This document was received by the Digital Commons on July 27, 2006 and posted on August 3, 2006.

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Research suggests that competition driven by globalization has diminished Mexico's position as a low cost outsourcing destination due to their increased wage rates. However, the Information Technology (IT) industry in Mexico is capable of substantiating the value of the higher wages as many multi-national corporations (MNCs) are increasingly outsourcing their sophisticated manufacturing to the country. This thesis addresses the future of the IT oursourcing in Mexico and describes how factors contributing to its success can be improved to develop a sustainable competitive advantage for Mexico. Recommendations are provided based on a synergy of the successes that China and India have experienced in outsourcing.