U.S. nearshoring initiatives, driven by the need to diversify supply chains and reduce reliance on Chinese manufacturing, are increasingly focusing on Latin America. While this transition primarily aims to mitigate U.S. risks associated with geopolitical tensions, it also offers an opportunity for Latin American nations to strategically strengthen their economic foundations and gain greater autonomy in the global economy.

Nearshoring doesn’t need to be about filling in gaps; it can be about sparking waves of entrepreneurship and innovation. Through recent nearshoring shifts, countries like Mexico and Costa Rica could move beyond traditional economic dependencies and carve out new identities in high-tech and next-generation sectors such as electronics (semiconductors) and electric vehicles.

For example, the “Semiconductor Supply Chain Security and Diversification Act” and the CHIPS and Science Act in the U.S. are catalyzing investments to build semiconductor production facilities and infrastructure in the Western Hemisphere. This has led to a significant shift in supply chain dynamics away from China and Taiwan, instead to Costa Rica. If seized, this presents an opportunity for the Central American country to become a prime producer of some of the most advanced technologies globally available.

Costa Rica can capitalize on this by adapting its existing environmental sustainability framework to establish Green Manufacturing Zones. These zones could focus on high-tech industries like semiconductors and renewable energy technology production, allowing Costa Rica to become a leader in sustainable high-tech manufacturing.

This approach could foster the development of local businesses, attract foreign investment, and support innovation in green technology, ultimately producing internationally recognized patents in environmentally sustainable manufacturing. Moreover, by integrating into the semiconductor supply chain, Costa Rica could expand its role in global trade networks, diversify its exports, and link its high-tech development to its robust agriculture sector.

In Mexico, leveraging agreements like the USMCA provides an opportunity to develop advanced manufacturing sectors such as semiconductors and electric vehicles. A proposed Advanced Manufacturing Development Act could incentivize investment in these high-tech sectors by offering subsidies, tax incentives, and funding for R&D.

This policy could reduce reliance on U.S. markets by fostering domestic production and encouraging partnerships with global players through technology transfers. Integrating local industries into global value chains would bolster Mexico’s technological capabilities and empower Mexican entrepreneurs, allowing the country to cultivate a dynamic domestic economy that is not solely dependent on foreign capital or dominated by multinational corporations.

Both Mexico and Costa Rica can maximize these opportunities by spearheading the formation of a Latin American High-Tech and Innovation Alliance. This initiative could foster regional collaboration, enabling these nations to diversify their export markets and share in the development of critical industries. By building larger regional value chains, they could position themselves as alternative hubs for global production, reducing their economic dependency on the U.S. while leveraging international partnerships.

Additionally, Mexico and Costa Rica should prioritize building an entrepreneurship and innovation ecosystem. This could include the establishment of innovation hubs and incubators that support local startups and entrepreneurs by providing access to financial resources, mentorship, and technology. Through such initiatives, local small and medium-sized enterprises (SMEs) can be integrated into global supply chains in high-tech.

Policy reforms in both countries should also make it easier for investors to channel capital. By offering tax credits and simplified regulations, both nations can encourage the creation of a robust venture capital ecosystem, driving innovation and reducing reliance on multinational corporations.

Workforce development is another critical area. Both countries must invest heavily in STEM education and vocational training tailored to the demands of high-tech industries. Collaboration between educational institutions and private companies can ensure that workers are equipped with the technical skills needed for these advanced manufacturing sectors.

Additionally, governments should establish public-private partnerships with foreign investors to create training centers that provide specialized workforce development programs, reducing reliance on foreign expertise and ensuring long-term economic resilience.

As U.S. and Chinese investment strategies evolve, Latin America stands at a pivotal moment. Nearshoring presents an opportunity for Mexico and Costa Rica to not merely fill gaps left by geopolitical shifts but to craft a more resilient and diversified economic narrative. By fostering regional collaboration, investing in critical infrastructure, and developing human capital, these countries can elevate their standing in the global economy, reduce dependency on external forces, and forge a new path of economic sovereignty.

With the right policy frameworks, investment in innovation, and strategic cooperation with both the U.S. and other global powers, Latin American nations can ensure that the evolution of global supply chains works in their favor, promoting widespread and sustainable development across the region.