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The tech talent gap is here to stay: 64% of companies lament underskilled candidates, and 56% express concerns about overall talent shortage, says MIT Technology Review Insights. No wonder 87% of US businesses are opting for nearshore LATAM locations. This shift is fueling the rise of software development in Guadalajara. Could this be a sign to opt for it too?
I’m Dmytro Ovcharenko, CEO at Alcor, where we simplify US tech companies’ expansion into Latin America with our tech R&D Accelerator. We scale teams from 0 to 100 Silicon Valley-caliber engineers in a year with full Employer of Record and operational support. Most importantly, it is all for 40% less than traditional outsourcing. But more on that later.
In this article, you’ll learn about the vibrant Guadalajara: why it’s considered Silicon Valley in Mexico, its history, tech trends, local business incentives, and whether or not software developers staffing in Mexico is worth the effort. For this and much more, keep reading!
5 Reasons Guadalajara is the Silicon Valley of Mexico
Tech-Nurturing Ecosystem
The main reason for naming Guadalajara the Silicon Valley of Mexico is its eclectic and structured tech ecosystem. It comprises over 1,000 tech companies that provide 150,000 jobs and well-defined industry clusters of software development, electronics manufacturing and design, and others. What’s more, Guadalajara is a tech hub for the AI industry in Mexico, with the first GenAI lab launched by Wizeline. Finally, the city boasts the highest number of thriving tech communities in the country and a variety of meetups: just check out Guadalajara Java Users Group, JavaScript Guadalajara, or Startup Guadalajara.
Supportive Government
The Mexican government directly participates in fostering local and regional startup growth through such initiatives as Startup Mexico and the Fintech Law. The former offers programs for startups, small and medium businesses, and corporations with the final goal of bringing innovation to new heights. The latter aims to provide more clarity in financial legal matters by regulating FTIs — electronic financial technology institutions, which comprise crowdfunding companies and e-money organizations.
Bright-Minded Tech Ocean
The state of Jalisco makes up 40% of the Mexican IT industry, adding more than 10,000 tech graduates to the country’s overall 700,000 talent pool every year. Moreover, the region is home to top educational institutions — ITESO, Tec de Monterrey, Universidad de Guadalajara, and Universidad Autónoma de Guadalajara. As for their reputability, Tec de Monterrey University, with its campus in the state of Jalisco, is ranked #1 in Mexico and #4 in LatAm, according to the Times Higher Education Ranking 2023. To boot, Adalberto Florez, founder & CEO of the soonicorn Fintech platform Kueski, is also convinced it’s a city with the best software engineering talent. Thus, nearshoring software development in Guadalajara is set to grow even further.
Competitive Cost Edge
A software engineer in Guadalajara earns about $48K a year, while their US counterparts make around $160K. According to more Glassdoor estimates, programmers in European countries receive an average salary of $67K, with Norway and Germany paying the highest wages — $72K and $75K, respectively. As you can see, when saving on coders’ salaries, nearshoring to Guadalajara stands out as a top choice.
Furthermore, Mexico has lower corporate income tax rates in comparison to the US, given the fact that it imposes no additional state-level rates. For the US and Canada, there is no double taxation when cooperating with Mexico. In contrast to the Mexican social security tax rate of 44.9% to 60%, Western European taxation is less favorable, at times reaching up to 65-68%, based on Trading Economics information as of 2022.
One more significant difference for tech companies in the country is the role of the government. It promotes tax incentives for research and development, such as a 30% tax credit for R&D expenses, according to the Mexican Income Tax Law. Lastly, Mexico made it to Kearney’s Global Services Location Index top 10 for its financially attractive and business-friendly environment.
Setting up an R&D office in a foreign location can help you cut costs while collaborating with top-notch software developers. One of Alcor’s clients, a US online fraud detection company, Sift, reaped all the benefits of this model. Our 10 IT researchers, 3 tech recruiters, and an account manager helped the client to hire 30 developers in 1 year, while the legal team handled legal and compliance matters. Ultimately, Sift got a fully furnished and transparent software R&D branch in a foreign location.
Seamless Communication
One of the chief advantages of the Mexican Silicon Valley is its location. Being geographically close to Dallas, Los Angeles, and San Francisco, the city of Jalisco is a gem for assembling a remote team. It’s 2 hours behind New York and 1 hour ahead of Los Angeles, so you’ll keep in touch with your team throughout the whole working day. Another perk of such geographical proximity is work ethics and cultural exchange with the US. Work practices are much the same, with a stronger emphasis on networking and relationship-building. Finally, while English proficiency is not the highest in Latin America, its proximity to the US contributes to the nation becoming bilingual.
