. But Busca Corp and content filter Saint Technology have begun convincing venture capitalists and government leaders that the scene is more than a fad. Thermo Fisher, a Massachusetts biotech firm, made headlines when it set up a software development center in Tijuana last year. Uber made the city its second Mexican location.

Rents in Tijuana are, according to Numbeo, over 500% cheaper than San Diego, which is just a 20 minute drive away (traffic-permitting). “I believe that ‘TJ’ has the potential to become the gateway to the US market or to Latin America,” says David Peguero of GrowthHax, a business coaching firm that works cross-border. “Because it is more affordable to live here and work in the US, so for example if you want to explore the US market, it is easier to do it from here.”

In my view, the biggest success and strides we have made in the last years has been in trying to connect and understand the San Diego and Tijuana startup scene,” says Regina Bernal, entrepreneurship manager at the University of San Diego. 

“Even though we are only miles away, one side did not know what the other side was doing and how to leverage resources,” she adds. “Now Tijuana has a seat at the table with San Diego Startup Week and has more visibility in the San Diego community by working with universities and incubators. We have seen tremendous changes in the cross-border startup ecosystem. Innovation does not stop at the border and the ideas that go back and forth from the border are incredible.”

The BIT Center, founded in 2011, has become the city’s principle software development hub. It plays host to 65 companies and many more lone traders via a chasmic coworking space. INDEX Open Studio and MIND Hub have also sprung up recently to cater to Tijuana’s increasing number of college-educated graduates.

Engineering degrees tripled in popularity between 2008 and 2012 across Mexico. The Tijuana Institute of Technology, CUT University of Tijuana and the Autonomous University of Baja California are among the most subscribed-to institutions in town.

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