Accelerating Development of the Communications and Information Technology Sector
PRIDCO / OGP / PRMA / PRTEC / CNE
This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.
CONFIDENTIAL
Final Report
August 12, 2002
AP/CA-PRI001-01-01 Gnal. Group
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MAIN MESSAGES
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate to accelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate to accelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
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2* Partial years for 1996 and 2001
Source: Monthly survey establishments (data not seasonally adjusted)
-5,252
-13,336
-137 -24,887
-18,830
-73
-6,089
Total loss
PUERTO RICO’S MANUFACTURING SECTOR HAS SUFFERED LARGE JOB LOSSES RECENTLY
Electrical and electronic
Other chemicals
Instru-ments
Pharma-ceuticals
Textile, apparel, and leather
Other Net lossFood
Manufacturing jobs – 1996-2001*
+ 2062
+ 3995
Traditional manufacturers
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3
3017
22
26
1726
9 104 687 9
3
43
Manufacturing
Wholesale Retail
513 831
-0.6
3.4
3.2
1981 2001
100% =
Other Services
Insurance and Real Estate
WHILE SERVICE SECTOR EMPLOYMENT HAS INCREASED STEADILYEmployment*, thousands
* Employment figures exclude government sector which was 264K and 565KSource: PR Labor Department, Caribbean Business, U.S. Bureau of Labor Statistics
Health ServicesAgricultureConstructionTransportation
5.0
5.4-3.13.44.0
2.6
CAGR (%)
• Employment in the service sector increased from 52% to 68% of total employment while manufacturing decreased from 30% to 17%
• Economic development initiatives must focus more efforts on the service sector while seeking to maintain the manufacturing base
Service sector
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Computer and peripheralsCommunication equipmentAudio and video equipment Optical and magnetic mediaElectrical equipment, application, componentGeophysical Surveying(e.g., Remote Sensing)Software publishingInternet TelecomBusiness enabling tech (e.g. e-commerce)
Telephone call centersRepair and maintenance of electronic equipmentFacilities managementInformation Services
THE C&IT SECTOR HAS BOTH SERVICE AND MANUFACTURING OPPORTUNITIES
Communications and IT
Computer and electronics manufacturing(incl. design)
S/W customizationS/W support
InformationServices
CustomerServices
Data processing services Hosting and design
Remote services
Software developmentData EntryBack office ops. (e.g. HR)TranslationDistance learningResearch Technical design
Call centersHelp Desk (email, phone, chat)Sales and MarketingBilling
C&IT Industry tree
Customer Services
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JOBS IN C&IT AREAS HAVE THE STRONGEST GROWTH PROSPECTS IN US
Source: U.S. Bureau of labor statistics, 2000
The top seven fastest growing occupations in the next 10 years will be related to Information Technology
1.5 million new jobs
1.5 million new jobs
Fastest Growing Occupations in the U.S., 2000-2010
% change
100%
97%
90%
82%
77%
67%
66%
Occupation
• Computer & Software Engineers, Applications
• Computer support specialists
• Computer & Software Engineers, System software
• Networks & Computer, System administrators
• Network systems and data communications analyst
• Desktop publishers
• Database administrators
380
490
284
187
92
25
70
Job increaseThousands
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6
0
100
200
300
400
500
600
700
1995 1996 1997 1998 1999 2000 2001 2002
Available workforce
Required workforce
. . . AND DEMAND FOR IT PROFESSIONALS HAS BEEN OUTPACING SUPPLYThousands of employees
* 2001 and 2002 are forecastsSource: International Data Corporation, 2000
Hiring gap for US information technology professionals*
Demand is being satisfied by immigration of qualified IT professionals or by off-shoring IT intensive functions
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IRELAND PROVIDES A PROMINENT EXAMPLE OF CONCERTED ACTION TO BUILD A C&IT SECTOR . . .
Source:Ireland Development Agency
Position Ireland as the world leader for e-business and knowledge-based economic growth
Key elements Vehicles for execution
• Telecommunications: $5 Billion infrastructure investment in the past 10 years
• Legal and Regulatory framework:Legalize all electronic transactions, protect intellectual property (IP)
• eGovernment: Increase efficiency and quality of gov. service, use as tool to develop local C&IT expertise
• Interdepartmental Working Group– Ensures necessary coordination
across government to address items relevant to Information Society Development
– Publishes report on progress against milestones
• Telecommunications Working Group under cabinet committee on infrastructure
• IDA Marketing Strategy to attract IT outsourcing employers– Dedicated experts– Focused, performance-based
approach– Emphasis on after-care
• eBusiness• R&D• Lifelong learning• eInclusion
Supporting frameworks
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. . . THAT PROVES THE POTENTIAL FOR SIGNIFICANT ECONOMIC GAINS FROM C&IT PROMOTION
Source: Ireland Development Agency; IDC; McKinsey analysis
Tele servicesTele services
Software DevelopmentSoftware Development
Shared Service CentersShared Service Centers
60 multi-nationals and third-party providers
60 multi-nationals
140 overseas
Companies Jobs
12,000
4,000
15,000
Value proposition
• Excellent telecom infrastructure
• Financial and tax incentives
• Competitive cost environment
• Multi-lingual operators
• Readily available pool of loyal computer graduates
Ireland created 30,000 jobs in business process outsourcing in the past 10 years
Knowledge and skill transfer resulted in 700 local
software companies employing an additional 15,000
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6,039
11,709
19,967
34,783
1970 1980 1990 2000
SINGAPORE PROVIDES ANOTHER EXAMPLE OF SIGNIFICANT ECONOMIC GAINS FROM CONCERTED PURSUIT OF C&IT
Source: World Bank
Evolution of manufacturing activities
Development of local industry and infrastructure
Focus on high-tech and improving talent
6.8%6.8%
5.5%5.5%
5.7%5.7%
GDP per capita, 1995 US DollarsMain actions: 1990-2000
Growth enabling polices• Deregulation of banking and telecom industries
Sectoral growth promotion• Initiative to promote high tech investment and
create the Intelligent Island– Focus on key industries (e.g., semi-conductors,
chemicals)– Marketing and coordinating potential investors
• Incentives for local companies to establish presence in Aseon
• Development of local talent and efforts to attract foreign employees
Public sector improvement• Accountability and rigorous performance
management for public sector• Senior public service salaries benchmarked
versus private sector
CAGR
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PRIDCO AND PRTEC INITIATED THIS PROCESS TO FOLLOW A PROVEN METHOD FOR DEVELOPMENT OF THE C&IT SECTOR
Cluster Model has been validated with US Dept. of Commerce – Economic Development Agency
Implementation
Advisory Board
Organize Cluster
Develop Roadmap Gaps
Action PlanApproval
Close Gaps• New Business/R & D Centers• Infrastructure• Legislation
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THE EFFORT TO ACCELERATE THE C&IT SECTOR IS AN IMPLEMENTATION OF THE GOVERNOR’S MANDATE ON “MANOS TECNOLOGICAS”
Key players
Roles
• Implementation Team
• Industry partners
• Obtain legislative and executive support
• Develop partnerships
• Lead initiatives• Monitor progress
ImplementationImplementation
• Steering Committee• Advisory board
• McKinsey & Company• Local consultants
• Diagnose• Evaluate opportunities• Include local and
global expertise• Develop action plan
Roadmap planningRoadmap planning
• PRIDCO• OGP• PRTEC• PRMA• CNE
• Include government, industry and academia
• Prepare overall plan
• Define success
Organize for actionOrganize for action
• Governor of Puerto Rico –“Manos Tecnológicas”
• PRTEC
• Establish mandate• Set vision• Select cluster
model for economic development
Need to create more jobs in C&IT
sector
