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Costa Rica unveils $35 million program to improve small business competitiveness

September 9, 2014

Costa Rica unveiled this week $35 million in training and educational assistance to improve the competitiveness of small and medium-sized businesses. Science and Technology Minister Gisela Kooper made the announcement Tuesday at Casa Presidencial, adding that the first $1 million would be distributed this year. The news came on the heels of a Hanes Brand Clothing subsidiary closing its operations in Cartago, east of the capital, and laying off 1,250 workers because of more favorable conditions in Vietnam.

The Innovation and Human Capital Program for Competitiveness (PINN) will distribute resources during the next five years, offering small businesses the means to invest in local talent and financing for research and development. PINN will offer grants for postgraduate training in specifics areas including planetary science, new material development and nanotechnology, and biotechnology, among other topics. The program also will offer job training, entrepreneurship mentoring and financing for small businesses to access technology and international certifications.

As the government rolled out its plans to improve Costa Rica’s small-business sector, a large one announced it was leaving the country because of subpar conditions. On Monday, the daily La Nación reported that Cartex Manufactura, a Hanes subsidiary, was closing its operations in Cartago and heading to Vietnam.

Despite Hanes’ exit from Costa Rica, Labor Minister Victor Morales said the PINN program was an example of the next step in the country’s economic development. The minister said that Costa Rica had passed through the textile industry as a phase, and the industry had been trickling out of Costa Rica for years. La Nación reported that 10,000 jobs in the textile industry left the country in the last six years.

“They’ve been leaving gradually for other countries with other conditions. I believe that the [PINN] presentation we’ve seen today is what we should be striving for, more businesses like these. This is our future,” Morales said.

Obviously, the minister said, the government would prefer that no businesses left Costa Rica.

“Our promise to the private sector is to do everything we can to keep jobs here that are already here and create new ones while reducing informality,” he said.

President Luis Guillermo Solís’ administration has highlighted investment in small and medium-sized businesses a a key part of the government’s plan to build up the domestic economy. On Sept. 3, the World Economic Forum ranked Costa Rica the third most “competitive” country in Latin America, after Chile and Panama. The country came in at 51st out of the 144 surveyed in the annual assessment.

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