An opportunity for Puerto Rico Economy
On a small island as Puerto Rico, the lack of raw materials and expensive transportation limits the industry growth. For this reason, big companies such as Walmart, Tesla, and Apple are hard to create from Puerto Rico. Software companies have been growing since the 2000’s to the point that they have reached the top stock market status. Incredible that in 2021 the Caribbean Business top 200 locally owned companies do not have a single software company.
Software companies have their advantages; 1) do not require raw materials, and 2) their distribution it’s almost free because of the internet. Software company’s “raw materials” are disruptive ideas and computational education. Unlike oil, gas, and gold, ideas can grow in any part of Earth. Similarly, computer science can be learned from any part of the world, thanks to the internet. Most software services companies do not require a significant investment initially, but it’s crucial to be disruptive enough to compete globally.
The competition is brutal, especially in regions like Silicon Valley, Shenzhen, and Bengaluru because of its highly developed computational education. But still, Puerto Rican companies had the advantage to tackle unique local niche problems. They are the only ones that can create adequate solutions to the needs of this local niche and then expand to other regions with similar issues. On the other hand, another strategy is researching and developing technologies to obtain an advantage over other companies in the world. Ideas with emerging technologies such as quantum computing, bioinformatics, and artificial intelligence could give market advantages through patents and the commercialization of these advances.
It is no secret that universities with excellent computer science and engineering programs have been very influential since the beginning of Silicon Valley. Higher education and research advances helped create the technology in companies like Apple, Google, Netflix, etc. For example, the PageRank search algorithm was developed as part of research at Stanford University by the founders of Google. Similarly, Puerto Rico has the potential to follow in the footsteps of Silicon Valley if it invests in its education to develop sufficient intellectual capital to develop a thriving software industry.
In conclusion, the software industry is ideal for Puerto Rico because it does not require raw materials or high transportation costs. Although the competition is global, Puerto Rico has two advantages 1) taking advantage of the local niche and 2) developing new technologies. This last strategy requires investing in education to include programs focused on computer science at all levels to increase the number of local companies in the software area. And who knows, maybe we will have our first unicorn (companies valued at or more than 1 Billion dollars) in a short time.