Need to create more jobs in C&IT
sector
CommunicationCommunication
∆ Jan 2001 ∆ Jan 2002 ∆ Mar 18 2002 ∆ Aug 16 2002
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MAIN MESSAGES
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
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PUERTO RICO HAS SEVERAL ASSETS TO LEVERAGE AND GROW THE C&IT SECTOR
Telecom infrastructure
Universities
Some large, sophisticated customers
Unique ties to U.S., Latin America, and the Caribbean
• UPR-M among top twenty granters of engineering degrees in the U.S. (BS by volume)
• Quality of graduates recognized by major firms and federal agencies
• Banking (e.g. BPPR, GM Group) regional leader in electronic transactions• Pharmaceutical plants (9 of top 10 best-selling drugs manufactured in
Puerto Rico)
• Easy cultural and linguistic connection with U.S. and Latin American market
• Political, economic, financial stability and integration into U.S. capital markets
• Same legal and regulatory(e.g. FDA, DoD) system as U.S.
• High bandwidth connections to U.S.• Pervasive optical infrastructure within Puerto Rico
Description
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3.3
3.4
3.6
2.8
2.6
2.6
2.7
PUERTO RICO'S TIES TO THE US, LATIN AMERICAN AND THE CARIBBEAN WERE PRIORITIZED BY C&IT INDUSTRY LEADERS
Key ties and benefits
Note: 5 = Clear competitive advantage, 4 = Emerging advantage, 3 = meets minimum standard, 2 = needs some improvement, 1 = needs significant improvement
Source: U.S. and Puerto Rico Bureaus of Labor Statistics; Economic Research Institute, 1990 Censuses; C&IT Industry Leader survey
Assessment of C&IT Assets*Rating
Country stability
Latin American and U.S. understanding
3 = meets min. standards
Bilingual workforce
Workforce with process development skills
University programs
Research Institutions
Technical schools for C&IT
• Easy cultural and linguistic connection with U.S. and Latin American market – 23% of Population bilingual, another 30%
speak English with difficulty. Almost 100% speak Spanish
• Political, economic stability and integration into U.S. capital markets– Relatively low inflation in the last decade
(Between 6-12% annual)– Strong and credible law system and
Political stability in the region
• Geographic location – Close to Miami, Mexico City, Caracas
and the rest of the Caribbean
• Strong trade relationship with the US
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UNIVERSITY OF PUERTO RICO IS AMONG THE TOP TWENTY ENGINEERING PROGRAMS IN THE U. S.
Source: ASEE Profiles of Engineering technology colleges
Engineering Undergraduate Enrollment
Engineering BS’s awarded
Electrical /Computer BS awarded
Engineering MS awarded
Engineering PhD
4,077
665
187
60
8
14
18
24
unranked
unranked
TotalStudents Rank
• Puerto Rico’s bachelor level engineering education system ranks favorably in volume and quality vs. U.S. institutions
• Graduate degrees are under represented
UPR- Mayagüez Engineering rankings vs. all U.S. universities in 2001
Polytechnic University awarded and additional 264 degrees in 2001 including 72 BSEE’sPolytechnic University awarded and additional 264 degrees in 2001 including 72 BSEE’s
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PUERTO RICO’S HUMAN CAPITAL IS MUCH CLOSER TO THE U.S. STANDARD THAN TO THE LATIN AMERICAN AVERAGE
U.S.Puerto Rico
100%
Less than 9th grade
9th grade to college
College or higher
Education attainment – 1990*Percentage of population 25 years of age or older
100%
• Good educational standards when compared to a first world country such as USA
• Strong pool of talent from Universities
• University of Puerto Rico –Mayagüez exports 40% of its computer and electrical engineering graduates
* Census figures for 2000 were released after this analysis coclusion Source: U.S. Census; “International Data on Educational Attainment” Harvard University working paper
Latin America & Caribbean
100%
75
35
11
17
51
69
8 14 20
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STRONG, SOPHISTICATED PLAYERS COMPETE IN P.R.’S C&IT MARKET
Puerto Rico has a strong base of sophisticated local and global companies on which to build upon for the
development of the C&IT sector in the island
Selected sample
GM Group
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HOWEVER, THERE ARE MANY MAJOR OBSTACLES FOR C&IT SECTOR DEVELOPMENT
Enablers Inputs Implementation
Infrastructure• Provisioning of data services is
slow, sometimes not available (e.g., ADSL deployment)
• Permits for access to utilities is slow (e.g 1-2 months municipal, up to 6 from DTOP)
Education, R&D• Under-funded, unfocused R&D
efforts not coordinated with industry
• Educational curriculum of public university does not meet C&IT industry needs (e.g. more theory than practice, few internships with industry in EE)
Skills• Best engineers frequently leave
Puerto Rico• Insufficient supply of vocational
technicians• Few professionals with
understanding of global markets• Economic Development agencies
(e.g PRIDCO, GDB) have few professionals who understand C&IT sector
Funding• Available funding is not well
coordinated with stages of need for funding (e.g. investment skill and efficiency)
• No professional oversight on funding investments
Execution• Policies change dramatically
across administrations• Government and public
university – lack organizational agility to respond to quickly evolving C&IT market priorities
• PRIDCO promotions organization is unable to compete globally for C&IT
Culture• Orientation towards tangible
assets only; no emphasis on Intellectual Property and the importance of building a networked economy
• Econ. Development solution mindset ingrained on tax incentives
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3.1
3.0
2.8
2.6
2.5
2.2
INDUSTRY LEADERS ACKNOWLEDGE THAT P.R.’S C&IT INDUSTRY IS UNDERDEVELOPED RELATIVE TO GLOBAL STANDARDS1= needs improvement, 5 = clear advantage
* Question: How would you rate PR’s C&IT industry in each of the following key success factors; Respondents assessed 3-4 key success factors in each C&IT sector
Source: C & IT Industry Leader Survey
Telecommunications Services
Network architecture and management
Electronics design and manufacturing
Remote Services
Software development
General Entrepreneurship
• According to respondents, Puerto Rico’s C&IT assets meet minimum standards only in electronics manufacturing and network architecture and management
• Effort will be required along multiple fronts to overcome the many obstacles
3 = meets minimum standardsAverage response
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SEVERAL IMPORTANT BARRIERS WHERE EMPHASIZED IN THE SURVEY1= not a barrier - 5 = overcoming barrier is essential
* Question: “Please rate the importance of the potential barriers to overcome for the growth and development of the C&IT sector in Puerto Rico”
Source: C & IT Industry Leader Survey
4.2
4.1
3.9
3.9
3.6Labor Costs*
Telecommunications service availability and price
Government execution
Location attractiveness to C & IT
Education and research alignment with industry needs
Mindset
Government execution and the availability and price of telecommunications services were identified as the two leading barriers to the development of the C&IT sector
Average response
Not included in survey (see interview quotes)
4 = barrier is somewhat important*
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SEVERAL IMPORTANT BARRIERS WHERE EMPHASIZED IN THE SURVEY (Cont.)1= not a barrier - 5 = overcoming barrier is essential
4.39
4.32
4.25
4.00
4.00
3.98
3.98
4.16
• Government
• Government suffers from changing policies, poor coordination and skills to contribute to the C&IT sector
• Cooperation between education, research and industry appears to be weak
Average response– Continuity of policy across different
administrations– Coordination among agencies to
serve investors and entrepreneurs– Skills to assess C&IT opportunities
• Labor costs– High costs to comply with labor laws
and regulations
• Location attractiveness– Loss of talent to U.S.
