Interview: New ACI Medellín Head Juan Camilo Mergesh Is Working to Position the City as a Leader in Science, Technology, and Innovation

Medellín has become the technology and innovation center for Colombia, and local leaders continue to hail the nation’s second city as a regional leader in talent, culture, and entrepreneurial spirit.

No organization works harder in this mission than ACI Medellín, the city’s public investment promotion agency, and Juan Camilo Mergesh is now leading the way. He recently took over as executive director in February after the previous director, Eleonora Betancur, left to join the the administration of Colombian President Gustavo Petro.

To learn more about how ACI Medellín is positioning itself and pursuing its goals, Finance Colombia Executive Editor Loren Moss recently sat down to talk with Mergesh about the organization’s focus on technology, ongoing international relationships, and cooperation with companies from across Latin America.

Finance Colombia: I know you have only been in your position for just a few months, and because the government changes every four years, you don’t have that much time to have an impact. But can you tell me about your goals? How will you measure if your time is successful?

Juan Camilo Mergesh: I’m not dogmatic at all. I like achieving my goals pragmatically, and I am focused on very punctual goals. I’m a manager. Time goes fast, and I set some specific goals that can be achieved in a short period of time, which is the seven months we have left.

On top of that, there are some goals set by the mayor related to a social and territorial approach, such as expanding cooperation to new places, to the districts, and to Medellín’s poorest neighborhoods.

And there is expanding cooperation along with the development plan and focusing on new 4.0 technologies, innovation, and science. We believe this administration is the industry of the future, and in this re-industrialization process that Colombia is going through, we believe one big goal of the cities is quitting coal and the extraction of the natural resources that we’ve always had. We would like to change from exporting those resources to exporting services — and those services export minds and knowledge.

These are the two priorities we have, and we must — and we will be able to — achieve these goals to boost the future of Medellín.

“We believe one big goal of the cities is quitting coal and the extraction of the natural resources that we’ve always had. We would like to change from exporting those resources to exporting services.”

– Juan Camilo Mergesh

Finance Colombia: For ACI Medellín, I know another goal is always to promote and attract investment to Medellín, including foreign companies and businesses. What are some achievements or projects you’ve participated in?

Juan Camilo Mergesh: Yes, we work to position Medellín in the international sphere and keep Medellín as a relevant global player in different dialogues with the most important cities in the world — like Phoenix and cities in Korea, Argentina, and Spain. We’ll keep taking care of that.

We also always have carefully programmed indicators already given to the development plan — almost $150 million USD for this year — and also for investment as well of almost $10 million USD ready for cooperation. These are just numbers. But we are giving them a human face and seeing the people this project will impact and how it will help the Medellín community have better living conditions and better salaries.

Finance Colombia: I know there has been a lot of work with Phoenix in the United States. Can you tell me more about that?

Juan Camilo Mergesh: Yes, we dialogue with communities that share our focus on the digital economy. The first, which I was in charge of, is the economy of the North American software valley in Phoenix, Arizona. I had to discuss and program the agenda to meet the Phoenix mayor to sign a memorandum of understanding. Within this, there is a clause that states that we are working together to develop Medellín’s digital economy from Arizona and with Arizona companies.

We also met with the president of the Chamber of Commerce of Phoenix about some flaws, or complaints, that they have identified, and we gave them solutions only we could provide. Basically, all of their issues are related to some local human talent they have had.

We are at a geopolitical crossroads with the production of microchips: 21st century gold. You couldn’t be recording this interview without microchips — or drive cars or fly planes. We couldn’t have cell phones or computers without these elements. These next-generation microchips are being produced in Taiwan, but there they have a geopolitical element that’s very unstable.

Taiwan is becoming one of the richest islands in the world because of chip production, but Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s biggest microchips manufacturers, chose to make a major investment in Phoenix with more than $40 billion USD to build an impressive plant.

Finance Colombia: Yes, I know they made a major investment!

Juan Camilo Mergesh: Then they built impressive hubs. They have a technology hub. They own an ecosystem where science is applied to medicine, transport, education, and AI — an entire ecosystem in which each one nurtures the other with the new use of microchips.

However, they have an issue in Arizona: they don’t have a workforce. That was the problem identified the president of the Chamber of Commerce. They told me the number of jobs is twice as high as the number of people. And I said, in Colombia, we have the opposite issue: For every three people, we have one job!

So, there, we found a win/win situation. Medellín has long has been focusing on creating human talent, promoting innovation, technology, and knowledge, especially with work from organizations such as Ruta N, an innovation center and an incubator of startups and digital innovators.

Here in Medellín, we’re creating strategies for innovation, technology, and new ways of designing 4.0 technology to reach citizens from the farthest, most depressed, and most violent districts. This goes along with an educational revolution in this administration, in which all the children from public schools — or most of them — have computers provided by the government. This way, they can start surfing the modern Mediterranean: the internet.

Here in Medellín, we’re creating strategies for innovation, technology, and new ways of designing 4.0 technology to reach citizens from the farthest, most depressed, and most violent districts.

– Juan Camilo Mergesh

We have provided 180,000 computers to children from all public schools in Medellín. All that creates an ecosystem, along with companies that have entered the territory like MercadoLibre and Globant. All the software companies that compose this ecosystem are attracted by the commitment — and also tax matters. It becomes interesting for the investor when tax is reduced to 50% — I mean, local tax, which is not our industrial and commercial tax — but also when the property tax is reduced to 50%. Once they reduce that, it becomes attractive to investors.

On one hand, here in Medellín, they have a tax incentive that is almost 40% of what they charge in their country. They also find a human talent supplier, because of all these educational centers and the digital revolution that companies naturally nurture. But they also have the support of the government when installing here, low-price coworking organizations like Ruta N, and the whole ecosystem that has all the vitamins to grow up and become very productive.

