San José, Costa Rica, since 1956
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Talent and good policy are key targets for improving Costa Rica’s competitiveness, forum experts say

Costa Rica is well-positioned to start attracting more high-tech jobs and improve its workforce, according to one keynote speaker at the Competitiveness Summit, held Wednesday at Escazú’s Hotel Real InterContinental and co-sponsored by the Costa Rican-American Chamber of Commerce (AMCHAM) and global consulting firm Deloitte.

“The key to competitiveness is talent – it’s the ability of a society, the ability of a country, to skill and re-skill the population,” said international consultant William Eggers, from the United States.

Eggers clarified: “It’s not just about having college graduates and so forth; it’s about the ability to re-skill people who are in their 40s, in their 50s, and even 60s, so they can go from low technology and manufacturing to high-tech manufacturing.”

One thing Costa Rica should focus on, Eggers said, is becoming “a talent magnet where businesses would want to move in.

“If you can be a place where talent wants to come and you can grow your talent, that brings a lot of other things,” he added.

But in order to design good policy to meet that goal, decision makers should evaluate current public policies in education, immigration, intellectual property, licensing and regulation, Eggers said.

“Ask how does this enhance our talent competitiveness in Costa Rica, [and] I think you start coming up with different policies, different approaches,” he said.

The speech followed the release of a business competitiveness survey conducted by CID-Gallup Latinoamérica on behalf of AMCHAM and Deloitte. The survey polled 172 of Costa Rica’s top company managers. One in five said the main barrier to competitiveness is “tramitomanía,” an ugly-looking word that refers to lots of red tape and bureaucratic headaches.

The next two barriers cited were corruption (14 percent of respondents) and the high cost of electricity (13 percent).

AMCHAM Vice President Federico Chavarría highlighted a lack of long-term planning as another setback to the country’s competitiveness, which he said was linked to four-year political cycles.

“It’s short-term political management and it’s difficult to carry out the changes that are required,” he said.

Chavarría recognized, however, that the government can’t resolve all problems, just as the productive sector can’t work to improve the situation on its own.

The survey, conducted in early July, concluded that top business managers believe the president should immediately address Costa Rica’s problematic transportation infrastructure, and he should hone the country’s fiscal and monetary policy to provide clarity and improve competitiveness.

According to 58 percent of respondents, the Latin American country that best reflects a positive competitiveness environment – from which Costa Rica should learn – is Chile.

Tied for having the record for the most outer space flights (seven), Tico astronaut Franklin Chang, right, knows how to spot a silver lining.

Lindsay Fendt/The Tico Times

An oasis from politics

Costa Rican President Luis Guillermo Solís, from the Citizen Action Party, also addressed the forum, calling it “an oasis where a politician can come to think.”

For the president, who took office in May, another important barrier is inequality – not only in terms of income, but also in terms of territory.

“Even in such a small country as ours, it is very troubling to see the inequality between urban centers and the peripheral regions, and on this issue, the state has a lot of work to do to generate the conditions for investment to move out of San José,” he said.

Solís also mentioned the inequality between women and men, and the conditions faced by the young and elderly, who he said are excluded from the market. He then highlighted the widening gap between the least dynamic sectors of society and the most dynamic.

“In the past 30 years, only one of these sectors has been developed, which involves the external sector and attracting investment. What’s left behind are local and regional economies, and the gap between the internal and the external is causing us problems,” Solís said.

Most company managers don’t see things changing soon. Of those surveyed, 43 percent believe the country’s economic situation will be exactly the same in one year. Only 34 percent believe it will improve, and 23 percent say it will worsen.

But they remain optimistic when it comes to their own companies.

Two out of three respondents believe their companies’ bottom lines will improve in the next year. Just over 30 percent said things would remain the same, while only 3 percent said they expect their companies to fare worse next year.

To find the silver lining in all of this, AMCHAM and Deloitte invited the Costa Rican who best understands the sky – renowned NASA astronaut Franklin Chang-Díaz, founder and president of the Ad Astra Rocket Company, which has research and development facilities in the northwestern province of Guanacaste.

“When we Ticos decide to do something, we are capable of doing it well and sharing it with the rest of the world. I feel optimistic about the future of this country,” Chang said.

Referring to his own company, the astronaut added: “We have more than 200 Costa Rican investors. Who would have thought that in Costa Rica, people would invest in outer space?”

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Mark Kahle

I find this story and the comments within it to be hilarious….

As a businessman that is engaged in thermal conversion (pirolysis/gasifaction) technologies I have never been asked by the government (after sending them letters and copies of the science) just what my equipment does and does not do, what it is capable of doing or why I feel it is good for the country and what testing has been done, they claim ignorance yet refuse to read the information offered.

They simply placed a moratorium on a fully tested and viable solution for the country and delayed an investment of 30 million dollars that would have been spent outside San Jose in rural areas exactly as Solis says (lip service) he wants.

Obviously the government has NO interest in what they claim…

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Ken Morris

Let’s take both the advice of Eggers and the results of the survey of company managers with a grain of salt.

First, they disagree. Eggers emphasizes human capital, albeit apparently without mentioning where this new and improved workforce will get jobs, while the company managers blast the bureaucracy, corruption, and the electricity rates. They also want better roads.

Second, at least the company managers are now succeeding in an economy that is at best middle-income while running a 10% official unemployment rate and maintaining 20% of the population below poverty. Are these the people we really want to chart the future? Meanwhile, I don’t see anything from Eggers that he wants other than more of the same.

And let’s ignore Solís at the moment. It’s sweet that he wants more equality, but making everyone equally poor is no solution. Somebody has to generate wealth in the first place, and that happens first in cities whether he likes it or not.

Our darling, as usual, may be Chang. For God’s sakes, the only route up is by developing CR businesses. He’s like a voice crying in the wilderness though.

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