– Global image as business destination
• Education and Research– Alignment of coursework and
programs with industry needs– Research that supports commercialization
of new products and services
* Question: “Please rate the importance of the potential barriers to overcome for the growth and development of the C&IT sector in Puerto Rico”
Source: C & IT Industry Leader Survey
4 = barrier is somewhat important*
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FEW ECONOMIC DEVELOPMENT RESOURCES DEDICATED TO SCIENCE AND TECHNOLOGY
Source: Interviews, PRIDCO and Government of Puerto Rico Organizational Models (March 2001), Ohio Development Agency
600 employees
Economic Development Agency (DDEC)
Governor of Puerto Rico
PRIDCO
Support functions
Science & Technology Program
1 full time Director
2 contracted experts
1 C & IT expert
Nine other agencies and organizations
Ohio Development Agency
Governor of Ohio
Economic Development
Technology Division
Office of Science & Technology
• Dedicated resources are not proportional to the stated importance of technology in the island’s economic development
• There is insufficient expertise to evaluate and support C & IT initiatives
Comparison between Puerto Rico’s and Ohio’s Science and Technology economic development resources
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MAIN MESSAGES
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed aroadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed aroadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
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THE PROCESS OF SELECTING POTENTIAL AREAS/SECTORS FOR FURTHER EVALUATION INCLUDED INPUT FROM A WIDE AUDIENCE
• Interviews with key experts of selected entities (e.g: Government, Universities, Private sector, non-profit organizations,etc)
SurveySurvey
InterviewsInterviewsR
ound
tabl
es/
Pres
enta
tions
Rou
ndta
bles
/ Pr
esen
tatio
nsM
cKinsey ExpertsM
cKinsey Experts
• Analysis of results of comprehensive survey sent to 200+ participants
• Roundtables and presentations to steering committee, advisory board and general public (e.g: Caribe Hilton presentation, etc.)
• Support of McKinsey practices and experts world wide (e.g: Global strategy practice, Silicon Valley office, etc)
Initiatives and opportunities for further analysis
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ALL C&IT STAKEHOLDERS HAVE KEY CONTRIBUTIONS TO THE ECONOMIC AND JOB GROWTH OF THE SECTOR
Goal
C&IT businesses (local and
international)Jobs
Growth
Universities + vocational schools
Skilled professionals
Trained technicians
Network/nurture ideas
Gov. Desarrollo Económico
Attract, new biz
Support existing
Support creation of new bus.
Funding
Government (General)
Infrastructure
Rules + regulations
Largest customer
Entrepreneurs (new and
established)
Leadership
Know-how
Ideas
Banks & Investors
FundingSkillsLargest C&T Consumer
R&D all sources (university,
corporate, gov.
R&D Jobs
Bench of experts
Technology transfer
Enhances image of PR as a C&IT destination
Corporate Leaders
Leadership
Know-how
SupportFunding
Funding
Key contributions
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Computer and peripheralsCommunication equipmentAudio and video equipment Optical and magnetic mediaElectrical equipment, applicationGeophysical Surveying(e.g., Remote Sensing)Software publishingInternet TelecomBusiness enabling tech (e.g. e-commerce)Telephone call centersRepair and maintenance of electronic equipmentFacilities managementInformation Services
Customer Services
FROM THE INDSUTRY TREE, SEVERAL ATTRACTIVE BUSINESS OPPORTUNITIES FOR JOB GROWTH WHERE IDENTIFIED
Computer and electronics manufacturing(incl. design)
InformationServices
CustomerServices
Remote services
Shared Services Centers
Contact Centers for Hispanic market
Pharmaceutical process outsourcing
Health care related – IT
Software development
Banking and insurance process off-shoring
Niche electronics manufacturing• Medical• Defense
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C&IT BUSINESS OPPORTUNITIES IDENTIFIED
• Translation and localization for U.S. Spanish-speaking market and Latin America
• Application development• Consultancy service and systems
integration
Software
Pharmaceutical process outsourcing
• Drug lifecycle management• Regulatory filings and
management
Contact Centers for Hispanic market
• Marketing campaigns• Software help desks• Customer service
Shared Services Centers
• Financial administration• Personnel administration• Information technology• Logistics management
Banking and insurance process off-shoring
• Wholesale banking services• Insurance claim processing, sales
support
Health care related – IT
• Health insurance claims processing• Electronic medical records (HIPAA
related) remote management
Higher priority
Electronics manufacturing
• Contract manufacturing services for high margin products requiring high quality manufacturing processes with regulatory connections to U.S. (e.g., medical electronics, defense)
B1-B2
B5
B6
B7
B8
B3
B4
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GOVERNMENT INITIATIVES
Performance-Based Mgmt of C&IT Promotion
Performance-Based Mgmt of S&T Funding
Engage PR Talent Abroad
Promotion of Existing Companies
C&IT Promoexport
Promote Early Stage Investing
De-Bottleneck Barriers to Telecom & Broadband
Incentives for Local C&IT Consumption
Reduce Business Startup Costs
Increase pipeline of companies in C&IT with professional promoters
Target C&IT companies already in PR –local and continental for expansion
Professional oversight of S&T funding and awardee performance
Engage PR professionals abroad to help with Econ Development
Promoexport activities to include C&IT small and medium local companies
Special treatment for C&IT startups to encourage growth
Diagnose competitiveness and release barriers to growth
Government contracts to award additional points to proposers who include local content
Review and adjust venture capital and early funding laws and regulations
G1
G3
G4
G5
G6
G7
G2
G8
G9
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RESEARCH AND EDUCATION INITIATIVES
C&IT Center of Excellence
Increase applied research activities in C&IT by funding a research center in partnership with industry leaders and a stateside university
Focus R&D funding on target applied research areas aligned with business opportunities
Increase hi-tech startups with a focused incubator based on national incubator standards, professional oversight.
