The Costa Rica Model: Presidential Lessons from a Thriving Nearshore Market at Nexus 2016

Former President Laura Chinchilla explained that, while Costa Rica may be small, it has a large pool of human resources to drive its nearshore success. “Development is not about a nation’s size or wealth,” she said. “Development is all about talent.”

Now in its sixth year, Nearshore Americas’ seminal conference Nexus attracted 150 attendees and close to 20 sponsors to the Le Meridien hotel in San Francisco, the first time this tech-centric city has played host to the event.

Kicking things off to a flying start was a fascinating and insightful keynote speaker, Laura Chinchilla, former President of Costa Rica, who presented her knowledge on the theme of the Costa Rica’s position as a thriving nearshore market.

Chinchilla’s introductory presentation covered a lot of ground, opening with the idea that relations in the entire region of the Americas have faced challenging times as obstacles test the strength of nations’ convictions and the soundness of regulatory measures.

Harnessing the economy as an example, Chinchilla highlighted that the 1990s and the first decade of the 21st century saw the consolidation of macroeconomic and fiscal responsibility in most nations, resulting in overall economic success that translated into social achievements. However, when the financial crisis hit in 2008, the sluggish recovery of the United States and Europe continued to affect most of the rest of the world, pressuring the elite into solving social and political issues and testing the democratic foundation of other nations.

“Despite the many challenges we share, some Latin American nations have advanced considerably in the last couple of decades, addressing the structural factors that have historically hindered our ability to reach and sustain economic growth and ensure the stability of social and political climates,” said Chinchilla.

According to the former president, around 10 Latin American countries are experiencing success in the nearshore industry, with Costa Rica being one of the most prolific. But the key question is how is this small nation putting itself on the nearshore map?

“Development is not about a nation’s size or wealth,” she said. “Development is all about talent.”

In 1948, the country’s administration outlined the roadmap to success through a major decision to abolish the military, instead pouring resources into education. This commitment paved the way for a successful track record in global services, and companies are now realizing the value to be gained from operating in Costa Rica.

“The services sector in Costa Rica accounted for 6.2% of GDP in 2014,” said Chinchilla. “We are now offering more than 75 types of services in English, Spanish, and Portuguese, turning the country into a hub for strategic services with higher value added.”

Costa Rica’s commitment to democracy, human development, peace, equality, renewable energy, education, and healthcare is part of a visionary decision to invest in its citizens and represents a long-time commitment supported by a national consensus. The talent that arises from this environment is driving the success of the country.

“Costa Ricans are people who love people, and the country has the fundamental requirements for succeeding on the world stage for nearshore,” concluded Chinchilla.

After Chinchilla’s presentation, she took a few moments to answer some questions from Nearshore Americas Founder and Director Kirk Laughlin and the audience.

One key topic that arose was the attraction of tax breaks to attract foreign direct investors and the primary concerns that companies have when looking to Costa Rica for a new base of operations. “Political stability, clear rules, legal framework, and signed treaties are more important that tax breaks for foreign investors,” said Chinchilla. “FDI compensates for other kinds of investments in the country and is positively impacting technological and managerial innovation. It also creates high-quality employment, incentivizing a cycle that pushes us to continue growing our strong educational structures.”

Finally, touching upon the strengths of different areas of the country, Chinchilla stressed that the country is investing in infrastructure to improve the poor quality of roads and broadband networks on the Caribbean coast. This investment in the North Caribbean corridor will connect the whole region, facilitating the transportation of goods and greater solidifying Costa Rica as a nearshore champion in Latin America.

Our thank to the article’s author Matt Kendall for his permission to republish this article which originally appeared at: The Costa Rica Model: Presidential Lessons from a Thriving Nearshore Market at Nexus 2016.

Matt Kendall is a freelance business writer operating from within Mexico City. During his editorial career, he has been a technical writer for an ERP software developer, a senior editor for a Mexican publishing company, and a correspondent for a leading digital news agency in Latin America. He now reports on IT and telecommunications in the region, and runs his own editorial consultancy business.

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