COSTA RICA - Economy
Managing Director, Costa Rican Investment Promotion Agency (CINDE)
Jorge Sequeira is the Managing Director of the Costa Rican Investment Promotion Agency, CINDE. He joined CINDE in 2014, after the Trade Promotion Agency of Costa Rica, PROCOMER, where he served for four years as the General Manager. Prior to that, he co-founded and acted as CEO of Exactus Corporation, a business software development company with presence in 12 countries throughout Latin America. He acted also as vice-president of the board of directors of the Costa Rican Chamber of Industries, as well as of GS1 Costa Rica, the local office of the Brussels-based global organization for the facilitation of commerce. He graduated Magna Cum Laude from Tufts University, in Boston, Massachusetts, where he obtained an engineering degree in computer science and applied mathematics. He then obtained a post-graduate degree in administration and management from the Harvard University School of Extension, also in Boston.
Costa Rica is an example to the rest of the world of how a country can make a real transformation of its economy. We were exporting four basic agricultural products with no value-added to a limited number of countries around the world in the 1980s. Today, Costa Rica is exporting 4,500 different products to 150 countries around the world, many of which are value added with a high level of sophistication. Products and services make up half and half of our exports, with USD10 billion of the former and USD8 billion of the latter. Looking at the transformation and how me have moved from a basic economy to a more sophisticated one, it is based mostly on IT and in IT-related and enabled industries, including software development, gaming, mobile applications, customer support, finance, accounting, HR, and cybersecurity. All of these new areas did not exist 15-20 years ago.
We can divide them into four large sectors. One of the most popular is life sciences. It is a sector with a lot of dynamism that continues to grow, hire more people, increase its footprint, and cultivate its ecosystem here. Another is advanced manufacturing, including aerospace, automotive, electronics, and other types of industries. It is not volume-based, but rather low-volume, high sophistication products. We cannot compete with Mexico or China in terms of high-volume industries. However, we are delivering highly sophisticated electronic components for Tesla. In any industry that requires a great deal of human talent and availability of a labor force that can put together different electronic components, test them, and improve them, we are competitive. The services sector is split in two: everything IT related and enabled, such as software development and testing, internet, mobile, gaming, and cybersecurity; and everything that has to do with shared services, such as finance, accounting, supply chain, and customer support. And the last sector is light manufacturing and food industry. Those are the four sectors on which CINDE is focused.
We have an entire department dedicated to the investment climate. Its job is to work on all of the areas that help us improve the investment climate so more companies will come to Costa Rica. It starts at the human talent side of the equation. We need to work on infrastructure, electricity costs, bureaucracy, and red tape, but the most important area is human talent. If we continue to develop the right human talent, companies will keep coming. We work with the Ministry of Education closely through its programs to help improve the level of English taught at public schools and to bring STEM education into public schools and technical colleges so students graduate with a wider range of skills. All 70 private and public universities in Costa Rica are well known and respected. We also work closely with them to ensure students graduate with the skills needed by companies investing in the country. We help develop programs that encourage students to look toward the future. This ensures careers are aligned with the needs of the market.
As long as we continue to develop the right human talent in the quantities that are required, foreign companies will continue to come. They are not coming to Costa Rica because it is a low-cost destination; they are coming here because they are not finding the right talent in their local countries. The quality of our education is high; it has been tested and has a track record to prove it. Costa Rica has become expensive to operate in because it is a small country with a small population, so people compete with each other for the talent. That means raising salaries is necessary. This has happened in the call center field, where Costa Rica is not competitive anymore. In the shared services sector, however, because we have increased costs and raised salaries, companies have transformed their operations here from lower value-added to high-level sophistication in order to justify paying higher salaries. In terms of productivity numbers, there has been a significant increase over the last decade. Yes, we are more expensive; however, we are producing much more. Instead of letting high wage earners go, the idea is to train them better and give them high value-added activity.
I believe it is our focus on the customer. Very few investment promotion agencies in the world help companies throughout the whole process—from the moment they are prospect to the moment they are making a decision, helping them install, and once they are here, helping them understand how to grow horizontally or vertically and expand their footprint, and never letting go. All companies that have launched operations in Costa Rica through CINDE continue to operate here. We have forms for them to participate in HR, training, and R&D. That really sets us apart, because companies see us as their partner more than a government agency that is just doing what it is obligated to do. We use a lot of technology to provide better services and invest in innovation to be on top of the newest trends, but those are all part of a single strategy that is to be a good partner for growth and success.
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