C&IT Incubator
Link R&D Funding to Econ. Development
Realign / Strengthen C&IT Skills
Entrepreneurial Curricula
Close the gap between academic C&IT skills production and the business requirements of the C&IT industry by reducing curriculum review cycle for key courses incorporating industry input and benchmarking with other programs.
Neighborhood Internet Access
Include entrepreneurial classes all C&IT curricula with local business cases and emphasis on technology business models
Implement After School and Neighborhood Internet Programs that close the Digital Divide (e.g. Chilean model)
R1
R2
R3
E1
E2
E3
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POTENTIAL SOURCES OF JOB GROWTH IN C& IT IN THE LOCAL MARKET
Telecom
Software development & maintenance of systems
E-government
Pursuit of initiatives in telecom de-bottlenecking (G7), software development (B1), and increasing local government IT consumption (G8) will deliver the benefits of an increased local C&IT market
Examples
Increased wireless, fixed line, and internet penetration:• Support• Installation and maintenance• Sale of equipment and services
Increased usage of IT in local businesses, and higher PC household penetration• Software customization or application
enhancement• Systems management (Data and network
centers)• Help desk, installation and services
Increased government’s consumption of local IT products and services• Software application development• Training, support• Help desk, installation and services
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• Familiar – We have experience - a good fit. Outcome –should we succeed - can be predicted. Major risk is execution.
• Unfamiliar – We do not have relevant experience, but we know the initiative has succeeded elsewhere. Gaining knowledge could be the initiative itself. Risk in successfully gaining knowledge as well as execution.
• Uncertain –Outcome is not knowable - does not depend on our actions. However, given the potential impact, we take steps to prepare ourselves –gain and create knowledge – to stay in the game until uncertainty is resolved
• 1-2 years - Fulfill current needs for employment, support existing players in the sector
• 3-5 years - Create medium-term growth• 5 years + - Investments to gain familiarity in potentially big ideas
• Evaluate the potential return of the initiative to Puerto Rico in economic terms (e.g. jobs, contribution to GNP, wages)
• Some initiatives are impossible to quantify economically – but a reasoned, subjective assessment (low, medium, high) is necessary to prioritize
• Synergies between initiatives will influence the size of the impact
Risk – What is our degree of familiarity?
Timing – When do we expect
payoff?
Size – What is the economic
impact?
THE INITIATIVES WERE THEN ASSESSED ALONG THREE DIMENSIONS
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1-2 years 3-5 years
Uncertain
Unfamiliar
Familiar
Meet current expectations
Create medium-term
growth
Generate portfolio of high-
return options
2 3
6
8 9
1
4
7
G3S-M
B4
5
Timing
Ris
k
Business opportunities1. Software development/outsourcing2. Software and web localization3. Shared services centers4. Contact centers5. Pharma process outsourcing6. Healthcare IT7. Financial/insurance off-shoring8. Niche electronics mfg. (I.e. medical,
defense)
Government1. Performance-based promotion2. Promotion of existing companies3. Performance-based funding4. Engage PR talent abroad5. C&IT Promoexport6. Reduce start-up costs7. Debottlenecking barriers to
telecom/broadband8. Incentivize local C&IT consumption9. Promote early stage investing
Research1. Center of Excellence2. Link R&D fund to economic dev.3. C&IT incubator
Education1. Realign/strengthen C&IT skills2. Entrepreneurial curricula3. Neighborhood Internet access
Size of circle indicates potential jobs/economic growth at stake
ASSESSMENT OF OPPORTUNITIES AND INITIATIVES FOR C&IT ROADMAP
E1E3
G2 G5
R3
B6
G1
G8
B3
B2
B1
G4 G9 (?)
B5
B7
G6
R2
R1B8
E2
G7M-L
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Four initiatives/ opportunities selected based on:• Potential for impact• Unlikely to be successful
without extraordinary effort• Address most visible issues
FOUR PRIORITY INITIATIVES WHERE SELECTED FOR FURTHER DEVELOPMENT BY THE WORKING TEAM
Advisory Board
Steering Committee
23 initiatives and opportunities to accelerate the growth of the sector
• 12 Essential initiatives for further prioritization
Input from C&IT Community
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1-2 years 3-5 years
Uncertain
Unfamiliar
Familiar
Meet current expectations
Create medium-term
growth
Generate portfolio of high-
return options
2 3
6
8 9
1
4
7
G3S-M
B4
5
Timing
Ris
kASSESSMENT OF OPPORTUNITIES AND INITIATIVES FOR C&IT ROADMAP
E1E3
G2 G5
R3
B6
G1
G8
B3
B2
B1
G4 G9 (?)
B5
B7
G6
R2
R1B8
E2
G7M-L
Highest priority initiativesRelated to highest priorityNot related to priority init.
