Puerto Rico was the last connection point of the world’s first submarine cable system (Submarine Cable AMX-1), specifically designed for 100GB per second transmissions.

Expansion Management: Puerto Rico -- Supplying Today's Talent and Growing Tomorrow's

Aug. 11, 2014
"We have a compelling value proposition in Puerto Rico," explains Gene Purschwitz, General Manager of Microsoft Operations Puerto Rico. "We have access to a talented, skilled, educated labor pool; all ingredients for growth."

In manufacturing, talent is king. Locating employees, attracting them to your company, training them in hopes they will stay and then finding others that can meet ever changing needs is the goal.

Microsoft found all of this in Puerto Rico.

“We have a compelling value proposition in Puerto Rico,” explains Gene Purschwitz, General Manager of Microsoft Operations Puerto Rico. “We have access to a talented, skilled, educated labor pool; all ingredients for growth.”

Growth is exactly what’s happening to Microsoft’s business in Puerto Rico.

However the growth that is taking place isn’t exactly what was predicted. In 2006, the facility was opened with the capacity to manufacture 80 million products -- CD and DVDs for Office and then Vista products. But only 14 million were sold since customers prefer to receive information in a digital format.  So a new business segment was created which provides digital downloads via a server farm.

An interesting twist on the adaptability of this location is that due to their expertise and success in serving the North American market in the manufacturing of the CD/DVD, they are trying to consolidate all manufacturing of these products across the company at this location.

"We have access to a talented, skilled, educated labor pool; all ingredients for growth,” says Gene Purschwitz, senior director, Microsoft, Puerto Rico.

Technical talent is a hallmark of this island.  “Puerto Rico is one of the few places that exports scientists and engineers to the U.S.,” explains Antonio L. Medina Comas, executive director of The Puerto Rico Industrial Development Company.

In fact The World Economic Forum’s 2012-2013 Competitiveness Report ranked Puerto 3 out of 142 countries in the world in terms of availability of scientists and engineers.  This availability comes from the 30,000 university degrees granted in science, math and technology fields on an annual basis.  Puerto Rico has more than 50 institutions of post-secondary learning, including universities, colleges, community colleges and technical institutes.

And those graduates will be the ones that help Microsoft grow its IT-based business units.

“The available information technology skills are aligned with the direction that Puerto Rico is going,” says Purschwitz. “We have been very successful in getting talent to the level we need.”

Targeted Talent

Providing talent targeting for specific business needs is a tried and true model for the island. It has created a niche in the field of medical device manufacturing as well as pharmaceutical manufacturing. For the past 50 years this sector has been expanding.  

Currently 12 of the top 20 pharma and biotech tech companies have manufacturing operations in Puerto Rico.   And 13 of the top 20 medical device manufacturers operate on the island producing 7 of the top 10 medications. 

These sectors employ 12,000 with growth expected this year. 

Since 2005, Amgen, Eli Lilly, Abbott and Becton Dickinson Bioscience alone have invested more than $65.9 million in four plants.  And Puerto Rico also boasts the world's largest modular biotechnology plant for producing recombinant human insulin.

Medtronic, Stryker, Astra Zeneca, Abbott-Abbvie, Bristol-Meyers Squibb, Merck, Pfizer, Eli Lilly, CR Bard, Abbott Medical Optics and Coopervision are among the top international medical equipment and supply companies that have found Puerto Rico to be a profitable location for manufacturing. In fact there are 49 FDA-approved pharmaceutical plants scattered across the island.

Medtronic just invested $6 million investment on new technologies for the manufacture of its glucose monitoring system and cervical interbody device implants. 

Another major project that was announced during this year is CooperVision's expansion in the municipality of Juana Díaz for the manufacture of contact lenses, which entails the construction of 15 new production lines with a $250 million investment. 

Covidien's $3 million investment and commitment to create 200 new jobs over the next 5 years for new product development is part of the expansion as is.St. Jude Medical, with a $3.2 million investment to add to its local operations the manufacture of a new neuromodulator device for chronic pain.

With a strong foundation of success in the pharma and medical device sector, economic developers are directing their attention toward aerospace.  In fact in the past year 50% of the new jobs created are in this sector.

This doesn’t happen by accident. “I spend a lot of time with our companies building relationships and making sure I know what they need and how I can help them,” says Medina-Comas. His organization is providing incentives for job creation, infrastructure and lease to Honeywell Aerospace which in April of this year announced it will establish a new electromagnetic compatibility and environmental test laboratory in Puerto Rico. This new lab will support the main capabilities of its global aerospace and defense operation in the areas of app and software development and aeronautics engineering design.

Earlier in the month Lufthansa Technik announced it was establishing a major MRO operation in Aguadilla.  Infosys, another key player in the aerospace sector, is moving into the same region with an outsourcing operation in the same region.

Infrastructure Improvement

With this flurry of expansion the island has to meet the challenge of providing enough bandwidth to area industries. Thus the creation of Gigabit Island.  Scheduled to be operational by 2015 it will provide high-speed access to 85% of private businesses in the 2.3 square miles encompassing Old San Juan and the Isla Verde, Santurce and Condado districts.

Another major infrastructure improvement is the world’s first submarine cable system (Submarine Cable AMX-1), specifically designed for 100GB per second transmissions. Puerto Rico was the last connection point of this state-of-the-art fiber optic infrastructure which covers 17,800 kilometers and 7 countries with 11 points of contact.  The construction of AMX-1 started in Brazil in 2012.

Puerto Rico was the last connection point of the world’s first submarine cable system (Submarine Cable AMX-1), specifically designed for 100GB per second transmissions.

With an improving infrastructure, other projects are in development. One espeically large project is the site of the former U.S. Naval Station “Roosevelt Roads.” The property, which is located on  prime Caribbean coastline and has an airfield, seeks to attract development in nine zones, ranging from a waterfront district to sustainable entertainment areas, eco-tourism lodges, an industrial park, town centers, residential housing, and corporate offices ideal for hotel properties, marinas, casinos, educational institutions and other mixed use development.

It’s a long-term strategic plan, over the next 25 years, with the potential for creating 20,000 jobs during this time and an estimated investment of over $2 billion. And as is the model for Puerto Rico a STEM school will be located on premise.

The project has attracted the interest of 66 companies, including master developers, investment firms, architect and engineering firms, contractors, real estate companies, lawyers and others. Approximately 17% of those registered are from the United States, with the remainder from Uruguay, Brazil, England, Spain and China.

Efforts, such as these,  toward diversifying the manufacturing base is welcomed by established companies. “What is good for the island is good for us,” says Purschwitz.

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