Innovation, Collaboration, and The Challenge of our Generation
Why Tesla in Mexico is only the initial sign of what is to come
The last great challenge of humanity, engraved in our collective narrative, is the arrival of a man on the moon fifty years ago. After Kennedy sent out the challenge, the brightest minds came together in a common project coordinated by NASA, and in a strikingly short time changed history and global geopolitics.
Today the world faces an even greater challenge: to transition to net-zero emissions by 2050. This involves a titanic effort, with a fundamental difference: it will not be achieved under the coordination of a single agency but under the sum of large and small collective efforts around the world, all oriented towards the same end, from different industries, fields of knowledge, and leaderships. Such an achievement has no precedents and may seem utopian, but the potential for a democratized coordination of society towards a common goal is inspiring, hopeful, humanizing, and evidence that there is no greater force than human ingenuity and will. We have no alternative.
Tesla’s recent announcement of its new plant in Nuevo Leon, Mexico, brought back to the arena the debate on Mexico’s potential to attract investment and to experience a new bonanza thanks to near-shoring, despite or thanks to its current public policies. What is undoubtedly evident is the movement of resources aimed at transforming the global economy towards clean energy, electrification, and the transition to zero CO2 emissions. Are Mexico and Latin America ready for this great revolution, and their share of responsibility and contribution towards the end goal?
Rumbo Ventures has the absolute conviction that not only are we prepared, but that Latin America has a real, exceptional, and unique opportunity for a profound transformation of its economies in this new era, accelerating its transition to net zero; by attracting investments and implementing new technologies, leveraging local talent, adopting internationally proven business models and advances in science that allow us to improve our standards of living while saving our planet.
Although this vision has been expressed by different political stakeholders, businesspeople, and investors, it requires much more than speeches to be achieved. We need an inspiringly communicated vision and a detailed plan, commitments at all levels, execution capabilities, and a deep and consensual understanding of the implications for the life of the region of taking advantage of this uncommon juncture.
Drawing our attention on Mexico for a moment: the country is at risk today of losing the greatest geopolitical opportunity in decades, a second wave of transformation in its industry based on the relocation of supply chains closer to final consumption in the United States. The Tesla case is only the most visible of a series of announcements focused on near-shoring that could allow Mexico to reactivate its economy, generating high-quality jobs, economic spillover, and new-generation technology. The great bottleneck is the country’s power capacity and, specifically, renewable energy sources. Without vast, reliable, and clean electricity, Mexico loses all competitiveness.
The same will happen with the electrification of transportation; we are excited about the presence of Tesla but we cannot visualize the effort required to replace a fleet as large as the one in Mexico in the next ten years; the investments in batteries, auto parts, assembly plants, charging stations and infrastructure, in general, can be massive. What are we waiting for?
Other sectors of the economy such as food, real estate, and manufacturing, huge components of the Gross Domestic Product, must undergo an equally massive transformation. Technologies to generate environmentally responsible food, ecologically sustainable construction, and durable products such as steel, cement, and alternatives to plastics, with a minimal environmental footprint, are being developed and need to be adopted, improved, and adapted to the Latin American reality. Those who will make these adoptions will be governments, large corporations, but also entrepreneurs, startups, and every contributor to a complex, deep, and diversified economy.
While some people in Mexico still think that we are an oil economy (think the Dos Bocas refinery), the reality is that manufacturing, construction, and tourism are the engines that can catapult Mexico’s conversion into a world leader in sustainability. In this endeavor of independent efforts, Rumbo Ventures is positioned as a catalyst of financial resources where innovation, entrepreneurship, and private-sector talent converge. Starting with early-stage VC, Rumbo Ventures finances the seeds of new business models that should become the great companies of tomorrow, creators of jobs, social development, and replicable examples worldwide.
The awareness of a sustainable planet and solving the climate crisis is at the center of the priorities of the new generations. Overcoming frivolous or window-dressing models of entrepreneurship, highly prepared young people are finding technical solutions for energy efficiency, hydrogen and green ammonia, new generation materials, carbon capture, etc., and a future where Mexico’s environmental diversity becomes a competitive advantage that allows for responsible, sustainable and dignified economic growth.
Imagining this role for Mexico in the world, this role for all of Latin America is possible. Faced with the challenge of decentralized and global leadership, where technologies are easily transferred and capital has a global vision, it will be our talent and its ambition for a better world that will bring to fruition the great challenge we all face.
Among all the actions necessary for this great mission, Rumbo Ventures ensures the channeling of financial resources to the most impactful ventures, projects, and teams, from the idea to the great regional infrastructure. This is the direction Latin America needs. There is no time for more opportunity cost, more missed chances, more ideological diatribes, or dreams of a past that will not return. Welcome Tesla, welcome all entrepreneurs, all innovators. Let us look ahead; let us visualize a region with global leadership. That is the direction, the rumbo, that the generations to come deserve, and nothing will stop us.
