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US labor shortage feeds Tijuana's nascent tech industry

There are more than 1 million unfilled tech jobs in the United States. Maritza Diaz thinks Tijuana can help fill that gap.

Diaz is the founder and CEO of ITJuana, a company that connects American businesses to Mexican tech workers. It launched in 2019 and has already filled roughly 700 tech jobs.

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“We are just scratching the surface,” Diaz said.

Tijuana has been an established manufacturing hub for decades. The appeal is simple: lower costs than in the United States, but close enough to avoid the logistical headaches of offshoring production in Asia.

Diaz believes that the tech industry can follow the same framework.

Traditionally, the tech sector has relied on countries such as India and China to fill labor shortages. Diaz believes that companies don’t have to go that far to find talent.

Tijuana has multiple schools that produce highly trained engineers, and their average salaries in Mexico are half of what they would be in the United States. Plus, companies avoid the challenges that come with hiring people half a world away, Diaz said.

San Diego is a border city, so tapping into a cross-border labor pool makes sense to Diaz.

“For us being in San Diego, in this beautiful area when Tijuana is only 20 or 30 minutes down the road, it doesn’t make any sense to go to India or go to China or the Philippines or anywhere but here,” she said.

Right now, most of the companies that ITJuana works with are San Diego-based biotechs. They need software developers for mobile health apps or even wearable devices that track people’s vitals.

Diaz meets with these companies on a regular basis. They all tell her that they’re struggling to hire new talent. And, in some cases, big tech companies are poaching their existing employees.

“Particularly here in California, where we compete with the big tech of Google, Facebook and AWS, it’s almost impossible for small-to-mid- companies to hire,” Diaz said. “Because every software engineer wants to go to big tech. And it’s not just the brand: It’s their salaries."

Tijuana has several universities and programs that train software developers to use the same coding languages students learn in the United States. But the programs don’t cost as much.

TIJUANA VIEW 08.jpg
Matthew Bowler
Downtown Tijuana's high rise residential buildings, March 2, 2022.

“I’ve heard stories of people taking years and years to pay off their student loans,” said Andre Patiño, who graduated from Tijuana’s Universidad Autónoma de Baja California in 2020. “Mexico is way more accessible. We don’t pay nearly as much as the U.S. does for university. But I do think they do a great job at teaching us.”

Rachelle Reyes was in the same program as Patiño. They both got jobs through ITJuana within a year of graduating.

They’re both aware that software developers in the U.S. get paid double what they make.

“But the cost of living there is much higher, so I guess it kind of balances that out,” Reyes said.

Had they graduated 10 years ago, Patiño and Reyes would have likely had to leave Tijuana to work in the tech industry — either to the United States or a more established Mexican tech hub such as Guadalajara.

But the recent growth of Tijuana’s own tech sector means that they can stay local.

“In the company that I’m in, there’s a lot of room to grow, so I don’t feel like I need to go to another place,” Reyes said.

US labor shortage feeds Tijuana's nascent tech industry

Patiño described Tijuana’s tech scene as small but with big potential.

“I think we can go way big,” he said. “I think there’s definitely a lot of room for improvement, but the potential is there. So I think, with the right focus and the right work, we can grow into the next big tech hub.”

Diaz doesn’t think that the tech labor shortage will go away any time soon, and said guest worker visas were not a viable option for many companies to hire workers. The H1-B visa, which is for skilled labor, is capped at 65,000 each year — not nearly enough to fill the labor shortage.

And, as Diaz pointed out, companies that get foreign workers through H1-B still must pay U.S. salaries.

“I don’t see any reason why companies need to apply for visas like that when they can actually drive 30 minutes and have hundreds of engineers in Tijuana,” she said.