MORE THAN COFFEE AND BANANAS
With a focus on a highly educated, English-proficient workforce, Costa Rica is transforming itself from an economy dependent on agricultural exports to a skilled services economy.
Until the 1980s, the economy of Costa Rica was based on the production and export of agricultural products, mainly tropical fruits. 30 years later, the country's economic activities have become much more sophisticated, including advanced manufacturing and a wide variety of services. Important multinational companies like Accenture, IBM, Pfizer and Cisco have trusted the capacity of the country to establish their services operations, and it is a trend that continues to grow.
Nevertheless, Costa Rica is still one of the largest exporters of bananas, coffee, and pineapples in the world, and agricultural products represent an important portion of the country's exports. It is easy to find Costa Rican pineapples or bananas in supermarkets in the US, China, and Europe. However, with the process of sophistication of the national economy, the country has been able to diversify its portfolio of exports.
According to CINDE, the Costa Rican Investment Promotion Agency, services account for about USD8 billion of the exports from the country, whereas goods sum up to USD10 billion. The latter is a composition of over 4,500 products that are exported to 150 countries.
With a population of only 4.8 million, Costa Rica has no other option but to look for opportunities in international markets to sell their products and services. Challenges in achieving full competitiveness remain, especially in terms of the transportation of goods. The country needs to invest more in its infrastructure and transportation. Although new projects are currently under development, such as the APM Terminal on the Atlantic coast and the recently announced airport of Orotina, there are mobility issues that prevent the country from reaching its full potential and making it more competitive.
Fortunately, Costa Rica has bet on the development of its services industry to grow and this has brought good results. A large number of companies in Costa Rica export services related to IT, such as software development and testing, Internet, mobile, gaming, and cyber security as well as shared services, like finance, accounting, supply chain, and customer support. In this sense, Costa Rica stands out as the first exporter of high added-value services in Latin America, surpassing bigger economies like Mexico and Brazil.
Pedro Beirute Parda, CEO of Procomer, the Costa Rican Exports Promotion Agency mentioned to TBY, “We expect that in a couple of years, exports of services will surpass that of goods, and we need to be building the right platforms, tools, and resources for that service economy to continue to expand." He added that Costa Rica has been able to adjust to the main requirements of international markets, which are quality, specialization, high standards and fair prices.
This has been possible due to the high quality of the Costa Rican workforce. According to the Global Competitiveness Report by the World Economic Forum, Costa Rica is the leader in quality of education in Latin America. The country also has the highest literacy rate in the region, with over 320,000 students enrolled in its more than 60 private and public universities. Furthermore, Costa Rica is ranked as second in Latin America in terms of English proficiency, another factor that makes it an attractive country for companies that intend to export their services.
Jorge Sequeira, Managing Director of CINDE, told TBY, “As long as we continue to develop the right human talent in the quantities that are required, foreign companies will continue to come." Thus, Costa Rica's human capital is the foundation of its strategy to continue growing and becoming a higher-level economy. The people of Costa Rica have been the key to diversifying the country's exports and transforming the base of its economy from agricultural goods to more sophisticated services.
MORE THAN COFFEE AND BANANAS
TABLE OF CONTENTS
Interview
Yamileth Astorga, President, Costa Rican Institute of Aqueducts and Sewers (AyA)
TBY talks to Yamileth Astorga, President of the Costa Rican Institute of Aqueducts and Sewers (AyA), on the challenges of providing high-quality potable water and working to prevent a water deficit.
read articleInterview
Luis Carlos Delgado Murillo, President, National Supervisory Council for the Financial System (CONASSIF)
TBY talks to Luis Carlos Delgado Murillo, President of the National Supervisory Council for the Financial System (CONASSIF), on the importance of collaboration between the private and public sectors and facilitating new business.
read articleInterview
Minor Rodríguez, General Manager, Coopesa
TBY talks to Minor Rodríguez, General Manager of Coopesa, on being the only self-managing cooperative in the world dedicated to heavy aircraft, the importance of communication, and maintaining a flat and democratic governance structure.
read articleReview
Reaching the Sky
The construction sector in Costa Rica has recovered significantly from a slump in 2016. However, the country has much to accomplish, especially in terms of ensuring new residential projects are inclusive for all income levels and fixing the infrastructure problem.
read articleInterview
Dr. Fernando Llorca Castro, Executive President, Caja Costarricense del Seguro Social
TBY talks to Dr. Fernando Llorca Castro, Executive President of Caja Costarricense del Seguro Social, on the importance of institutional longevity, joining the OECD, and bringing standardized services to every part of the country.
read articleFocus: Education Training
Get the Ball Rolling
One of the main factors that attracts investors to Costa Rica has been its skilled human capital. For this purpose, the government and academia are collaborating to improve programs and better align them to the requirements of several industries.
read articleReview: Education
Class Is In Session
High levels of public investment have made Costa Rica's education system one of the strongest in Latin America, and government leaders are working to improve teacher quality and ensure that the poorest Costa Ricans have access to quality secondary and tertiary schools.
read articleInterview
Marco Robert, General Manager, IMC Interamericana Medios de Comunicación
TBY talks to Marco Robert, General Manager of IMC Interamericana Medios de Comunicación, on the importance of articulating a clear philosophy, the industry's biggest weaknesses, and the ideal advertising setup.
read article