Wire -rimmed spectacles and T shirts with silk screened startup symbols, they seem like your typical 20-something coders. The young men huddle in the noon sunlight, smoking cigs, sipping coffee out of paper cups.

Behind them remains a bustling co-working space with 850 technology workers and tons of startups building programs, tweaking on-line experiences, pumping outside layout. But they near Northern California. They’re hundreds of miles south, in Mexico’s “Digital Creative City, Guadalajara,” the capital of the state of Jalisco, where affordable talent and government subsidies bring foreign technology giants.

New York Los Angeles, as Silicon Alley as Silicon Beach. None faces the same south-of-the-edge inspection.

With several thousand startups and blue chip giants, also, Jalisco yearly exports $21 billion in technology products and services, based on the state’s initiation ministry. Multinationals like Oracle, IBM, Intel, HP, Dell and Gameloft have satellite offices. Jalisco has 12 universities, for instance, esteemed Tecnológico de Monterrey, creating an IT funnel of 85,000 grads a year.

But Mexico is known for other differentiations, which cast long shadows.

Forty mayors are slain in eight years. Duplicated getaways of cartel leaders corruption snaking to the greatest government offices, like El Chapo, violence and bullying bore an aura of impunity.

Plain amounts from a country of about 130 million—where much of this chaos happens in the nearby states of Sinaloa, Guerrero and Michoacan, but much less observable in Jalisco, which locals are quick to note.

‘Sense of chance’

Jalisco, understood for hot sauce, mariachis and tequila, is relatively tranquil. Less, or buchon -brutal offense, practiced here is not visible: extortion, money laundering, graft. And yet, technology is booming—outsourcing is a $12 billion a year business, based on industry figures.

Kumar, an Indian emigre who landed in 1982 while at TCS in Pittsburgh, has worked for five years with Mexican teams, flying in from Texas. His firm, which has received an entrepreneurship award from the Mexican authorities and was named one of Inc’s quickest-growing businesses in 2015, has over 100 customers, including heavyweights like IBM and McDonald’s and ventures with Microsoft and Appcelerator. At $5 million a year in sales, it’s by no means an upstart— a growing, midsize player with international customers, although not a marketplace leader.

Retention speeds here match those of Silicon Valley’s, although deep-pocketed unicorns have their pick. It’s difficult to compete with Oracle’s pilfering talent and HP’s. Yet Abhijeet Pradhan, Kumar and his associate, say they’ve kept ability thanks to a Mexican national, Guillermo Ortega and entrepreneur who runs operations as iTexico’s third creator. Having a local has helped prevent pitfalls.

Is ’t there more American knowledge of Mexican IT?” Kumar says finished dinner at Andares, an open air shopping center with boutiques including Hermes and Burberry. “You could be in California ”

“Mexico’s quite complex,” Ortega says. We ’re quite active in the ecosystem convert and to create gift. This is what I work on every day we train, how we bring individuals, how they are retained by us.”

Detroit’s “Big Three” automakers make here. Do Mercedes Benz and BMW. Local technology roots are deep. Motorola and iBM arrived in the 1960s to assemble silicon wafers and semiconductors.

Why? IT became a no brainer. Through the years, hundreds of electronic equipment companies followed.

“It’s an issue of promotion,” Kumar says.

The North American Free Trade Agreement (NAFTA) encourages tariff-less business. In addition, it enables Mexicans to get U.S. work visas (if they’re sponsored by an U.S. business). And NAFTA ensures U.S. businesses here keep complete copyright and patent protection.

This makes Mexico more cost effective than India touted as the location for IT outsourcing. Other intangibles: Tapatios talk English like Americans, not Brits, and are more aligned than Eastern Europeans or South Asians.

“ the men in India wo’t set the steering wheel in exactly the same area When you request someone to design an automobile,” Kumar says. When you’ve got teams in Mexico “, you do’t need to describe the company theories.

However, Kumar frequently has a difficult time pitching fellow Americans who distrust the notion of feasible Mexican gift—and protection. So he encourages present and prospective customers to see, coordinating one-on-ones with programmers. What Kumar reveals them is’t assembly line generation, but intellectual property workers: program creation, high level engineering.

I was completely blown away by the amount of ability I saw,” says vice president of engineering at xTV, Drew Anderson, an internet TV service based in Redwood City, Calif.

“I’m sold as an IT centre on Guadalajara,” he says.

It’s not only foreign firms locating success.

Gutiérrez says there was no enterprise financing until a company called Mexican VC started investing little sums—around $20,000 a pop—in 2011. 500 Startups purchased that fund. Incubators and accelerators started, and expat VCs arrived.

“The median seed investment is currently between $80,000 and said he $120,000,”.

Sunu has assembled a detector bracelet for the blind. A marketing technology enterprise, VoxFeed, raised almost $2 million in 2015. Espiral, a mobile wallet service that’s a combination of Stripe and Square, is expanding fast with public and private customers. With just 15 percent using credit cards, and half the state’s people under age 27, more than 100 million mobile phones, it’s a play that is possibly extremely successful.

Two of the three creators of WePow, who devised scale video are local. WePow is a player in business hiring, with customers including Philip Morris and Adidas. In February, Microsoft got Xamarin, a software and program company whose cofounder is from nearby Mexico City (the sum was undisclosed but considered to be north of $100 million).

“There’s a growing awareness of chance,” he said. We ’ve seen the snowball effect beginning. Before, creators were attempting to mend issues for Mexico, not global issues. I was extremely reluctant to where this was going. This new batch of entrepreneurs have been transforming what we anticipate. There’s at least 10 startups whom I believe in the next three to six months are likely to lift important rounds.”

And he believes it could be brought by a local unicorn to the fore.

“It’s excessive to attempt to be Silicon Valley because it’s not possible to repeat.”

“And it’s occurring with engineering, with IT, Silicon Valley is coming here.”

With as many as 80,000 production occupations and approximately 25,000 working in Guadalajara, the technology future rests in foreign business recruiting and local startups developing name exposure. But Gonzalez, unlike Kumar, does’t believe Indian outsourcing can be overtaken by Guadalajara. “Never. They’re 1.2 billion individuals. They’ve volume. For this business, quantity is quite significant.”