Business opportunities1. Software development/outsourcing2. Software and web localization3. Shared services centers4. Contact centers5. Pharma process outsourcing6. Healthcare IT7. Financial/insurance off-shoring8. Niche electronics mfg. (I.e. medical,
defense)
Government 1. Performance-based promotion2. Promotion of existing companies3. Performance-based funding4. Engage PR talent abroad5. C&IT Promoexport6. Reduce start-up costs7. Debottlenecking barriers to
telecom/broadband8. Incentivize local C&IT consumption9. Promote early stage investing
Research1. Center of Excellence2. Link R&D fund to economic dev.3. C&IT incubator
Education1. Realign/strengthen C&IT skills2. Entrepreneurial curricula3. Neighborhood Internet access
Prioritization based on inter-linkages between initiatives
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TOP INITIATIVES SELECTED ARE INTER-RELATED WITH OTHERS
Selected initiativesSelected initiatives
• Performance based promotions new and existing companies
• Contact centers• Shared Service Centers
• Link univ. research to industry needs, Computing center of excellence, C&IT incubators, software dev. And localization
• Remove barriers to telecommunications development (e.g. quality, access, investment)
• Niche manufacturing (medical and defense electronics)
• Performance based promotions new and existing companies
• Contact centers• Shared Service Centers
• Link univ. research to industry needs, Computing center of excellence, C&IT incubators, software dev. And localization
• Remove barriers to telecommunications development (e.g. quality, access, investment)
• Niche manufacturing (medical and defense electronics)
Major focus (initial)Major focus (initial)
• Software dev and localization• All other business opportunities• C&IT Promoexport• Incentivize local IT consumption
• Incentivize local IT consumption• Early stage investing• Realign C&IT curricula with
industry needs• Entrepreneurial skills dev.
• Shared Services centers• Contact centers• Healthcare IT• Financial and Insurance off-
shoring
• None other within roadmap; Essential to sustain thousands of legacy electronic manufacturing jobs
• Software dev and localization• All other business opportunities• C&IT Promoexport• Incentivize local IT consumption
• Incentivize local IT consumption• Early stage investing• Realign C&IT curricula with
industry needs• Entrepreneurial skills dev.
• Shared Services centers• Contact centers• Healthcare IT• Financial and Insurance off-
shoring
• None other within roadmap; Essential to sustain thousands of legacy electronic manufacturing jobs
Related initiativesRelated initiatives
PRIDCO Promotions
PR Research and Commercialization Alliance (PRRCA)
Telecom de-bottlenecking
Electronics manufacturing
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PRIDCO MUST CONSIDER ITS CRITICAL PROMOTION (SALES) FUNCTION ALONG THE TOP 5 LEVERS
2.Efficient coverage
3.Effective
Selling skills
4.Disciplined
sales process
Winning sales
(promotions)model
1.Marketing Strategy
(Segmentation/Value Proposition)
5. Rigorous performance management
• Do I have the right mix of skills/ expertise in the sales team to deliver ROI-focused proposals for my customers?
• Is there a significant gap between top/ average rep performance? Do I understand key drivers ?
• Do I know what right level/mix of resources is needed to cost effectively serve industry segments?
• Have I fully leveraged new channels/ technologies to reduce sales costs?
• Are reps spending>50% of time onjob-generatingsales activities?
• Do I understand which segments are most important today and in the future? Do I know what my top 20 accounts are and their evolving needs?
• Is my customer value proposition truly differentiated from competitive offerings?
• Am I measuring and coaching on the right performance metrics• Am I attracting and retaining top performers• Are managers spending > 60% of time actively managing the pipeline
and coaching reps?• Is compensation structured to encourage desired behaviors?
• Am I managing incentives (e.g. grants, loans, subsidies) explicitly?
• Do I have the right investments in sales tools and training to maximize effectiveness?
• Do I understand my sales pipeline (I.e. drop out rates, bottlenecks, win-rates, etc.) ?
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PRIDCO PERFORMANCE BASED PROMOTIONS
Description:• Applying sales and marketing strategy
discipline to the promotion of local and foreign companies in P.R.
• Hiring/ training promoters to identify, target and win C&IT jobs for P.R.
Highlights from report:• Evaluated PRIDCO’s promotions function
in the context of competition for global investments and concluded that:– PRIDCO promotions processes are not
consistent with needs for C&IT– Promotions organization lacks
necessary skills to attract and promote C&IT sector
• Developed improvement model based on sales effectiveness methods
• Developed high level work plan for pilot
• Potential impact: Enormous - over 30,000 direct job potential by exploiting C&IT sector alone
Short term milestones Responsible
Measures of successInterim• # of promoters, man-hours committed exclusively to
C&IT promotion• # of C&IT companies in sales pipelineEnd-goal• # of jobs added in C&IT• $ of jobs added in other sectors using new skills
Committed to run a pilot with at least two promoters with some external assistance for three months – min.
Distinct value propositions developed for priority sectors (contact centers, shared svc.)
Several companies in sector contacted and a full round of feedback –adjustment completed
First company in C&IT signs contract to move to PR
DDEC/ PRIDCO
PRIDCO / Promotions
PRIDCO Promotions
PRIDCO Promotions
FOR DISCUSSION
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RESEARCH & COMMERCIALIZATION ALLIANCE
Technological Solutions
and SpecializedIncubators
Interamerican UniversityC&IT Research MemberInteramerican UniversityC&IT Research Member
Sistema Univ. Ana G. MendezC&IT Research MemberSistema Univ. Ana G. MendezC&IT Research Member
Polytechnic University:C&IT Research MemberPolytechnic University:C&IT Research Member
University of Puerto RicoC&IT Research MemberUniversity of Puerto RicoC&IT Research Member
Focus onManufacturing
Electronics
Focus one-Business
(incl. eGovernment)
Focus onFinancial/Insurance
IT Services
Focus onHealthcare IT
Systems
Mobile / Wirelesstechnologies
Web / E-Commercetechnologies
Network / Securitytechnologies
Transaction / Databasetechnologies
Internet 2HPCF – UPR
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PUERTO RICO RESEARCH AND COMMERCIALIZATION ALLIANCE
Description:• Government funded, industry and
university led• Funds applied for research with
technology commercialization potential. Its funds, attract other sources (e.g. federal, university, investors) to fund infrastructure, and expenses. As alliance secures continuous legislative funding, it invests in infrastructure and attraction / retention of world-class scholars potentially becoming similar to GRA. (Georgia Research Alliance)
Highlights from report:• Assessed P.R.s academic research
activities as deficient in amount of funding, focus of efforts, and commercialization performance
• Describes successful model (GRA) for emulation and established link with GRA leaders
Potential impact: Very large, far-reaching –tough to quantify (GA attracted $1.4b, >2000 new high tech jobs)
Short term milestones Responsible
Measures of successInterim• # qualified proposals submitted to PRRCA• $ in funding attracted (leverage)End-goal• # of local startups and local jobs created• $ in industry / investor funds invested• # of patents submitted
Complete and deliver proposal to PRIDCO Board
Formalize PR RCA organization, elect leadership
Complete process to select target areas of research funding based on existing competencies
Fund first project(s) - potentially to include UPR M CISE facility
Submit proposal for legislative continuous funding
Founding group (S&T, AGM, UPR
PRRCA, S&T
PRRCA and S&T
PRRCA
PRRCA /PRIDCO
FOR DISCUSSION
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THERE ARE RESIDUAL ISSUES BEYOND INFRASTRUCTURE CAPACITY
C&IT sector growth needs• Infrastructure
deployment (e.g. advanced services)
• Low prices• High service
levels
Can service standards meet C&IT requirements• Speed of provisioning? (e.g. permits, backlog)• Reliability? (e.g. svc. outages due to cable
cuts)• Responsiveness? (e.g. customer svc.)• Coverage outside metro areas?
