by ADAM BRUNS adam.bruns@siteselection.com INVESTMENT REPORT COSTA RICA200 YEARS OLD THIS YEAR, COSTA RICA LEADS THE WAY TOWARD THE FOURTH INDUSTRIAL REVOLUTION W hen I asked Holly Sullivan, head of worldwide economic development for Amazon, about places outside the U.S. where the company was looking to ramp up growth, she listed half a dozen places in the world. Costa Rica was one of them. “How we’re making those decisions is working backwards from the customer,” she said. “Where do we need to continue to double down on that talent opportunity and double down on innovation to exceed our customer expectations?” Amazon is on its way to employing thousands in locations across Costa Rica, with half of management positions fi lled by women, and over , employees working % from home outside the San José metro area. It’s followed up with the news that Amazon Web Services will open a new offi ce in San José to support the rapid adoption of cloud computing across Costa Rica. e e-commerce giant is not alone in its desire to grow innovation and exceed customer expectations. It’s also not alone in choosing Costa Rica as a place to achieve those goals. In its Impact Report, released this spring, CINDE — the Costa Rican Investment Promotion Agency — announced its fi fth straight record year for job creation, having welcomed , new jobs from investors such as AstraZeneca, IBM and Samtec. ose jobs arrived via projects, of which were fi rst-time Costa Rica investors. at means repeat investors. Among the sources of job growth are Coca- Cola and Sykes in the Northern Pacifi c region; Firestone in Turrialba; Del Monte in the Southern Region; Panduit in the Western Region; and Yellow Pallets, Cocojo and APM Terminals in the Atlantic. e companies’ countries of origin span the globe: Of the new entries, of them came from non-traditional origins representing diff erent countries such as Japan, Denmark, France, Germany, India, the UK and Bosnia and Herzegovina. ose investors are likely to stick around and grow for a while: e companies supported by CINDE have seen continuous employment growth that in reached , jobs, with more than , of them in services, and , jobs in the fast-growing life sciences sector. “Over the years, Costa Rica has become the destination par excellence for nearshoring,” said CINDE Managing Director Jorge Sequeira, noting that manufacturing didn’t skip a beat either. “Our position was reaffi rmed during the pandemic thanks to a joint public-private eff ort that INTRODUCTION 56 MAY 2021 SITE SELECTION Photo: Getty Images SITE SELECTION led to an agile and effi cient response to ensure business continuity. e country’s connectivity platform was put to the test and % of service companies showed that they were able to operate % remotely within a matter of days — while still enjoying the benefi ts of the free trade zone.” at amounted to , people working from home. e ability to do that was helped by a modern legal framework that allowed remote work implementation across multinational companies in a record time, and increased mobile penetration reached % with % being smart phones which is above the U.S. penetration rate. Fiber optics also grew % between and . Costa Rica also was able to ensure business continuity and avoid business disruption. is response capability was headed by the Ministry of Foreign Trade, Procomer and CINDE through bi-weekly roundtables headed personally by the Minister together with over business chambers to address challenges, provide clear information and collaborate with solutions, a true private-public focus. “Assurance of this business continuity with a clear rule of law and openness to trade demonstrated multinationals’ trust in Costa Rica as their strategic partner for the new nearshoring,” said Eric Scharf, President of the Board of Directors at CINDE. Multinationals obviously are buying what Costa Rica’s selling when it comes to FDI attraction. It comes full circle when you examine what the entire world is buying from the land of Pura Vida. According to PROCOMER, Costa Rica closed with more than $. billion in goods exports, up % over for a new record, even as exports around the world dropped by .%. Leading the way were an % jump in precision and medical equipment exports (which represented % of exported goods), a % increase in exports of corporate services and a % increase in ITC services exports. Meeting Corporate SDG Goals e nation’s success isn’t measured in numbers alone. In addition to being saluted among the Global Best to Invest investment promotion agencies in this publication for several years CINDE was also voted the world’s best IPA by the International Trade Centre’s comparative evaluation model, and received special recognition from the United Nations for mainstreaming gender in investment promotion. Equality is one of elements within Costa Rica´s diff erentiation approach to investment based on “People, Planet, Prosperity” — and its impact to contribute to the corporations’ ESG goals. CINDE’s results reinforce Costa Rica’s contribution and compliance with the global Sustainable Development Goals (SDGs) established by the United Nations, and CINDE reports its results’ impact on four main SDGs: Decent Work; Gender Equality; Industry, Innovation and Infrastructure; and Quality Education. “Costa Rica’s commitment to sustainability is our fl agship to develop the right conditions for multinational companies that are looking to invest with purpose,” says Jorge Sequeira. No wonder more than members of RE, an international initiative that brings together more than infl uential businesses committed to % renewable energy, have invested in Costa Rica. In approving in March a $. billion arrangement to support Costa Rica’s recovery and stabilization from the economic damage caused by the COVID- pandemic, the International Monetary Fund talked to Costa Rica President Carlos Alvarado Quesada about innovation and climate change mitigation being part of the country’s new economic program. “Boosting productivity requires setting the right conditions for domestic companies to thrive, improving the regulatory framework, and reinforcing our commitment to trade and foreign direct investment, to help companies integrate in global value chains,” the president said. “Competitiveness will also be boosted by stimulating innovation, including among small and medium-sized enterprises, and by reducing infrastructure bottlenecks. We will rely on public-private partnerships to rapidly increase the quality of our road network, and we will also strengthen our digital infrastructure.” But in Costa Rica — as many say in the U.S. — it’s human infrastructure that will prove to be the strongest girder for prosperity. “ ere is an increasing demand for professionals in services, science and technology globally that academic institutions are not managing to fulfi ll,” the president told the IMF. “We recently approved