While Puerto Rico’s competitive capacity depends mostly on its capacity to innovate, the island faces great challenges in education and infrastructure — areas that require immediate attention to position it favorably against other global economies.
Such were the conclusions offered Wednesday by local public and private sector representatives in response to the results revealed in the 2013-2014 edition of the World Economic Forum’s “Global Competitiveness Report.” Puerto Rico landed in 30th place among 148 countries around the globe, as this media outlet reported.
“For Puerto Rico to advance its global positioning, we must focus and work to close the existing socioeconomic gap and increase our productivity,” said Francisco Montalvo-Fiol, director of the International Competitiveness Institute at the Inter American University, which, along with Puerto Rico 2000, coordinate the information provided to the WEF from local sources.
Puerto Rico fared well in certain key areas that the index measures, such as financial market development (18 out of 148), labor market efficiency (38), innovation (24) and business sophistication (19), placing among the world’s 37 “innovation-driven technologies” according to the report.
“Although the island’s innovation potential helps keep its ranking despite its infrastructure and education challenges, Puerto Rico must embark on a multi-sectoral effort to position itself advantageously in the global level,” said Francisco García, president of Puerto Rico 2000
This year, the executives surveyed in Puerto Rico indicated strong pessimism in their economic outlook, which is the lowest reported factor for the island (122). Puerto Rico’s economy presents a number of “problematic factors” for doing business, such as inefficient government bureaucracy, restrictive labor regulations, access to financing and insufficient capacity to innovate.
‘If operating costs were factored, P.R. would rank lower’
“Our island has spent years in an economic downturn, receiving the brunt of increases in operating costs, which presents a difficult prospect,” said Puerto Rico Manufacturers Association President Waleska Rivera, reacting to the study’s outcome.
“We’re not surprised that government bureaucracy, restrictive labor regulations and access to finance continue to negatively impact the island’s competitive position,” she said. “The island’s worrisome brain drain is also reflected in the report and the institutional sector continues to show a negative perception (72).”
On the other hand, she said the PRMA is pleased that Puerto Rico’s innovative capacity is presented in the report as one of the elements sustaining the island’s competitive stability in the face of ongoing global economic uncertainty.
“It’s important to note that operating costs are not evaluated in this study. If that were so, we are confident that our position would be much lower on the scale,” she said.
Meanwhile, the government, through the Department of Economic Development and Commerce, expressed satisfaction over the results, saying the goal is to have Puerto Rico hold on to its ranking, or improve it through a structured economic development strategy that addresses they key competitive indicators — infrastructure, macroeconomic environment, and market scope.
“Puerto Rico’s global competitiveness should be a priority for everyone, not just for those who work in government, but for all Puerto Ricans,” Economic Development and Commerce Secretary Alberto Bacó said. “Being competitive translates into benefits for our people and for the local industry. But more importantly, competitiveness is a way of creating jobs and a self-sustaining economy.”