Regulator
Competitors Consumers
Is the JRT proactively shaping industry structure? (e.g. how many facilities-based competitors will max. benefits from competition?)
Is current regulation and control sufficient?• Is there sufficient
coordination and leadership in influencing economics? (e.g. Tariff, muni taxes, RoW, re-balancing)
• Are there sufficient skills and legislative support to enforce interconnection agreement?
• Is the JRT Setting and monitoring high QoS standards? Are consumers
aware of recent improvements in telecom service?
* JRT- Junta Reglamentadora de Telecomunicaciones – P.R.s Public Utility (telecom) CommissionSource: Interviews; Team analysis
Potential bottlenecks
Other Gov.agencies
How can better coordination among gov. agencies be achieved to improve industry economics and QoS?
Is there sufficient coordination between development agencies and telecom providers
to effect timely infrastructure
deployment and repair?
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DE-BOTTLENECKING TELECOMFOR DICUSSION
Description:• A workgroup of leader volunteers from
the service providers, customers, and government seeking to identify and eliminate barriers to increased quality, access and investment in the telecommunications sector
Highlights from report:• Mismatch between service standards and
customer expectations (e.g. slow provisioning, outages due to cable cuts, poor responsiveness, sparse coverage outside metro areas)
• Lack of reliable information on service standards and performance
• JRT is legally constrained from proactively shaping industry structure
• Lack of coordination among gov. agencies (e.g. ARPE, DTOP, AEE, CRIM) to achieve a positive impact on telecommunications
• Potential impact: Very large – strongly linked to 4 business opportunities identified ( 12,000 job potential)
Short term milestones Responsible
Measures of successInterim• # of promoters, man-hours committed
exclusively to C&IT promotion• # of C&IT companies in sales pipelineEnd-goal• # of jobs added in C&IT• $ of jobs added in other sectors using new
skills
Public forum with top telecom stakeholders at Sillicon Reef 2002
Workgroup meets with PRIDCO planners to identify sites for fiber deployment into selected industrial parks – Investment follows
Workgroup meets with selected agency leaders to identify policy coordination opportunities – top priority changes follow
CNE
OGP / JRT
OGP/JRT
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SUCCESSFUL ELECTRONICS MANUFACTURING IN PUERTO RICO FOCUSES ON HIGHER VALUE PRODUCTS
High profit margins
High mix
High value to weight ratio
Description
• Highly profitable products benefit most from low tax rates. (Company must be a multi-national to take most of advantage of CFC* exemption)
• Local expertise is good at flexible, customized, high quality mfg. –experienced and skilled labor and professionals are readily available in the island
• Lower shipping costs relative to total delivered cost of product (critical element when competing vs. Continental U.S. locations)
Existing product examples
• Inkjet cartridges; EDP accessories for HP to resell within its network
• Security/monitoring equipment –1000 SKUs in one plant
• Memory cards, inkjet cartridges, electronic security tags
* Certified Foreign Corporations do not pay home-country taxes until they repatriate profitsSource: Interviews with local manufacturing leaders; Team analysis
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MEDICAL AND DEFENSE ELECTRONICS ARE HIGHER VALUE PRODUCTS WITH CHARACTERISTICS PARTICULARLY COMPATIBLE WITH PR
* Estimate based on gaining 5% of potential market by 2005, $84,000 rev. per employee averageSource: Electronic Trend Publications; McKinsey interviews
• The medical equipment market is expected to grow rapidly; the products have high margins and there are few CMS players in this market
• Requirements to compete – Demonstrated capabilities with high-mix/complex products– FDA certification– Ability to provide ready supply
• There are relatively high barriers to entry (e.g., FDA certifications, technical complexities, low volume), thus it may be easier to sustain a niche business strategy over the long run
• Outsourcing has long been dormant in defense due to long product cycles, low incentives to cut costs, and general OEM bias against outsourcing.
• The outlook is improving, as defense spending is expected to increase, cost will be increasingly scrutinized, and OEMs are increasingly open to outsourcing
• There are relatively high barriers to entry (e.g., government/OEM certifications, technical complexities, low volume), thus it may be easier to sustain a niche business strategy over the long run
Potential: 6,000 jobs*
Potential: 3,500 jobs*
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NICHE, ELECTRONICS MANUFACTURING
Description:• Pursuing electronics manufacturing
opportunities where P.R.’s unique characteristics can best be employed
• Improving assets and capabilities to serve existing
Highlights from report:• Identified two high potential niches that
are growing quickly, match local competencies, and have an opportunity for P.R. to provide a unique, sustainable advantage– Medical electronics (CMS)– Defense electronics (CMS)
• Identified actions to improve competitiveness– Improve design education programs –
more practical /. internship work– Decrease supply chain costs
Potential impact: 9,000 direct jobs within 5 years
Short term milestones Responsible
Measures of successInterim• # of man-hours dedicated to pursuing opportunities in
sector• # of companies in conversations to grow niche electronic
operations locallyEnd-goal• # of jobs added in electronics niche mfg. • Total value/ value added of exports in sector
Committee started to steward search for opportunities
Business cases prepared for one high priority opportunity (e.g. imaging medical electronics)
Sales kit completed for international and local business promotion
Assessment of ability of existing mfgs. to compete
PRMA
PRMA / PRIDCO
PRIDCO
PRMA
FOR DISCUSSION
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Horizon 1Extend and defendexisting C&IT sectors
Horizon 2Build emergingopportunities
Horizon 3Create viable options for future
Jobs
Shore up competitive potential and unlock remaining potential in early advantaged sectors
Build capabilities and fuel growth in early advantaged C&IT sectors
Identify and nurture future options in potential businesses
Time
ROADMAP THEORY - THINKING ACROSS GROWTH HORIZONS
Convert
Convert
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C&IT CONCEPTUAL ROADMAP
Set the stage – Make P.R. attractive location for C&IT
Build momentum -Explosion of world class C&IT professionals and businesses coming to P.R.
