Puerto Rico is making the most of Covid-19’s disruptive force by staying laser focused on feeding the development of a tech-services industry that has, for the longest time, been rich with potential but short on sustained success. That dynamic is starting to change and, strangely, the pandemic has been part of the impetus.
Part of that promise has been demonstrated by the government’s willingness to help global tech firms ride above the chaos afflicting other locations in Latin America.
The tech services sector in Puerto Rico spans across industries, from IT and software development, to pharma and medical device manufacturing. Business process outsourcing (BPO) has become an important economic driver in this US territory, which shares the same currency and intellectual property rights as mainland United States.
The Puerto Rico Industrial Development Company (PRIDCO), the government-owned investment promotion agency, says the Export Services Act – known as “Act 20” – has triggered rapid growth in BPO, largely because of a reduced (4 percent) income tax rate assessed to operators.
PRIDCO indicates that the number of tech exporters has risen. These now include firms focused on data processing, hosting and cloud-based services. PRIDCO points to the country’s “highly specialized and diversified industrial base; as well as its first class communications infrastructure; educated workforce and the legal and banking structures of a US jurisdiction.”
Digital Drives the Bus
“Puerto Rico’s tech ecosystem is nimble and resilient,” says Rodrick Miller, CEO of Invest Puerto Rico (InvestPR). “Growth amid the pandemic has only made that more evident.”
InvestPR, a non-profit organization, aims to push Puerto Rico as a competitive investment destination. The body has also taken on some of the promotional activities previously led by the Department of Economic Development and Commerce.
Rosado pointed to a number of developments in the technology ecosystem in Puerto Rico, among them digital services developed to fill gaps which appeared under Covid.
On March 26, Abarca, a San Juan-based pharmacy benefit manager (PBM), and Triple-S Salud, a health provider, announced the launch of Triple-S en Casa, Puerto Rico’s first prescription home delivery program.
Powered by Darwin, Abarca’s industry-leading PBM platform, Triple-S en Casa allows members to order, manage and schedule delivery for prescriptions through an intuitive mobile app. This program was developed in partnership with Alivia Health, the largest Puerto Rican pharmaceutical services provider, to fill and deliver prescriptions.
Another company which is growing is Evertec Inc. which now has a market cap of US$2.07 billion. The company is based out of San Juan, and has some 2,300 employees.
Evertec Inc. is an electronic transaction and technology company with a presence in 26 countries in Latin America and the Caribbean. Services include three main segments: merchant acquisition, payment processing and business solutions. The company claims the largest debit network in the Caribbean and is currently thriving, despite the Covid crisis.
Banco Popular’s “Mi Banco” digital platform is yet another example of changes in the ecosystem. The service, which facilitates mobile transactions, is largely driven by the stay-at-home orders issued to stem the spread of Covid-19. On June 24, Caribbean Business reported that registered users of “Mi Banco” surpassed the one million mark for the first time since the system was launched 20 years ago.
“We reached a mark that we did not expect to reach until the year’s end or at the beginning of next year, and we considered that a very aggressive goal. Without a doubt, it is a great milestone,” Camille Burckhart, chief officer of Innovation, Technology and Operations at Popular Inc., said during a teleconference with reporters.
Forbes also reports that there has been “a growth effect on food delivery platforms” under Covid, “due to the increased demand for the suspension of activities to mitigate the effects of the pandemic.”
“Uber Eats, which is operating in Costa Rica, Guatemala, El Salvador, Panama, the Dominican Republic and Puerto Rico, indicated that delivery drivers who are diagnosed with Covid-19 or who have been quarantined will receive financial support for 14 days,” Forbes reported in April.
InvestPR also points to the work of Parallel 18, itself a subsidiary of the Puerto Rico Science Technology and Research Trust. Run by Lucy Crespo, the group has selected 14 companies which have exhibited “crisis-relieving and long-standing solutions,” for acceleration.
An Urgent Mission
“The pandemic took inertia and complacency off the table for companies worldwide,” TaskUs indicated in a statement to Nearshore Americas.
They pointed to sponsored research which indicates that digital transformation has now become an urgent mission for companies in the territory. Meanwhile, Microsoft’s Caribbean arm reports a growing hunger for tools that support collaboration.
The pace of acceleration to remote models has been nothing less than stunning, said Herbert Lewy, General Manager for Microsoft Caribbean.
“During the initial stage of the pandemic,” Lewy said, “organizations from across the spectrum focused on business continuity while they had to move to a remote reality. For this reason, technology [usage] in general has escalated. Globally, we had a surge of 31 million [new users] of Microsoft Teams, our platform for collaborative work, reaching peaks of 75 million users daily.”
TaskUs was one of the sponsors of the new report, which indicates that more than one third of companies are developing new projects in digital and other technology-led solutions.
According to the report, 54 percent of companies are anticipating an increase in client self-service.
Many managers are also expecting that phone volumes will drop for everything but complex issues (38 percent). A sizeable minority also anticipate heightened scrutiny around digital privacy and compliance (36 percent), new metrics for digital channels (33 percent), digital-specific training and staffing (32 percent) and better use of “digital” functionality during interactions (32 percent).
The researchers say that before Covid-19, many leaders were already considering similar measures. Some had already begun to connect in digital channels, leverage automation or turn to remote work on their dockets.
Reaching for Better CX
The new data suggest companies are not content with merely offering digital channels as a substitute for voice. Instead, 32 percent of companies want to tap into the unique strengths of their new media.
The result is expected to be an improved customer experience.
Herbert Lewy, head of Microsoft Caribbean, said usage of Microsoft Teams for remote work has escalated in the Caribbean region.
“Since the start of the health emergency,” said Lewy, “we have deployed Teams virtual workshops for over 11,000 people. [Including] teachers, [or those working in] government institutions and the private sector.”
Companies are currently “in the recovery phase,” he said. “Organizations are focusing on taking the lessons they acquired during the outbreak to… improve their productivity by using technology. Automation, AI solutions and cloud- based services have proven a strategic investment and its efficiency will outlast the crisis.”
Thank you so very much for the insightful reporting.