Costa Rica has long been considered a leader in foreign investments in technology in Latin America. However, recent announcements from neighboring El Salvador have caused concern among Costa Rican officials and businesses.
President Nayib Bukele’s pledge to eliminate taxes and other burdens on tech companies has sparked interest from international tech firms, potentially luring them away from Costa Rica. The Costa Rican government should take note and re-evaluate its policies to remain competitive in the global market.
One of the biggest challenges facing Costa Rica is the lack of qualified labor in science, technology, engineering, and mathematics (STEM) fields. While the country has made significant strides in education, there is still a need to promote these areas among women and underrepresented communities. Providing access to electronic devices for all social strata can also help bridge the digital divide and create a more diverse workforce.
Another area where Costa Rica needs to focus its attention is the implementation of cutting-edge technology such as 5G networks and artificial intelligence (AI). As more companies move towards automation and digitization, it is imperative that Costa Rica has the infrastructure to support these advances. This will not only attract more foreign investment but also provide new job opportunities for its citizens.
Costa Rica has a sustainable model of development and is limited in its space for agricultural production, which means that it must commit to the technology and services sector to ensure its continued growth.
This sentiment has been echoed by Monica Segnini, president of the Council for the Promotion of Competitiveness. She emphasizes the need to focus on where to direct industrial growth and to consider policies that can attract foreign investment while maintaining the country’s fiscal welfare.
While El Salvador’s plan to eliminate taxes for tech companies may be a wake-up call for Costa Rica, it is important to note that exemptions alone are not the only reason why companies choose a country. The quality of human talent, infrastructure, and economic and political stability are also essential considerations. Costa Rica has historically led in these areas, and it is important to continue investing in them.
The country has already attracted 16% of the world’s leading technology companies to set up operations in the country, according to CINDE. However, initiatives to promote tax exemptions must also seek a balance between benefiting the sector and the country’s fiscal welfare. Companies must use what they save in taxes to create more jobs as a product of their growth.
Costa Rica should not rest on its laurels and must continue to innovate and adapt to remain competitive in the global market. The government must take a holistic approach to create an environment that fosters growth, promotes education in STEM fields, and invests in cutting-edge technology. By doing so, Costa Rica can continue to attract foreign investment in technology and remain a leader in the region.