Achieve competitive advantage -World class knowledge and talent in select C&IT sectors
• De-bottleneck telecom barriers
• Initiate Government/ Private Sector/ University partnership for agreement on research, curricula and commercialization
• Launch account teams at PRIDCO (existing & future companies)
• Promote early advantaged sectors
• Red tape reduction
• Account teams fully staffed and trained
• Initial niche contract manufacturers operating and growing
• International companies outlocating and outsourcing to P.R
• Knowledge and skills transfer to locals
• New research projects underway
• Account teams focused on managing existing clients
• New patents in P.R. explode
• P.R. is preferred C&IT destination in select sectors
• Performance based management of promotion and economic development efforts
• Consistent policy across administrations
• Partnership led, government supported efforts
• Infrastructure investments (e.g. equipment, labs, wired buildings)
• Performance based management of promotion and economic development efforts
• Consistent policy across administrations
• Partnership led, government supported efforts
• Infrastructure investments (e.g. equipment, labs, wired buildings)
Key issues to address
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C&IT ROADMAP OF INITIATIVES
• PRRCA has world class competence in select areas
• PRRCA C&IT startups funded
• Significant increase in C&IT grads focused on needs of local industry
• Internet penetration is comparable to less developed US states
• PRRCA operational (projects, funding, international scholars, etc.)
• Business plans from PRRCA to early stage investors
• C&IT curricula reformed
• Significant increase in Internet users
• Research alliance(PRRCA) Computing Center of Excellence kickoff
• Early stage investors brought into PRRCA
• C&IT Curriculum update
• Neighborhood internet access launched
• PRIDCO promotions focuses on customer retention and new C&IT industries
• Significant local C&IT being exported
• PRIDCO promotions reform complete
• Telecom sector agreements reached
• C&IT critical element of Promoexport
• Significant increase in Gov consumption of local C&IT with rights to export retained
• PRIDCO promotions pilot
• Telecom sector strategy & change agenda
• C&IT Promoexport introduction
• New incentives for Gov consumption of and promotion of local C&IT
• Higher value added opportunities available (Software development, Pharma process outsourcing, other)
• Niche manufacturing in full swing -supporting the medical devices cluster and the plastics sector
• Adjacent opportunities (e.g. Service Centers, SW localization, financial off-shoring)
• Early advantaged sectors (e.g. Call Centers)
• Existing skills related opportunities initiated (e.g. Healthcare IT, niche manufacturing)i
Business opportunities
Government
Research and Education
Set the stage
Build momentumAchieve competitive advantage
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MAIN MESSAGES
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
• The Communications and Information Technology sector has been identified as a high potential sector to arrest a recent job loss trend; and the C&IT Roadmap effort was launched to implement an executive mandate toaccelerate the sector
• When we conducted our diagnosis, we recognized that P.R. has some assets it could bring to C&IT but there are many more barriers to overcome to be successful in C&IT area
• In conjunction with a wide group of stakeholders, we developed a a roadmap of focused initiatives to build the capabilities and eliminate barriers necessary to capture opportunities in C&IT. Out of 23 recommended initiatives, 4 key initiatives were selected for focused attention from the Advisory Board to ensure implementation success
• Based on the commitment expressed by the DDEC Secretary, the Advisory Board decided that the C&IT organization should begin implementation immediately from within the DDEC. The implementation will require focus, leadership, and a committed full time resource which leverages existing organizations, and leaders to systematically drive the priority initiatives to completion
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C&IT ROADMAP IMPLEMENTATION
Objectives 1. In the short term, foster the creation of a significant number of jobs in a promising sector
2. Facilitate the growth and emergence of local C&IT businesses
3. Facilitate the process of attracting C&IT businesses to Puerto Rico
4. Spark collaboration between industry and universities to build the knowledge base for C&IT innovation in the future
To be highly focused in the implementation of the C&IT Roadmap's initiatives in order to have an immediate and lasting impact in the C&IT sector and thus the economic development of the island through a concerted, multi-sector effort
Mission
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SEVERAL ALTERNATIVES FOR ROADMAP LEADERSHIP AND OPERATION MODEL WHERE EVALUATED
What is the best organization to provide roadmap leadership?
Existing independent (e.g., PRTEC, CNE)
Stand-alone
Within Government (DDEC/OGP)
OR
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CRITERIA FOR SUCCESSFUL ORGANIZATION*Speed
Focus
Organization
• Build on momentum reached to date
• Fast decision–making process
Continuity• Leadership at several
levels can pursue a consistent path regardless of political changes
• Full time dedicated resources
• Initiatives developed by those closest to problem and decision-makers
• Priority is on implementation
• Organization pursues acceleration of C+IT sector exclusively
Wide representation
• Organization that is accessible to all parties
• Leadership that is representative of the members of the sector
• Decisions can be made without disproportionate influence from any sector
*Based on profiles of 10 regional economic development organizations in the U.S.
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THE ADVISORY BOARD DECIDED ON A SHORT AND LONG-TERM SOLUTION FOR THE ROADMAP’S LEADERSHIP
• Takes advantage of existing commitment from DDEC and OGP, communicates urgency to all other organizations involved
• Allows uninterrupted support from PRIDCO S&T office and OGP
Initial effort with DDEC and OGP leadership and a project manager hired full-time; leadership to migrate to an independent organization within two years to ensure continuity to effort as prescribed by Advisory Board
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DDEC/OGP LEADERSHIP IS THE BEST SHORT TERM ALTERNATIVE TO LEAD THE C&IT ROADMAP
DDECUnder
Secretary or OGP CTO
Roadmap project
manager
C&IT Working teams
DDEC/OGP assumes responsibility for driving initiatives to completion. Works in cooperation with multiple government, academic, and private entities. Could potentially become a separate subsidiary.
• DDEC/OGP solution may need to be temporary. Continuity could be compromised with change in administration and DDEC leadership therefore transition to permanent organization is built-into plan
• Leverage DDEC’s and OGP's enthusiasm to get resource(s) dedicated to roadmap implementation. Use DDEC and OGP influence to facilitate fast decision-making
• DDEC/OGP must make concerted effort to involve C&IT stakeholders. The project manager would have dotted-line reporting to the C&IT Advisory Board
Highlight criteria
Continuity
Speed
Wide representation
• Secretary, DDEC• Director, OGP• President PRTEC• C&IT Executive (e.g., Cervoni)• C&IT Entrepreneur (e.g., Luis Rivera)• University leader (e.g., Velez-Arocho)
Strategic Team
(Cantero)
OGP, PRIDCO, CNE, PRMA, PRTEC, others (e.g. PRCC, research expertise, rep. Voc/technical schools
Project mgr quals:Driven self motivatedStrong problem solverArticulate, capable of defending integrity of recommendationGood convener of meetings and opinionsReady access
Steering Committee
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THE C&IT ROADMAP ORGANIZATION WILL EVENTUALLY TRANSITION INTO A NON-GOVERNMENT, PERMANENT ORGANIZATION SUCH AS PRTEC/CNE
Board of Directors
C&IT Asst. Director
C&IT Advisory Board
Executive Director
Added
Other initiatives
within chosen organization
The existing organization’s board would oversee the C&IT effort – the board should be representative of C&IT interests
Dedicated to C+IT initiatives
C&IT Working teams
The executive director of the existing organization would gain an additional project manager to push C&IT initiatives
• An independent, organization can provide continuity across changes in administration
• The independent organization can make decisions quickly (e.g. many important players and influencers in the sector – HP, PRTEC, UPR, PRIDCO are in PRTEC)
• The independent organization should reach a wider audience within C&IT’s diverse industries and across political lines
• Care must be taken to ensure that the chosen permanent home can dedicate substantial “mind share” to the C&IT cause
• Funding for a full-time, dedicated C&IT project manager would have to be secured before handing-off responsibility from DDEC/OGP to the establish independent org.