Discover other benefits of offshore software development in Mexico!
Brief history of Guadalajara
The Silicon Valley of Mexico has emerged relatively recently. The 1960s laid the economic foundations for the region, as giants IBM, Hewlett-Packard, Kodak, Siemens, and Motorola established manufacturing operations there. By the 1980s, Guadalajara had developed a cluster of tech companies, which skyrocketed its tech manufacturing sphere. More programmers flocked to the area, while corporations partnered with universities to expand their tech-related curricula.
During the 2000s, however, the rise of the city was stalled by the Asian market. Despite losing numerous tech jobs, the city persevered in perfecting its education and attracting funding. From 1999 to 2023, for example, Jalisco accumulated $893B in foreign direct investment. Famous corporations like IBM, HP, and Intel, with their R&D hubs, have contributed to its further growth.
The economy of the country’s tech center keeps growing, as city officials are keen on attracting entrepreneurs and investors. One more initiative led by The Federal Government is Guadalajara Creative City, aimed at becoming the digital media hub of the region. As a result, Jalisco is expected to become the Latin American leader in audiovisual content, technological development, and innovation by 2030, according to the initiative’s official website.
Guadalajara as a Tech Hub
Accounting for more than one-third of the IT sector in the country, the city is set for success as a tech hub. For starters, Technological Park Guadalajara has a well-educated population with an average age of 25 years with access to 16 technology institutes and 12 universities.
Following the Trump administration’s moves to restrict bringing foreign talent to the US, Artistóteles Sandoval, governor of Jalisco state, seized the opportunity to personally promote the area to high-tech companies in California. This strategy only reinforced Guadalajara’s growth and advanced nearshore outsourcing to Mexico.
Now, it’s the 5th most digitized city in LATAM. According to the Startup Global Ecosystem Report, as a top city in Mexico, Guadalajara is outpaced only by Monterrey and the capital, Mexico City. It houses over 121 startups, among which are such success stories as Kueski, Placeit, digit, Pulpos, and Indiefy.
Does Big Tech Nearshore Software Development to Guadalajara?
Absolutely! Microsoft, Google, Amazon, Dell, and Cisco have successfully embraced IT nearshoring in Guadalajara, and the list doesn’t end here. Let’s have a look at some of the most prominent cases:
- HP
One of the largest producers of computer hardware, HP, has been present in Guadalajara for four decades. The company opened its manufacturing campus to focus on lower-tech electronics production. Later, HP transformed it into a cutting-edge tech development center. Today, about 2000 customer support, finance, programming, and hardware engineering professionals drive the company’s global innovation strategy. What’s more, HP’s development center actively collaborates with ITESO University, welcoming STEM graduates and fostering fresh developers to add to Mexico’s growing talent pool.
- IBM
Another oldie in the Guadalajara market is IBM. This technology giant set up its R&D center called IBM Technology Campus over 40 years ago. Specializing in AI, cloud computing, data analytics, and blockchain technologies, the center also focuses on server systems design, new tech testing, and customer service. About a decade ago, IBM expanded the facility with the Smarter Data Center as a part of its “Smarter Cities” initiative. The tech enterprise invested $30 million to boost local tech infrastructure, helping take Guadalajara’s innovation to the next level.
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- Intel
The innovation giant, which has over 50 years of experience in the tech field, expanded to Guadalajara in 2000 by acquiring a local company and establishing the Guadalajara Design Center (GDC). What began as a site for testing and validating hardware has since evolved into one of Intel’s most advanced R&D hubs. Today, it houses modern laboratories where about 1000 engineers and STEM interns design and test Intel’s state-of-the-art products. Some of the groundbreaking projects devised here were Intel’s i5 Core processor and the Xeon Phi.
- Oracle
Computer technology giant, Oracle, built its Guadalajara R&D center as part of a long-term expansion into Latin America. Situated in the vibrant Jalisco region, the center specializes in cloud computing, database development, and enterprise applications, playing a key role in advancing Oracle’s SaaS and PaaS strategies. In addition to its R&D efforts, Oracle is actively investing in promoting its Oracle Academy and Oracle University programs to nurture even more tech-savvy experts in Mexico.
Software Development Trends in Guadalajara for 2025 and Beyond
Fintech
The rise of fintech in Mexico is showing no signs of slowing down. With increasing digital penetration, internet usage, and over 90 million Mexicans owning smartphones, the need for accessible financial services is on the rise. Unsurprisingly, the fintech market is forecasted to broaden by a CAGR of 14.20% during 2024-2032, already making up 20% of venture funding in Mexico.
