Get to Know the Labor Force in Costa Rica
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The Central American Group: Hello. Welcome to another installation in the Central American Group’s series of podcasts. We speak with experts that are both internal and external to the organization about topics that are germane with regard to doing business in Costa Rica, El Salvador, and the rest of Central America. Today, we have Vanessa Gibson with us. She is with Costa Rica’s national investment promotion agency. It’s called CINDE. She is the Manager of Investment Climate there and today we will have a discussion about the labor force in Costa Rica.
I want to welcome you, Vanessa. If you could tell our audience a little bit about yourself and your organization, we would appreciate that.
Vanessa Gibson: Thank you very much. It is great to be here. Thank you for the space and the opportunity. I would like to wish everyone a Happy New Year. CINDE is Costa Rica’s industrial promotion agency. We have been around for over 35 years now. Basically, today, we dedicate our self to promoting Costa Rica abroad to tell businesses that Costa Rica is the right location for companies.
We have been growing the footprint of companies in Costa Rica over the course of these years. Today, we account for over 300 multinational firms in specific industries that have been building up the economic development of the country. They are mostly in the services industry, but we also have companies involved in advanced manufacturing, light manufacturing, and the food industry. Finally, a major player in the country in terms of manufacturing is the medical device industry. Medical devices are the main export of Costa Rica.
In my case, I have the opportunity to work in this amazing organization supporting companies by working to create a good investment climate. This means understanding and projecting how Costa Rica will remain competitive for the companies that have a footprint here. We also try to see the future in terms of the investment climate for new generations of businesses that will locate operations in Costa Rica.
The Central American Group: Thanks a lot for that summary of your qualifications, your position, and your organization. I just want to say up front, congratulations.
I received an article in my email a few days ago that reported that USA Today listed the top countries in the world for businesses to locate facilities and Costa Rica was named as the third best place on the planet to receive investments. So, I guess that you are doing a good job.
Vanessa Gibson: Yes, but we are actually working continue to improve the investment climate in Costa Rica because the direct of foreign investment has paid off in terms of improving the quality life of the labor force in Costa Rica, as well as for the rest of the citizens in the country.
The Central American Group: One of the things that you have mentioned is especially interesting. It is how Costa Rica has developed over the last two decades, or so, in terms of its Life Sciences and Medical Device manufacturing sector. What we want to focus on today is the labor force in Costa Rica. Obviously, this is high value-added manufacturing and you have to have the workforce that is capable of performing the operations that this industry demands.
Investors have different reasons for why they choose to establish operations in Costa Rica. Why does CINDE usually mention the labor force in Costa Rica as a key piece of the investment equation?
Vanessa Gibson: Well, thank you for the question because it directly addresses to a core goal that we have as a country. We mentioned several reasons why Costa Rica is a good place to invest, but the main reason that differentiates us in the worldwide competition for investment is the quality and the talent found in the labor force in Costa Rica. Costa Rica has over 200 years of being a country that has decided to dedicate much of its resources to two main areas: health and education. By our constitution we dedicate almost 11% of our GDP to health and 8% of GDP by law to education.
Over time, what we are seeing is the benefits that come from improving the educational system and building up a platform nationwide where people have access to free education almost up to university. This is because there is a well establish social base for individuals to be sponsored in the education system even up to the University level. From that targeting now we are able to attract high level investment that uses sophisticated processes to Costa Rica that improves the welfare of the country.
Companies that choose Costa Rica normally choose it because of the available talent, the education level, and, even beyond that, the potential for the workforce in Costa Rica to be able to adapt itself to the digital transformation in the world economy. We are seeing more and more companies choosing the country based on the availability of talent.
The Central American Group: Given the quality talent, how has the Costa Rican labor force evolved over the years with respect to the knowledge economy that we are seeing emerge?
Vanessa Gibson: I would say that there has been a significant transformation that we are seeing and experiencing in the last 10 years. As you know, we are in the middle of Central America and we meet a world standard even for individuals, even in kindergarten, to become bilingual. This will greatly affect the labor force in Costa Rica and will bring about a deep transformation in the country.
There is now a foundation for our country to become a fully bilingual society in the next two decades. This will enhance our global opportunities. So, I think that language capabilities will be one of the first areas that we will tackle. The other one is strengthening the labor force in Costa Rica and our economic base in terms, not just by strengthening existing businesses, but, also, by building skills that are in line with the transformations taking place in the fourth industrial revolution.
To do this we are working with local educational institutions and making efforts to attract strategic partners from other countries that are bringing content and expertise to train and to educate our population. We have strong relations with Georgia Tech, Arizona State University, and the University of Minnesota. These entities are working hand in hand with local entities to develop master’s degrees programs and other specializations to help develop the workforce. Additionally, companies themselves are offering the labor force in Costa Rica specialized training to improve and increase the skill sets of the country’s pool of workers. This has become a very interesting opportunity for the country.
The Central American Group: I am looking at some numbers and they are pretty impressive. For instance, last December, Costa Rica announced a record of 16,718 jobs that were created through the capture of foreign direct investment. What do you attribute this good performance to?
