UNDERSTANDING HERMOSILLO’S GROWTH CONSTRAINTS AND OPPORTUNITIES
Research developed with the Harvard Growth Lab, in collaboration with Hermosillo ¿Cómo Vamos?, to better understand the forces shaping economic growth in Hermosillo and identify realistic opportunities for diversification.
Economic transformation rarely begins by choosing industries.
Regions often try to accelerate growth by promoting sectors they hope to attract. But sustainable economic development rarely starts that way.
It begins with understanding what is holding the economy back and where new opportunities are most feasible.
This is the foundation of the Growth Diagnostic methodology developed by the Harvard Growth Lab.
The approach analyzes the structure of a regional economy to identify:
• constraints that may limit investment and productivity
• opportunities where existing capabilities can support new industries
When regions remove the constraints that limit expansion while strengthening the capabilities that allow new economic activity to emerge, growth becomes more sustainable.
GROWTH CONSTRAINTS IDENTIFIED IN HERMOSILLO
The Growth Diagnostic conducted for Hermosillo identified two areas that could become binding constraints to sustained economic growth if not addressed.
Water availability and management
Hermosillo operates in a water-scarce environment. As industrial activity and population continue to expand, ensuring reliable water supply and improving water management will be essential for supporting future investment and long-term economic growth.
Urban development, housing, and mobility
Economic expansion places increasing pressure on housing availability, urban planning, and transportation infrastructure. Ensuring that the city can support a growing workforce is critical for sustaining industrial development and maintaining competitiveness.
Addressing these constraints early helps ensure that economic growth can continue without creating bottlenecks that limit investment or productivity.
OPPORTUNITIES IDENTIFIED IN THE RESEARCH
Alongside these constraints, the research identified areas where Hermosillo already has capabilities that could support new economic activity.
Four opportunity areas emerged from the analysis.
Nearshoring. Global supply chains are reorganizing to serve the North American market. Hermosillo’s manufacturing base and proximity to the United States position the region to benefit from this shift.
Cross-border trade in services. The research highlights opportunities for Hermosillo to expand tradable services connected to the Arizona–Sonora corridor, leveraging professional talent and cross-border economic integration.
Green growth opportunities for supplying the global energy transition. Industrial capabilities in the region could support supply chains linked to technologies and industries driving the global energy transition.
Powershoring. Reliable and competitive electricity is becoming an increasingly important factor in industrial location decisions.
Together, these areas point to practical pathways for diversification and productivity growth.
FROM RESEARCH TO ECOSYSTEM ACTION
Understanding constraints and opportunities is only the first step.
Economic transformation happens when institutions across the ecosystem align around a shared understanding of regional priorities.
The findings from the Hermosillo Growth Diagnostic were presented and discussed with a wide range of stakeholders, including:
• private sector organizations and business leaders
• industry chambers, clusters, and associations
• municipal, state, and federal governments
• universities and research centers
These conversations have helped inform planning and strategic discussions across the region.
Several initiatives connected to these opportunity areas are now emerging.
For example:
ATP-Ready Sonora focuses on strengthening the capabilities required to attract semiconductor Assembly, Testing, and Packaging.
Semicon Desert explores opportunities linked to engineering talent, tradable services, and semiconductor design.
These efforts reflect a broader ecosystem objective: turning research insights into coordinated economic action.
APPLYING THIS APPROACH IN OTHER REGIONS
Many regions face similar questions.
Which industries offer realistic opportunities for diversification?
Which constraints limit investment and firm growth?
Where should institutions focus their efforts?
Growth diagnostics provide a structured way to answer these questions by combining rigorous economic analysis with local collaboration.
The Hermosillo research was developed through a partnership between the Harvard Growth Lab and Hermosillo ¿Cómo Vamos?, with BI5ON helping coordinate the process and connect the research with local stakeholders.
BI5ON works with governments and institutions interested in organizing similar efforts — connecting research partners, coordinating ecosystem engagement, and helping translate analytical insight into actionable regional strategies.