Technology firms, life sciences, services and green technology are transforming a country with a young and ambitious population
A country of only 4.8 million, Costa Rica is already the third largest exporter of services in Latin America in overall dollars, just behind Brazil and Argentina, and the #1 per capita.
Costa Rica’s lush natural environment has long captivated the minds of the most adventurous tourists, but the country’s business environment is also drawing attention across different industries. The green country is now also the high-tech nation, where a young population with high quality training participates in an increasingly sophisticated and innovation-oriented economy.
Today, more than 300 multinational manufacturing and services companies have found the country to be a suitable home for their many ventures. Medical and pharmaceutical industries, biotechnology and food research and innovation have taken on a key role in redefining Costa Rica as the country cements its status as a regional hub for multinational companies and foreign investment.
Since Intel established a microprocessor plant in Costa Rica, in 1997, dozens of technology firms became interested in investing in this Latin American nation. Intel’s successful local branch helped transform the country’s economy, quickly becoming a magnet for further foreign direct investment and would motivate countless students of technology to strive for similar jobs.
Much changed in the following years, as Intel’s push, aided by Costa Rica’s robust and universal education system, saw a generation of engineers and specialists find fertile ground. The country has a growing number of well-educated, high-skilled, and bilingual IT professionals, many of whom are finding work in companies such as IBM, Microsoft, Amazon and Cisco Oracle, now anchored there.
As the country’s economy quickly matures, increased sophistication has made the services sector exports a leading engine. Multinational companies grow rapidly in Costa Rica, as foreign direct investment has grown on average 4.6% since 2006.
By 2014, Intel had decided to transform its local plant and take its less complex manufacturing processes closer to its Asian clients, but had ushered in a new age in Costa Rica’s possibilities for growth. A few months later, Intel set up a “Mega Lab” in Costa Rica for a new generation of microchip development, the only one of its kind outside of the United States, which currently employs over 2000 people in Costa Rica. That figure includes some 900 engineers dedicated to testing processes and innovation.
Growing potential for innovation
Costa Rica’s health and education advantages combined have helped it continue escalating in international rankings. The Global Competitiveness Report 2017-2018, published by the World Economic Forum, ranks Costa Rica 47th amongst 137 nations surveyed, making it the second most competitive country in Latin America, just behind Chile and ahead of regional juggernauts such as Brazil, Argentina, Mexico and Colombia.
Further investment in artificial intelligence and other high-tech areas are booming in its extensive Free Zones and industrial parks. An aggressive campaign by the Costa Rican Investment Promotion Agency (CINDE), a private, non-profit organization, attracts significant investment and has generated over 90,000 jobs, according to its general director, Jorge Sequeira.
Services exports have grown fivefold since 2000, reaching over $4.812 million in 2016, according to official data by the Central Bank of Costa Rica “In the case of the services sector in the year 2000 there were six companies installed and at the end of 2016 there were 147, 25 times more companies”, Sequeira says. Furthermore, Costa Rica’s average output per employee has grown 57% in the last decade, going from $35,000 to $55,000 per employee in the services sector, according to CINDE.
In this way, Costa Rica has taken the lead over other Latin American nations, being able to transform its exports economy from an agribusiness sector based on four products by the 1980’s to a roster of 4302 different products sold to 150 countries, including industrial manufacturing and ICT services, according to statistics by Procomer, the country’s foreign trade promoter.
A country of only 4.8 million, Costa Rica is already the third largest exporter of services in Latin America in overall dollars, just behind Brazil and Argentina, and the #1 per capita. Total exports of the country account for $18.5 billion, according to Central Bank estimates.
Such success is possible “thanks to its robust commercial platform, built through trade agreements”, Sequeira says, pointing out that the country thus has access to a market of over 2.5 billion people including free trade with the EU and EFTA countries.
Medical technology assumes a leading role
Of the many commercial ventures making Costa Rica its home, it is medical sciences that have confirmed the country’s unique position as a hub for innovation. It is the country’s top industrial export, worth over $2.500 million in 2016, according to CINDE. Over 70 medtech companies have settled there over the past decade.
“In the case of life sciences the number of companies increased from eight to 70, registering nine times more the number of companies installed”, says Jorge Sequeira. “Medical devices have become the number one industrial export”.
6 of the 10 most important companies in the field of cardiovascular devices, now the country’s top industrial export good, have established operations for manufacturing, services or R&D in Costa Rica. Companies in the life sciences sector now represent over 21,000 jobs, according to CINDE, and the country is the second largest exporter of medical devices in Latin America.
This commitment to the medical industry has strengthened the country's commercial ties with some European nations that serve as a bridge for international markets, such as Belgium, the United Kingdom and the Netherlands.
Exports of different medical devices to the European Union reached some $508 million in 2016 alone and 7 of the top 15 companies exporting to the EU are from the medical sector. Total life sciences exports from Costa Rica neared $2.500 million in 2016.
The medical industries’ results seem even more impressive considering their quick sophistication and reach to global markets. Cardiovascular devices make up 10% of medical products exports, but dental, endoscopy, medication delivery systems and aesthetic products are also building up a stronghold in Costa Rica. A bright future seems to lie ahead for a large Costa Rican cluster of medical technology companies.
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Procomer is a public institution devoted entirely to international trade; responsible for overseeing Costa Rica’s export programs, supporting the ministry of Foreign Commerce (COMEX) and promoting and protecting the country’s commercial global position.
CINDE is a private, non-profit, non-political organization declared of public interest in 1984, responsible for the attraction of Foreign Direct Investment (FDI) into Costa Rica.