Business leaders list opportunities for ‘manufacturing of the future’
As part of the activities to mark “Manufacturing Week 2021” locally and in the US mainland, Puerto Rico Manufacturing Extension Inc. (PRiMEX), held a round table with business leaders, who discussed the opportunities and how the manufacturing of the future will be built.
Leaders agreed that Puerto Rico needs to maintain the existing manufacturing industry, grow local entrepreneurship, and attract multinational investment. It also needs to strike collaborative agreements looking ahead.
Among the topics discussed during the meeting were the development of the workforce, how Puerto Rico competes with other countries, the use of technology as a critical tool, and the multinational industry’s fiscal challenges.
Manufacturing has played a fundamental role in Puerto Rico’s economic evolution in the past six decades. In 2019, the sector was responsible for generating about $2 billion in revenue collections for the government under Law 154. The sector generated 74,000 direct jobs, with an average salary of $39,000, and generated about 136,000 indirect jobs.
Economist José Joaquín Villamil, said manufacturing will continue to be a key sector in Puerto Rico’s future development, but it “will be a very different manufacturing, in keeping with the global trends that are already emerging.”
For example, production of intangible goods will increase, blurring the dividing line between manufacturing and advanced services; New manufacturing companies emerge around technologies, such as Tesla and many others, and this trend will not change.
That trend “is very important because these new companies do not respond to the demand in the market but create it,” he said.
Companies in the future will characterized for “being highly mobile and by located practically anywhere, which has allowed a greater dispersion of industrial production and has generated the movement for North American multinational companies to return to the American territory and with it, their production processes.”
The organization of production will be fragmented and will require integration of processes carried out in companies located in different jurisdictions, he said.
Horizontal integration, outsourcing or subcontracting will replace the vertical integration characteristic of traditional manufacturing.
“The very short useful life of products and technologies requires companies the flexibility to act with agility to face changes in technology,” said Villamil.
Meanwhile, Department of Economic Development and Commerce (DDEC, in Spanish) Secretary Manuel Cidre said Puerto Rico’s workforce is world-class in most sectors of the economy such as: Medical devices, pharmaceuticals and aerospace, among others.
“Puerto Rico is among the best on the planet, not only because of its human resources, but also because of the stability and security of the financial and legal system, in large part because of the island’s relationship as a territory of the United States. However, we’re aware that technology is changing, and we need to adapt and create strategies to continue developing that workforce,” he said.
Rodrick Miller, CEO of Invest Puerto Rico, said collaborations with organizations such as PRiMEX result in strategies “not only to attract advanced manufacturing to Puerto Rico, but also to strengthen the existing ecosystem through access to information, knowledge, and global market trends.”
“The purpose of these efforts is to increase the island’s capacity to respond to emerging needs and changes, in addition to improving our competitiveness as an investment destination,” Miller said.
Meanwhile, PRiMEX Executive Director Ramón Vega-Alejandro said considering Puerto Rico’s new reality post hurricanes, earthquakes, and the COVID-19 pandemic, “it’s key that companies adapt and prepare with new skills to refocus on how to develop human resource talent, strengthen their ability to participate in e-commerce, invest in advanced technology and innovate products, processes, services and business models.”
“Effective leadership plays an important role in transforming companies with greater resilience for the future, creating a culture of innovation and adopting advanced technologies,” he said.
Finally, Bettina Mercado, founder of Bettina Cosmetics, listed the challenges that small businesses have in the manufacturing sector, namely that loose cargo shipments face tough conditions to secure space in the containers, costs for shipping to the island — which have increased dramatically in recent months, affecting the competitiveness of the products.