Vanessa Gibson: It is a safe bet that companies are making in the country. The evolution of foreign direct investment is quite is quite slow. When you attract a company, they start with only a few jobs and low impact processes. They have to test the waters. What we are seeing is that it takes two or three years for a company to really get up and going. We see this as an opportunity whereby the society will benefit from this business growth in the private sector. We must, however, continue to enhance the quality of the labor force in Costa Rica so that we can bring more sophistication to the country in terms of training.
The Central American Group: One of the other things that is interesting in terms of the statistics that you forwarded to me is the fact that, out of the jobs in the Costa Rican labor force that have been created by foreign direct investment in 2019, 50% of these jobs were created by women-owned companies. To what do you attribute the attraction of this volume of women-owned companies to Costa Rica to?
Vanessa Gibson: Actually, the growth of industries such as medical devices this is significant. What we have seen is that these companies that are led by women require, in turn, skill sets that women in the labor force in Costa Rica have. Over 60% of the operations in the Costa Rican medical device industry are performed by women. This is a huge impact and a huge benefit that the country is really taking advantage of. There are so many women headed households that need employment in order to take care of their families. The medical device industry plays a key role in generating quality jobs for these individuals in the labor force in Costa Rica.
The Central American Group: Another thing that is impressive is that, over the last 20 years, employment has grown in life sciences and in the medical device sector. During this time, the sector multiplied itself by a factor of 62.
What has been the source of such growth in this particular industry?
Vanessa Gibson: In the service sector, because its is comprised of knowledge industries, is the area in which we have seen the most growth. The companies that have arrived to employ the labor force in Costa Rica are not only finding multilingual workers, but also are finding a diverse talent pool.
Fifteen years ago, there were very few foreign companies in the service sector in Costa Rica that generated less than 1,000 jobs. Today we have over 180 companies that have invested that are providing services in Costa Rica in five different languages. Obviously, English is the primary language that is required. Portuguese, French, and, even, German are language skills that are available in the labor force in Costa Rica.
In the case of the medical device industry, as we mentioned earlier, it is a thriving sector for us that is growing at a very fast pace. It is more capital intensive. The increase of foreign direct investment in this area has resulted in job growth in Costa Rica.
The Central American Group: You mentioned an emphasis on the learning of English as a second language in Costa Rica. From what I understand the project aimed at addressing this has the acronym ABI. Can you tell us more about that?
Vanessa Gibson: Certainly. ABI stands for the bilingual alliance that the current government put in place during the first year of their administration. To do this was a decision that has strategy and vision. The program centers on building an alliance that will center around the dame goal of making Costa Rica a bilingual country.
There are a number of efforts being conducted by companies and the government that are being sponsored throughout the country. These are programs which are providing English instruction for free. In the case of CINDE, we are one of the first to partner with ABI. We are currently running a program in which over 2,500 individuals are participating at different places across the country. These people will receive over a year of training from professors that are native speakers from Canada, the US, and, even, Australia.
The Central American Group: It sounds as though you are putting a strong emphasis on that. This effort will certainly add to your ability to continue to attract industry to Costa Rica.
Vanessa Gibson: Definitely. We understand that the global knowledge economy is one that will have no borders. So, the labor force in Costa Rica will not have to communicate with their colleagues in Costa Rica but will also have the opportunity to represent the company in the worldwide market.
The Central American Group: Where does your organization, CINDE, see Costa Rica in the next five years in terms of its ability to attract foreign direct investment? What will be the characteristics of the labor force in Costa Rica?
Vanessa Gibson: I think that we can envision Costa Rica in the midst of the transformation that is taking place in global markets. The global economy will present a great opportunity for our country in the areas in which we are growing, so far. We will have a well-educated labor force that can work with the technologies that will enable Costa Ricans to have job with a company anywhere in the world. We will reap the benefits of our workers labors in the global market.
We are seeing the opportunity, as well, to foster the growth of innovation in Costa Rica as knowledge-based companies arrive in the country. Workers will be trained and transformed by these companies.
The Central American Group: One of the things that we like to do is to promote the organizations of people like yourself that are kind enough to speak with us. It is our understanding that your organization will be at the MD&M West medical device trade show in Anaheim this coming February.
If you could tell us how folks that are in attendance can speak to you it will be a great help. How would they go about finding you?
Vanessa Gibson: We will be listed in the program. We always try to set up at a location in the hall that is a good one. Staff members of CINDE will be there for the entire event and will be available to have one-on-one meetings with companies that would like to have more detail on what Costa Rica has to offer to business that are looking for a place in which to invest.
We are very excited, and we hope that we will have a lot of people that will want to sit down with us to hear about Costa Rica.
The Central American Group: The last thing that we always like to do is to try to make the people that are kind enough to speak with us available to our listening audience for questions. So, if after listening to this, an individual has a question for you, how would he or she be able to get in touch?
Vanessa Gibson: It would be a pleasure to build our network. The CINDE website is www.cinde.org. A lot of information that is related to what we have discussed on the podcast is available there. My address is firstname.lastname@example.org.
The Central American Group: Vanessa, thanks again for joining us on this podcast. We wish you all the best of luck in the coming months of 2020.
Vanessa Gibson: All the best for everyone, yourself and all of your audience.
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