Costa Rica plays to its strengths and develops talent

Q: What kind of FDI strategy is Costa Rica pursuing these days? What sectors and markets are you focusing on?

A: Costa Rica continues to stick to its strategy of focusing on strategic sectors. We don’t try to attract investment broadly in any sector but basically the sectors that we focus on, which are the fasting growing sectors in recent years, have been services. Within services we have two broad areas. One is general business services – outsourcing, business process outsourcing and shared services sectors, as well as finance, accounting, HR, logistics/supply chains – those types of services. The second largest group is IT and IT-related services that includes mobile apps, web design and development, software testing, the Internet of Things, cloud computing and data analytics, which have become very strong lately. 

We have another area, life sciences. We have a very well established ecosystem of more than 70 companies now that includes the largest companies in the world delivering their final products out of Costa Rica globally. But we have also another 50 or so international suppliers in that sector so that has really created an ecosystem and cluster of companies that is a virtuous circle, allowing more companies to come in and trade in Costa Rica. We are very competitive. 

Finally the fourth large area would be advanced manufacturing. Costa Rica is not a low-cost destination for FDI – we are aware of that. So it [has] low volume, high specialisation in areas such as electronics and aerospace, and specific areas within the automotive industry. Now we are looking into areas such as bio, personal care and speciality foods that can take advantage of Costa Rica’s biodiversity. 

And we are moving more and more into areas such as research and development [R&D]. Companies such as Intel, HP and IBM are all engaged right now with Costa Rica in R&D projects. So this is where we see the dynamic areas moving. 

We are putting a lot of effort into opening new markets, including Europe, UK, Germany and France. These are all big players in the areas that I have just mentioned: sciences, services, technology, financial services.

We are also looking at Asia: Japan, South Korea – we have just signed a trade agreement [with South Korea] – negotiations were finalised but this needs to be approved by both countries; it will be an important move towards investment from South Korea – and of course China, for very specific sectors. So we are looking to diversify.

Our main investor in Costa Rica is the US. With Donald Trump this has brought some challenges. We are looking at continuing to work closely with North America. The firms that are already in Costa Rica, we are helping them grow and deliver sophisticated operations. There is a lot of opportunity here but we are also looking at diversifying for direct investment purposes. 

Q:  What do you see as your biggest challenge?

A: Our biggest strength is our biggest challenge: the scale of the country. Costa Rica has five million people. The reason all of these companies are in Costa Rica – you can ask them over and over again and they always say – is the human talent. It’s not the cost, it’s not our large market, it’s not our minerals or oil, it’s the talent. So that’s our biggest strength but at the same time that’s our greatest challenge as well: keeping up with the demand.

This is not only Costa Rica’s challenge. We all know that in these areas that I have mentioned, the availability of talent has become a challenge for every country. Here, in Europe, in the US, millions of jobs that could be created if you found the right talent. Costa Rica is part of that globalised economy and so we have that challenge as well. We work with the multinationals to fill that gap.

How do we do that? By creating partnerships between multinational corporations and local academia so that academia can react to the demands, of today and the future, of those companies. They really collaborate closely. In many cases, companies such as Intel, IBM or HP will bring their people to train Costa Rican trainers and professors so that we can adapt academic programmes to the need of these companies. 

But at the same time, they also collaborate with international academia to bring programmes into Costa Rica that satisfy those needs. I’ll give you a good example. Recently we have established a relationship with the University of Minnesota, one of the leading academic institutions worldwide for medical devices and sciences in general. With the Costa Rican technological institutes we put together the first and only master’s degree programme for medical devices in Latin America, which has been working for three years now. We have graduated a couple of generations of young men and women who have finished that programme. It’s a good example of the type of efforts that the institutions are making to keep up with that challenge. 

We have other challenges. In infrastructure, we always try to improve our investment climate, to reduce red tape etc. So there are other issues, but if I had to pinpoint one challenge I would say the talent. Together with the government, academia and companies, we need to prepare the people and to prepare the specific companies to face these challenges and to look at them as opportunities – not just a threat – which they are. We need to invest in people and in training at the right time.