Secondary economic sectors: Key to growth

Secondary economic sectors play a crucial role in the development of modern economies. This sector transforms raw materials into final products ready for consumption. Throughout its evolution, three key advancements can be identified:

• A constant increase in automation.
• A progressive reduction in waste and byproducts.
• Continuous improvements in process productivity.

In countries like Mexico, secondary economic sectors drive growth, job creation, and added value.

Definition of secondary economic sectors

Secondary economic sectors refer to industrial activities that transform raw materials from the primary sector into finished or semi-finished products. This process includes various activities such as manufacturing, construction, and other transforming industries.

In economic development, secondary sectors bridge the primary sector (agriculture, mining, fishing) and the tertiary sector (services, trade, distribution). In other words, they convert basic inputs into goods that satisfy people’s needs or are used in other production processes.

Importance in the economy

Secondary sectors are essential for several reasons:

1. Value-added generation: They transform raw materials into finished products, significantly increasing their value, boosting the national economy, and promoting exports.
2. Job creation: This sector is one of the largest employers, offering jobs in factories, industrial plants, and construction sites. Additionally, it generates indirect employment in sectors like logistics, transportation, and auxiliary services.
3. Economic diversification: Industrialization allows economies to rely less on primary activities, reducing vulnerability to fluctuations in raw material prices.
4. Technological development boost: Secondary sectors are major users and drivers of technological innovation, strengthening a country’s competitiveness in the global market.
5. Sustainability of growth: Secondary sectors contribute to sustainable economic growth and regional development by processing and adding value to national resources.

In Mexico, this sector represents a significant portion of the Gross Domestic Product (GDP). It is an essential component of international trade, thanks to the export of manufactured goods like automobiles, electronics, and textiles.

Examples of secondary sectors

The secondary sector includes economic activities focused on the extraction and industrial transformation of raw materials, turning them into goods or products that can serve as a foundation for creating new items or directly meet market demands. These products can reach the final consumer through distributors, retailers, or even directly.

Manufacturing industry

Manufacturing is the core of the secondary sector and encompasses a wide range of activities, from consumer goods to advanced industrial products. Mexico stands out for its ability to meet domestic and international market demands.

1. Automotive industry: Mexico is one of the world’s leading exporters of vehicles. Assembly plants and auto parts companies are key to the national economy, generating thousands of jobs and attracting foreign direct investment.
2. Electronics industry: Our country has become an important hub for the manufacturing of electronic devices, including televisions, computers, and home appliances.
3. Textiles and apparel: Although the Mexican textile industry faces competition from markets like Asia, it remains relevant, especially in high-quality, design-focused products.

Construction

The construction sector is another essential component of the secondary sector. It is responsible for developing infrastructure, residential, industrial, and commercial buildings, and public works. This sector generates employment and has a multiplier effect on the economy.

1. Public infrastructure: Roads, bridges, airports, and transportation systems are projects that improve connectivity and boost trade and tourism.
2. Residential building: Urbanization in Mexico has created a rising demand for housing, strengthening this subsector.
3. Commercial and industrial projects: Factories, warehouses, and distribution centers also form part of this industry, which is vital for trade and logistics.

Challenges and opportunities

In an increasingly globalized and technologically advanced world, Mexico’s secondary economic sectors face various challenges and opportunities.

Adapting to new technologies

The technological revolution is transforming the way secondary sectors operate. Companies must adapt from automation to artificial intelligence and additive manufacturing (3D printing).

1. Automation and digitization: Technologies like the Internet of Things (IoT), industrial robots, and smart management systems are changing production processes. This can increase productivity and challenge workforce training to adapt to these new tools.
   
   
2. Sustainability: Industries must find ways to operate in a more environmentally friendly manner. This includes implementing cleaner processes, recycling materials, and reducing emissions.
   
   
3. Globalization: The opening of markets brings both opportunities and competition. Mexico must continue strengthening its trade agreements and promoting foreign investment to solidify its position as a key player in global supply chains.
   
   

Skilled Workforce

The need for trained workers is becoming increasingly urgent. Secondary sectors require technical and specialized personnel to operate advanced machinery and oversee complex processes.

1. Education and Training: Investing in technical training is essential to ensure that the workforce can meet the demands of a modern industrial environment.
2. Talent Retention: Brain drain to other countries is challenging, so companies must create incentives to retain highly skilled workers.

Economic Diversification

While Mexico has clear strengths in sectors like automotive and electronics, diversifying the industrial base is crucial to reduce dependence on a few sectors and increase economic resilience.

1. Promotion of new industries: Emerging sectors such as renewable energy, biotechnology, and the circular economy offer great opportunities for diversifying the economy.
   
   
2. Regional development: Promoting industrialization in less developed areas of the country can reduce economic inequalities and foster more balanced growth.
   
   

Infrastructure and logistics

The quality of infrastructure and logistics services is a key factor in the success of secondary sectors. Mexico must continue investing in infrastructure to ensure connectivity and efficiency in the supply chain.

Secondary economic sectors are the driving force behind Mexico’s economic growth and its integration into global markets. Through key activities like manufacturing and construction, this sector transforms raw materials into high-value-added products, generating employment, attracting investments, and promoting technological development. To remain competitive, Mexico must stay at the forefront in areas such as adapting to new technologies, workforce training, and diversifying its industrial base. With a strategic and sustainable approach, secondary sectors have the potential to remain a key pillar of the Mexican economy, contributing to the well-being of its citizens and strengthening its position on the international stage.

At VYNMSA, we take pride in being part of this growth. We offer world-class infrastructure, strategic locations, personalized services, and tailor-made industrial warehouse solutions, allowing our clients to maximize operational efficiency and strengthen their supply chains. Follow us to learn more about industry topics.