Study: Puerto Rico should prioritize AI use to boost key industries

The research emphasizes the island’s need for artificial intelligence infrastructure, workforce development and data capabilities to remain globally competitive.
Puerto Rico should pursue artificial intelligence as a core technology enabler and establish an AI facility or hub focused on data analysis and algorithm development, according to a recent study.
Efforts to enhance the island’s tech infrastructure should target growing industries, specifically the pharmaceutical and aerospace sectors, and foster strategic collaboration between industry and academia, the study, which was sponsored by PR5G Zone and conducted at the University of Michigan’s Stephen M. Ross School of Business, emphasized.
Researchers analyzed the local pharmaceutical, aerospace, telecommunication, financial services and educational services industries, among others, focusing on tech infrastructure, rates of technology adoption, presence of research facilities and case studies, as well as government initiatives and available innovations on the island.
“We wanted to find out which tech sectors would do well in Puerto Rico based on its current resources and assets,” Gail Nolan, certified economic developer and CEO of nonprofit PR5G Zone, told News is my Business.
The study, known as the Multidisciplinary Action Project, identified industries that are positioned for growth, performed a competitive analysis nationally and globally, and determined the technology infrastructure required to serve each industry.
“To be competitive, we need to have infrastructure that matches future technology needs because,” Nolan said.
PR5G Zone is using the study as a playbook for local companies, working with the Puerto Rico Manufacturers Association (PRMA) to determine what investments they need to make in some of those areas. The study also helps companies considering Puerto Rico for investment to identify potential markets.
“You don’t have to pay incentives or lower wages to be competitive. You can increase technology to be more competitive,” Nolan said.
The Multidisciplinary Action Project was the brainchild of Nolan, who came to the island recruited by Invest Puerto Rico as chief strategy officer to identify and target high-tech industries.
“But while we were targeting those industries to attract them to the island, we weren’t really inventorying or paying attention to the types of technology that they would need to be successful, and that’s how the PR5G Zone was born,” she said.
“Companies that agreed to bring their operations to Puerto Rico, if not successful, would become retention targets, and that’s where a lot of incentives are spent, in keeping companies here,” Nolan added.
The study was authored by Dillon Orian, Mouhamed Bseileh, Siddharthan Kannan Ilangovan, Balaji Murali, Sachin Pindolia and Avinash Yella of the University of Michigan, with Dr. John Branch serving as adviser.
PR5G Zone is working on a new project to research the workforce skills — especially micro skills and certifications — required to develop and use the technology industries and companies Puerto Rico will need to remain competitive regionally and globally.
“AI really creates a paradigm shift. There’s going to be a different set of skills that are needed to be able to use the technologies that are emerging,” Nolan said.
“It takes years to get a new curriculum approved and accredited in Puerto Rico. That means the timeline doesn’t work for how rapidly the technology is emerging, so we’re trying to identify skills that can fill the gap until curricula can be adjusted.”
The AI wave
Artificial intelligence, particularly generative AI, is expected to drive the next wave of productivity, adding $2.6 trillion to $4.4 trillion annually across 16 business functions — including customer operations, marketing and sales, software engineering, and research and development — and increasing the overall impact of AI by 15% to 40%, McKinsey recently reported.
In a new analysis, the International Monetary Fund (IMF) examined the potential impact of AI on the global labor market, concluding that nearly 40% of global employment is exposed to AI.
Automation and information technology typically affect routine tasks, but AI can disrupt high-skilled jobs, the IMF reported. In advanced economies, about 60% of jobs may be affected, while in emerging markets and low-income countries, AI exposure may be lower at 40% and 26%, respectively.
“As a result, advanced economies face greater risks from AI — but also more opportunities to leverage its benefits — compared with emerging markets and developing economies,” the IMF said.
AI in Puerto Rico
One of the challenges in pursuing AI as a core tech enabler and establishing an AI facility or hub, as the study recommended, is that AI technology requires a great deal of data and computation.
“We have to dramatically increase our ability to manage large amounts of data on the island in order to have that AI advantage,” Nolan said, noting that low-latency and high-speed computing capabilities are a must.
AI also consumes a lot of energy, and Puerto Rico would need a strong and reliable power grid, something it has been struggling with for decades. Some $83 billion in appropriated Federal Emergency Management Agency funds for Puerto Rico and the U.S. Virgin Islands that have yet to be deployed could be used to tackle this problem.
“That’s why we’re meeting with Pridco (Puerto Rico Industrial Development Company) [to discuss] solutions for deploying those funds, a process that was hindered by the island’s bankruptcy. The island really needs to look into that and use the funds to harden the electrical and technology infrastructure,” Nolan said.