Design criteria for success
Continuity
Speed
Wide representation
Focus
Organization
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ROLES IN THE ORGANIZATION
Organization LeaderOrganization Leader
• Provide overall vision and leadership to the roadmap effort and be actively involved in assisting the organization in achieving implementation goals
Advisory BoardAdvisory Board
• Offer guidance and governance over strategic, financial and operational issues and work closely with the project manager to facilitate execution
Work TeamsWork Teams • Collaborate with all key parties to fully implement C&IT Roadmapinitiatives
Project ManagerProject Manager
• Coordinate day-to-day operations, monitor and follow-up,facilitate collaboration and barrier elimination, communicate (disseminate information and progress), represent (interface with other organizations on Roadmap's behalf) monitor environment changes for possible recommendation on a periodic environment review
Role description
(Steering Team, Board of Directors, or Department Head depending on chosen model)
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THE PROJECT MANAGER WILL LEVERAGE EFFORTS ALREADY UNDERWAY
Board with academia, government, and private enterpriseAffiliated emerging clusters: computer & IT, e-business, biotechnology, etc
Emerging group with academia, municipal governments & private enterprise support for Caguas – led regional development
Multisectorial group with representatives from island’s major associations/groups (PRMA, PRCC, venture capitalists, TEPR, academia, entrepreneurs, PRTEC, etc.)
Private, non-profit, non-partisan PR corporation that develops economic development policies
Description
PRTEC*
INTECO
Alianza (PRSTA)*
CNE*
Association of technology entrepreneurs (including C & IT)
Just constituted group of local computer software developers and hardware manufacturers
Group of individuals and entities from private enterprise, government and academia
Professional group of computer engineers within the Colegio de Ingenieros y Agrimensores de PR
Description
TEPR
Emerging Technology Work Group/PRCC
Internet Society (ISOCPR)
IICOM/CIAPR
NOT EXHAUSTIVE
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EXECUTION WILL DEPEND LARGELY ON MOTIVATED CHAMPIONS SUPPORTED BY THE RIGHT ORGANIZATIONS
Business opps.Business opps.
• PRIDCO - Promotions• PRIDCO - Facilities• PRIDCO – Science and Technology• Expert supporters from private
industry• PRTEC
G1 PromotionG1 Promotion
G3 FundingG3 Funding
G4 Talent abroadG4 Talent abroad
G5 IT PromoexpG5 IT Promoexp
G6 Startup costsG6 Startup costs
• PRIDCO - Promotions
• PRIDCO – Science and Technology
• CNE• PRIDCO• PRTEC
• Fomento Comercial/Promoexport• PRCC – Emerging Technology
Group• Software Developers' Group (Arroyo)
• OGP
G7 TelecomG7 Telecom
• JRT• CNE
G8 Local IT consump.G8 Local IT consump.
G9 Early invest.G9 Early invest.
R1 – R2 ResearchR1 – R2 Research
R3 IncubatorsR3 Incubators
E1 C&IT curriculaE1 C&IT curricula
• OGP• TERP• Fomento Comercial/Promoexport
• Venture Capitalists• PRIDCO
• UPR – Mayagüez• PRIDCO – Science and Technology
• Fomento Comercial/Promoexport• DDEC• Software Developers' Group (Arroyo)• TEPR
• Colegio de Ingenieros y Agrim. de Puerto Rico
• Consejo de Educación Superior• UPR System
E2 Entrepre-neur skillsE2 Entrepre-neur skills
E3 InternetE3 Internet
• Consejo de Educación Superior• Universidad Polítécnica de Puerto
Rico• TERP
• CNE• Internet Society• DE
Supporting cast of organizations
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COMMUNICATIONS PLAN SUMMARY
GovernorGovernor
Objective ChannelStakeholders
• EDC meeting• Get government senior level commitment
Agency HeadsAgency Heads
LegislatureLegislature
Industry LeadersIndustry Leaders
TelecomsTelecoms
AcademiaAcademia
ResearchersResearchers
MediaMedia
• Achieve buy-in to overall plan • Cocktail, roadshow, personal
• Stimulate effective public policy drafting • House and Senate meetings, personal
• Gather long-term commitment to Roadmap • Roundtables, HiWire, AB member calls
• Accelerate telecom sector development • Roundtables, CNE and JRT meetings
• Create sense of urgency for skilled workforce. • Roundtables and ComputerWorld
• Link research to economic development • Roundtables and expert database
• Involve entire community in effort • Seminars, interview with AB and PM
AbroadAbroad • Consider Puerto Rico as C&IT destination • Trade mags and econ analysts
General PublicGeneral Public • Transmit importance of C&IT to econ dev • Major newspapers and PBS
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IMMEDIATE IMPLEMENTATION RESPONSIBILITIES AGREED UPON DURING FINAL DISCUSSION
Responsibilities
Project management
Sector strategies• Electronics Manufacturing• Call Centers• Healthcare IT• Shared Service Centers
Promotion and sales
Industry and research coordination• PRRCA• Telecom Debottlenecking
Raise to Governor’s agenda
Execution of communications plan
ASSIGNED RESPONSIBLE
• Hormaza to follow-up
• Hormaza, project manager to follow-up potentially hire outside experts to help with strategies
• Hormaza to follow-up – need support from Prieto and or Watlington
• Garcia-Feliu – he needs official request sent to President of SUAGM for his time
• JRT/OGP – CNE as convener• OGP-Maldonado/Acosta
• Project manager with help from PRIDCO
FOR DISCUSSION
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NEXT STEPS
• Identify interim project manger to host implementation-focused meetings
• Brief to Cantero-Frau, Melba Acosta, and Jimenez Juarbe to secure support for initial hiring
• Recruit project manager
• Project manager to host implementation-focused meetings with working teams
• Launch PRIDCO promotions pilot discussion with key PRIDCO promotion leaders
• Coordinate assignment of sector strategies
• Follow up Advisory board meeting