BROWNSVILLE, RGV – Chris Wilson, deputy director of the Mexico Institute, says the Rio Grande Valley has a special challenge in securing private sector participation in major economic development of the region.
Wilson spoke at an advanced manufacturing summit hosted by Congressman Filemon Vela and held at UT-Rio Grande Valley’s Brownsville campus.
In an exclusive interview with the Rio Grande Guardian after the event, Wilson said he agreed with an observation made in a panel discussion by UTRGV’s Mark Kroll that the Valley was hampered by the fact that most of the Fortune 500 companies that have factories in Reynosa and Matamoros do not have their corporate headquarters in the region.
“There is a challenge in this region of getting private sector participation in business development and economic development to go beyond simply sitting at the table on some boards of economic development organizations,” Wilson told the Rio Grande Guardian.
“To do that, there is going to have to be enough value being created by the organizations that companies feel like it’s worth their money. A good example of that would be companies actually investing in workforce development, putting money in a local university, local community colleges, helping build out the curriculum for those programs.”
Wilson said he has seen a little bit of this in the Valley over the years but “not enough to meet the challenge that exists.” He said developing a skilled workforce is the No. 1 challenge if the Valley is to build an advanced manufacturing sector. “Getting the workers, having the right set of skills, ready to go, there is a lot of work that needs to be done there,” Wilson said.
Getting the various cities and economic development corporations in the region to work to together is an important first step, Wilson observed.
“The Brownsville area alone is relatively small compared to other border communities but if you take Brownsville together with McAllen, together with Harlingen, together with Reynosa and Matamoros, we are talking about an area with a population of two and a half million. That is second only to San Diego-Tijuana along the U.S.-Mexico border. We are talking about a real significant metro area that is punching below its weight because it is too fragmented right now,” Wilson said.
Kroll, dean of the Robert C. Vackar College of Business & Entrepreneurship at UTRGV, said that compared to large metro areas of a comparable size, the Valley, with 2.5 million people, was at a distinct disadvantage.
“Those kinds of population centers tend to have an easier time of developing those partnerships with the private sector,” Kroll said. “While we have a large population center here, we are not the headquarters of major multinational corporations. We don’t have the Halliburtons here. What we have are their cost centers. Those maquilas across the river are all cost centers.”
In his interview with the Rio Grande Guardian, Wilson said he agreed with Kroll’s analysis.
“It is one of the challenges of having a strong maquila presence and production for bigger companies that are based in other places. You don’t have the center of decision-making locally. A lot of times, where the corporate headquarters is, or where you see corporations making those types of investments in the local community, because they want to be a good corporate citizen. They should be doing that here but you need to engage the top level of leadership, the CEOs of these companies,” Wilson said.
“That takes some work for a community like Brownsville. It is not your local neighbor. It is going to the corporate headquarters and making a pitch there that there needs to be greater investment. It is not always easy for the local manager to drive that funding from the corporate headquarters. They need support from the local community here.”
Wilson said Valley leaders need to make a pitch to corporate CEOs that goes above and beyond asking them to be good corporation citizens.
“It is not just about doing the right thing. It is also about making investments that are going to help the company. And that is why workforce is such a key thing. We are all talking today about how important it is to have to a pipeline for workers ready to work at these companies, having the right skill sets. That is something communities can work together with the corporate offices, with the businesses that are here. So, the pitch is not, give me a workforce program because we are a poor community and we need it. The pitch is, let’s build a workforce program together so that your company is successful and so the whole community is successful,” Wilson said.
Asked if such a task was made harder because the region’s manufacturing workforce is largely based across the Rio Grande, Wilson said:
“That is one of the challenges. Right now, the manufacturing base is by and large located on the Mexican side. But that is what has to change. Brownsville, Harlingen, McAllen, need to not just be content with getting the retail dollars that flow across the river when there is economic growth across the river. They need to be actually trying to build up the local supplier base, build up the local manufacturing base, so there is real, new, value-add, new production happening here locally.”
Wilson acknowledged that it is a major challenge.
“But, that is the economic development challenge this region faces. Without that you are talking about a community that will continue to be based on facilitating trade and moving goods in and out, a pass-thru economy, or an economy based on retail. There has to be more to it than that.”
Working with Kroll, UTRGV, and Carlos Marin, president of Brownsville-based Ambiotec Group, the Mexico Institute has produced a new report titled “Backward Integration of Manufacturing Supply Chains in the Brownsville-Matamoros Region.” The report will be rolled out by Congressman Vela in the coming weeks.
“This is this new report that we have called, Backward Integration of Manufacturing Supply Chains in the Brownsville-Matamoros Region. It is something that the Wilson Center worked on, together with Carlos Marin’s group, Ambiotec and the University of Texas-Rio Grande Valley. We all worked on it together, to look at the opportunities in terms of specific products that are moving through the region today that could be produced locally and then to fill that out with a broader set of strategies and policy recommendations to create the environment in which that type of growth is possible,” Wilson said.