It is one thing to develop a vibrant entrepreneurial ecosystem that works well within the confines of Puerto Rico, it is quite another to be able to scale those successes beyond our borders. In today’s global, interconnected world, this is very important to business success. The Puerto Rican market is a relatively small one, and growth cannot always be organic. Without an outlet into which we can channel our products and services, or the availability of a market system that allows for take-overs, mergers and acquisitions and joint ventures, entrepreneurship can be quickly frustrated and stifled.
By Dave Watkins
Learn more at Puerto Rico Tech Summit on June 7th!
The strength of Puerto Rico’s current entrepreneurial landscape can be undone by the weaknesses and challenges within the system, if these are not addressed. According to a study by the World Bank Group in 2015, the Puerto Rico economy was ranked 57 out of 189 on their ease of doing business. One of the key challenges in starting a business is registration processes.
Startups have to contend with unfavorable employment regulations that make doing business in Puerto Rico difficult. Issues like high minimum wage requirements and worker abuse of labor market regulations undermine business growth and development, and should be addressed.
Another weakness is the scalability of new startup businesses. The reason for this could be a general lack of global exposure – much of the current market focus is the US and the Caribbean – or maybe the Puerto Rican startup culture does not yet appreciate the vast potential markets beyond its shores and immediate vicinity, or it could be a lack of understanding of how to enter these markets.
The most obvious answer to this challenge is to adopt a model whereby the Puerto Rican ecosystem partners with some of the well-established ecosystems. These ecosystems like Silicon Valley already have a strong, viable global reach and can they help Puerto Rican Startups enter new markets. This is a quick-fix; a low-hanging fruit that takes care of the immediate need for a market. The more sustainable answer is to build a global-focused entrepreneurial culture among the upcoming generation of Puerto Ricans, giving them the impetus, vision and risk-taking ability to want to go beyond national borders and develop sustainable businesses that can tap into markets around the world.
Local industry and large corporations should be involved. In the Start-Up Chile example all the foreign companies that decided to stay did so because they integrated with large local corporations.
This is not a job for the government alone, of course. It is a job for all; one which calls upon the current crop of entrepreneurs themselves to lead the way by prioritizing scalability, in relation to startups. And as previously discussed, it is also a job for academia and for both the local and foreign corporate entities that operate here.