In this context, the financial tech development of Guadalajara plays a pivotal role. As the second-largest fintech hub in Mexico, the city is home to over 30 startups, including notable ones such as Kueski, Voxfeed, Billpocket, Volabit, and YoTePresto.
Artificial Intelligence
Mexico has been a regional leader in AI expansion since 2018, experiencing a jaw-dropping 965% growth. Its AI market has surpassed $2.7 billion and is projected to hit a whopping $12.5 billion by 2030. Thanks to governmental initiatives like fAIr LAC JALISCO, the country is now home to 362 AI startups that predominantly focus on Business Intelligence & Analytics, Machine Learning Robotics, and Computer Vision development.
Of these, 10% are in Jalisco, including standout companies like Wizeline, C3.ai, Zenput, Instacrops México, and Narval Bio. Along with local startups and around 40 AI & ML software development companies in Guadalajara, Mexico’s AI landscape will see a further boost by the Diligent R&D office and Foxconn chips manufacturing center.
Cloud Services
Many businesses in Guadalajara are transitioning to cloud-based solutions, aligning with the global trend—96% of companies use one public cloud, and about 45% have moved at least half of their apps to the public cloud. No wonder the public cloud market in Mexico is expected to reach a volume of $19 billion by 2029.
Cloud services already contribute to the country’s digital economy, which accounts for around 25% of its overall GDP. A large portion of this growth comes from Guadalajara, where cloud tech thrives. This tech powerhouse is home to several major data centers, including HostDime, Mega Data Center, Triara, and IPXON, with American tech giant Google set to open its Cloud Delivery Center.
Tech Companies in Guadalajara
The region appeals to well-established companies in the automotive, electronic, tech, and health industries. Currently, the following renowned corporations operate in Guadalajara Technology Park in Mexico:
- IT & Software: Amazon, Cognizant, HCL, Luxoft, Wizeline, IBM, Oracle, Wipro, Gameloft
- Automotive: Toshiba, Honda
- Electronics: Bosch, Foxconn, Sanmina, NXP Semiconductors, Freescale, HP, Dell, Intel, Jabil, Cisco, Microsoft
- Health: AstraZeneca
When it comes to software development services in Guadalajara, there are about 100 companies that mostly specialize in mobile app development, web development, IT managed services, AI development, and e-commerce services.
In addition, the startup-rich city environment spurs the further growth of accelerators in the area. The most widely known are Agave Lab, Guadalajara Investor Network, Redwood Ventures, and Wizeline.
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Developers Salaries in Guadalajara
Let’s take a look at middle-level programmers’ salaries in Guadalajara in contrast to the US salaries for similar positions:
| Position | Gross Annual Salary, USD | |
| Guadalajara | USA | |
| Front End Developer | 43,000 | 119,000 |
| Back End Developer | 39,500 | 105,000 |
| Mobile App Developer | 48,500 | 101,000 |
| Full-Stack Developer | 39,000 | 101,000 |
| Data Engineer | 32,000 | 114,000 |
| Web Developer | 40,000 | 98,000 |
Source: Glassdoor
Thus, the highest software developer salary in Mexico, that of a Mobile Developer, is 58% lower than the considerable Front End Developer remuneration in the US. Even if we compare it to the lowest Web Developer salary, in Mexico, you’ll pay up to 45% less. In conclusion, hiring software developers in Guadalajara is a smart way to significantly reduce labor costs while still gaining access to top-tier talent.
Hire Remote Developers in Guadalajara with Alcor
Regarding nearshoring, most tech companies choose IT outsourcing or traditional staffing models because they seem easier —ready-made teams, no legal hurdles, and a lower price tag. But they come with many pitfalls, like hefty markups, buy-out fees, IP risks, and even a low-quality end product, to name just a few.
That’s why my team and I devised a turnkey R&D center to eliminate the risks of IT outsourcing while making your expansion stress-free. With our solution, you’ll get tech recruitment, EOR, and operational support—everything to build and scale dedicated software teams in Mexico, Argentina, Colombia, or Chile.
What you get by setting up your offshore software development center:
- A Silicon Valley-caliber team at 40% less than outsourcing
- A top-10% tier Mexican software engineers for hire
- A team that’s yours from day 1—zero buy-out costs
- Full control with direct team management, no middleman
- Transparent pricing—no hidden fees, no surprises
- No legal entity required—we handle all the legal details
- 24/7 support from dedicated account managers
We’ve already built software R&D centers for People.ai, BigCommerce, Dotmatics, and ThredUP, who were wowed by our services! With a 96% customer satisfaction rate, we’re confident you’ll love working with us too.
So, ready to boost your software product and increase revenues with your own R&D team in Mexico? Let’s make it happen—reach out today!