legislation to strengthen and modernize the National Institute of Learning, so as to better prepare for the fourth industrial revolution. It couldn’t come at a better time, as this year, on September , Costa Rica will celebrate the bicentennial of its independence. e recent success and forthcoming growth spotlighted in the following pages will make that celebration all the sweeter. Adam Bruns Managing Editor, Site Selection magazine Free Trade Zones purchased $2.3 billion locally in 2019, up from $1.5 billion in 2015, gaining greater effi ciencies in supply.60 MAY 2021 SITE SELECTION LIFE SCIENCES HEALTHY PORTFOLIO: AN ARRAY OF LIFE SCIENCES COMPANIES FIND COSTA RICA TO BE A TRUE ‘LIFE-CENTERED’ HUB I f you’re looking for trends in inward investment by major employers, it can help to look at what’s being shipped outward. When Costa Rican export fi gures for January were released, they showed healthy diversifi cation by sector and by destination regions. ey also showed continuing growth in life sciences, with precision and medical equipment accounting for % of all exports, and showing a % rise in value over the previous January. Leading the way in the growth are prosthetics for medical use, catheters and other devices. But big pharma is engaged too: AstraZeneca recently inaugurated its new head offi ce in Costa Rica following a US$ million investment. e corporation announced that it would add new positions in , for a total of . Also amidst the pandemic, Roche doubled its operation in the country to reach people. e Roche team provides end-to-end integral and strategic solutions to the Roche Pharmaceutical and Diagnostic divisions all over the Americas in areas such as fi nance, People & Culture (previously human resources), purchasing and IT. “It excites us a great deal to announce the expansion of our People Support Solutions area that only joined our operations in May ,” said Héctor Feliú, general manager of Roche Services & Solutions, at the announcement in March . “We reaffi rm that talent is the greatest driving force for growth that makes it possible for us to continue off ering high-value-added services that are increasingly sophisticated and that make our portfolio robust. All this results in and contributes to our global purpose of improving the quality of life for patients around the world from Costa Rica.” e jobs are not direct life sciences jobs, but they are jobs for a life sciences leader. And they’re directly about life: Roche extols the diversity and inclusion of its team, with over diff erent 62 MAY 2021 SITE SELECTION nationalities. Additionally, more than % of the employees are older than , and women occupy % of the leadership positions. ese companies’ reasons are many, but they might be best summed up by the slogan of one of the growing companies themselves, Viant: “ e Perfect Combination: Big-Company Resources. Small-Company Attention.” In Costa Rica, you get big-time talent in a friendly, community-centered environment. Massachusetts-based medical device company Viant in April announced it had completed a major expansion of its manufacturing facility in a free trade zone in Heredia, adding cleanroom molding and assembly space and repurposing other space to introduce new molding capabilities to the liquid silicone rubber molding capability added in . e expansion will add up to jobs in Heredia by the end of . Also in April, orthodontic medical device company Byte announced it will hire more people in Costa Rica due to the growth of the local operation. at will add to a workforce of that started as just four people less than two years ago in June . “Costa Rica has a very attractive talent pool in this industry,” said Pablo Rojas, general manager of Byte. “Additionally, there is an interest of people to get involved in projects based on innovation, with diff erent work schemes, organization, opportunities and inclusion, not only for those who participate within the company, but for those who are providing a service, there is a lot of interest for learning and making a diff erence.” In March, Viatris, created by the merger of Upjohn and Mylan in and now the sixth largest pharma company in the world with more than , employees, announced a $. million investment to launch operations in Costa Rica at a new regional HQ. “We are standard-bearers of public health, and Costa Rica, a country with a global and supportive health system, such as the Caja Costarricense de Seguro Social, and with fi rst-level public health indexes, is the natural choice for a company like Viatris,” said Patrick Doyle, Viatris leader for LATAM. “As standard bearers of accessible health, collaboration and leadership, we found in your country a like-minded ally.” Mid-market medical device contract manufacturer Biomerics in February announced the doubling of its manufacturing footprint at the Zeta Free Zone in Cartago. e expansion is via a new, ,-sq.-ft. (,-sq.-m.) greenfi eld plant adjacent to Biomerics current operations, and includes extrusion, injection molding, micro metal processing, and cleanroom assembly process. Biomerics currently employs people at a smaller facility focused on extrusion, laser processing, high volume assembly and packaging. e expansion is in support of active transfer programs with strategic customers and is expected to double the number of Costa Rican employees over the next three years. “ is expansion is in line with our vision to be the leading interventional contract manufacturer,” said Travis Sessions, Biomerics CEO. “Customers have requested that we build a vertically integrated operation in Costa Rica to provide cost-eff ective, high-volume manufacturing for the interventional market.” MicroVention Makes Major Investment Among the biggest investors of all, however, is U.S.-Japanese company MicroVention-Terumo, which is investing $ million to construct a new ,-sq.-m. (,-sq.-ft.) plant in the Coyol Free Zone in Alajuela that will create , new jobs. e project is recognized by Site Selection as one of the Top International Deals of . e company, whose U.S. operations have also been expanding to a new headquarters in California, fi rst launched operations in Costa Rica in , and already employs , at two manufacturing plants dedicated to creating medical devices used in endovascular therapies for the treatment of vascular and brain diseases. “Microvention began operations in Costa Rica more than seven years ago and has recognized the great potential of our family of workers and managers, as well as manufacturing associates,” We reaffi rm that talent is the greatest driving force for growth that makes it possible for us to continue off ering high-value-added services that are increasingly sophisticated and that make our portfolio robust.” — Héctor Feliú, GM, Roche Services & Solutions, at the company’s March 2021 expansion announcement in San José We reaffi rm that talent is the greatest Next >