That made Medellín attractive. It almost sells itself to societies that need these kinds of ecosystems because, at this moment, they are in a geopolitical crossroads, and Medellín is the best ally to overcome and grow together.

Finance Colombia: You have tackled a very important topic. When I talk to colleagues around the world — analysts and journalists — about the topic of supply chains there is a fear of hostile events between China and Taiwan, and just disruption in general, so they need to have another place. There are companies like Apple that are taking many operations out of China and moving them to India. I’m from Ohio, where Intel is building its new factory with “only” $20 billion USD, so I’m kind of jealous oh Phoenix!

How does Medellín — or, on a bigger scale, all of Colombia and Latin America — use this to take advantage of the opportunities that in the past always went to Asia? Medellín and Colombia have a history producing textiles. Why not manufacture the chips in Colombia?

Juan Camilo Mergesh: First, I would say Medellín — and Colombia and all of the Americas — has significant advantages around the world. For one, we have the same time zone as the United States and Canada. That is an advantage when providing long-distance services because we don’t have to answer communications at 4 am like they do in India or Taiwan. That’s very important.

Secondly, we have an exchange rate that is attractive to the investor. The Colombian minimum wage is around $275 USD monthly. That’s not even the minimum weekly wage in many place — or maybe daily since you’re an American!

Finance Colombia: I think it’s different in every state in the U.S., but they will pay more than the minimum wage to attract the right people. But, here in Colombia, you can hire great talent for a minimum wage.

Juan Camilo Mergesh: Talent that is committed to the implementation of new technologies. Talent that wants to learn in the global labor market how are value chains made and has new ideas to contribute to these value chains. We already showed this in Ruta N, the incubator of ideas for new technologies and startups in the world.

These are the three crucial elements that Medellín has, and it’s very different from what can happen in Taiwan or in other places of the world in terms of economies and digital services. It’s no secret that in Medellín there are many BPOs and services being provided to North America.

Another important point is that Medellín is the special district of science, technology, and innovation. It’s legally built as a district where the national budget will help cultivate and promote the startup sector. It won’t be in Pasto or Bogotá. No city in Latin America has this characteristic of being a district as focused on science, technology, and innovation as Medellín. Barranquilla is the port district, I think. Cartagena is a historical district. But we are an industrial district of science, technology, and innovation.

There are huge elements to exploit because we have that combination of human talent, universities, and companies already located and supported by the government with tax reduction, but also with taxes and cash remittances towards Ruta N and others. They fund many of these ideas that are built in the territory.

I believe that’s how this perfect ecosystem is created — and that can’t be compared to any Latin American city. We can brag about it, we have a very structured system. And ACI Medellín comes to make it even more dynamic it by globalizing this industry. They create these bonds and attract investors by exposing it to the world, and taking away that cliché that 30 years ago we were the most violent city in the world, but now we are transitioning to being the most innovative city in the region.

Finance Colombia: I would like to ask one final question: Why Medellín? Talking not to me, but to companies that are the global investors and may be looking to build a BPO, technology factory, an IT company, or something else. With all the places you have been around the world, why Medellín?

Juan Camilo Mergesh: Medellín has impressive systems at a Latin American-level, regarding public transport and public service. We are the most public city in Colombia and the region. The subway system, for example, is financed and operated completely by the city — by a utility company, which is completely public. We have EPM, a public services company that provides water, sanitation, energy, and gas. It builds quality living standards and mobility standards for the operators, which makes Medellín a great place to live for those who are located here.

Workers, digital nomads, come here to Medellín.

Then there’s the weather! We have the same season for the 12 months. It’s an attractive city from the point of view of weather, but also of business.

We are an industrial district of science, technology, and innovation. There are huge elements to exploit because we have that combination of human talent, universities, and companies already located and supported by the government.

– Juan Camilo Mergesh

We have Latin American brothers here already, and it’s also my goal to cooperate together with the region because we share the same language, religion, culture, the same sky — but also the same concerns. We have undeniable violence, social exclusion, and poverty in many cities of our territory. And we can show how, from a Latin American perspective, we have started to take action in those matters, and said, look, these are the problems and we haven’t solved them. But we are working with this huge group to combat them.

Those social and economic facilitators that sustain economic administrators end up being social facilitators that make Medellín a regional role model. And we are absolutely willing to show it in Guayaquil, Quito, Caracas, Montevideo, Buenos Aires.

We have had great cooperation and an ongoing link with Argentina, which is a very important Latin American brother. They are going to open a consulate in Medellín because many Argentines come here. A lot of Argentinian companies came here with their Argentinian workers. That creates a scenario in which almost 70,000 Argentines need IDs, passports, and paperwork. There are more Argentines per capita in Medellín than in Bogotá, and that creates a very special dynamic because it also brings cultural exchange. We have now 200 years of relationship with Argentina. We have the Festival de Tango. We have the Festival de la Filarmónica with Argentinian cultures. The Festival de Miradas, where almost all actors and movie directors come.

All that makes Medellín more dynamic and makes it a role model in the region, in terms of cooperation and cultural exchange. Look, we are operating the Quito subway. Metro de Medellín operates the Quito subway. That’s cooperation, that’s city diplomacy, that’s how we grow together.

Not only is Medellín becoming the most interesting city in the region, but it’s also taking the region out of the places we’ve fallen into as Latin American countries since a long time ago — poverty, exclusion, and lack of opportunities for the young. All that becomes the cover letter for Medellín.

Photo: Juan Camilo Mergesh of ACI Medellín. (Credit: ACI Medellín)