Why Costa Rica needs Manufacturing Startups?

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Today I am going to share a strong point of view on Costa Rican startups. That I think can enhance Costa Rican economy.

Manufacturing! Yes, you read it right. Manufacturing is one of the bright spots that can help Costa Rican economy to get stronger. I mean, real stronger! We have been consuming many imported products that makes the money go out of the country. But, we need it to stay for the economy to grow.

Organizations like CINDE has been playing major role to make Costa Rica one of the main manufacturing hubs of LATAM. But, we are still missing to manufacture for ourselves. For our own consumption.

So, why Costa Rica needs more manufacturing startups?

  1. Manufacturing brings more jobs: I would like to share some stats that will support this point. Industry (including mining, manufacturing, construction, and power) contributed 46.8 percent of GDP of China in 2010; bringing in more jobs. Offshoring resulted in a net loss of approximately 220,000 manufacturing jobs in US from 2000 to 2003. I believe that Costa Rican startups can bring in more jobs helping to make the economy stronger.
  2. Manufacturing has been the path to development: Creating the ecosystem of high quality manufacturing has been one of the highest priorities of the rich countries in order to develop national wealth. The book called How Rich Countries Got Rich and Why Poor Countries Stay Poor will help you understand even better. I will leave the links of amazon and goodreads if you fancy reading this piece.
  3. Manufacturing is the most important cause of economic growth: We have been seeing a good amount of growth in service based Costa Rican startups. But, no manufacturing industry means no economic growth. Just consider when Steve Jobs introduced the iPhone to the world; leading to creation of thousands of jobs. Followed by more jobs when other mobile phone manufacturers pitched in. Did you know that mobile technology has created 11 million jobs?
  4. Services are dependent on manufactured goods: Most of you will argue that services based Costa Rican startups create good amount of jobs as well. But, don’t you think that many of these services jobs are dependent on manufacturing goods? I will share an example of US (I apologise that I couldn’t get numbers on Costa Rican startups), where the retail and wholesale makes up to 11% of the economy of US. Isn’t this service the act of buying and selling goods? According to the World Trade Organization, 80% of inter-regional trade is in goods, and only 20% is in services.

On the other hand, Jack Ma, Alibaba’s chief asks us to stop looking to manufacturing to create jobs. At the end, I will leave all this to you; and analyse if Costa Rica really needs more manufacturing.

 

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