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Puerto Rico: An Innovation Powerhouse

A look into Puerto Rico’s innovation-driven growth

by Lark Gould

April 25, 2024

Photo: Courtesy of Invest Puerto Rico

Puerto Rico is more than a beautiful Caribbean island paradise. It is a burgeoning center of global innovation. From bioscience and technology to aerospace and renewable energy, Puerto Rico is attracting world-class businesses and investors with its matchless blend of talent, resources, and government incentives.

The U.S. territory is packed with advantages that have rocketed the island to the top in the U.S. for concentration of pharma and medical device experts. It is 6th-highest in the world for concentration of scientists and engineers; and 8th for contract manufacturing organizations with services ranging from biologics to OSD manufacturing, and micro labs services. Puerto Rico is also the top producer and exporter of pharmaceuticals in the U.S., including five of the ten best-selling medicines in the country.

With a skilled bilingual workforce, the island has become a hub of opportunity marking the largest and most diversified economy in the Caribbean and attracting a lineup of world-class businesses in recent years including Microsoft, Oracle, Amazon, Medtronic, Lufthansa, Honeywell, Abbvie, Pratt & Whitney, and many others. Puerto Rico’s strategic geographic location has allowed it to become an international commercial waypoint with an advanced logistics network, anchored by the busiest cargo and maritime airports in the Caribbean.

Bioscience: Fueling Innovation in Healthcare

Photo: Courtesy of Invest Puerto Rico

At the forefront of Puerto Rico’s thriving industries is bioscience with notable strengths found in specialized fields such as drugs and pharma, medical devices, cell and gene therapy, research and development, and agricultural biotechnology. The island plays host to globally recognized companies in pharmaceutical and medical devices, including such industry giants as Amgen, Johnson & Johnson, and Medtronic. These industries are further bolstered by such institutions as Molecular Science Research Center, OcyonBio, and Ponce Research Institute, all contributing to the more than $50 billion in bioscience cargo exported to 140 countries each year.

Energy: Fueling a Sustainable Future

Photo: Courtesy of Invest Puerto Rico

Setting its sights on a sustainable future, Puerto Rico aims to source 100 percent of its electricity from renewable sources by 2050. To achieve this ambitious goal, the island has designated $10.5 billion in federal funds for energy grid enhancements.

While solar is trending globally, there’s a particularly fast-growing market in Puerto Rico, which has seen 110,000 solar rooftop installations connected to the grid, making it the 7th-highest adoption rate of solar energy in the U.S. It continues to grow at a rate of more than 4,000 installations per month.

The island also incentivizes the adoption of green and high-efficiency energy products by offering a 100 percent exemption from excise and sales tax. By investing in renewable energy, Puerto Rico is not only reducing its carbon footprint but also creating a platform for innovation and economic growth in the energy sector.

Technology: Fueling the Digital Revolution

Photo: Courtesy of Invest Puerto Rico

With a favorable income tax rate that is 15 percent lower than the U.S. mainland, Puerto Rico has become a magnet for technology companies seeking a competitive advantage. The island’s tech sector encompasses IT, software development, cybersecurity, SaaS, blockchain, and AI, all made more compelling with generous research and development credits that provide tax savings worth up to 50 percent for all qualifying R&D expenses. With the highest percentage of STEM workers (13 percent) in the United States, Puerto Rico is a breeding ground for innovation and progress, attracting such companies as Amazon Web Services, Wovenware, and Evertec, which have recognized the island’s position as a tech powerhouse.

Aerospace: Fueling the Next Frontier

Photo: Courtesy of Invest Puerto Rico

Puerto Rico’s aerospace industry is aiming for new altitudes with a growing research and development ecosystem in Aguadilla, on the island’s northwest coast. Companies such as Honeywell Aerospace, Lufthansa, Collins Aerospace, and Pratt & Whitney have chosen Puerto Rico as their base of operations. With three cargo ports, including San Juan, Port of Ponce, and Mayaguez, Puerto Rico enjoys supply chain advantages over other jurisdictions. Moreover, it boasts the largest non-contiguous Foreign Trade Zone system in the United States, making it a top technical stop for international flights between the Americas, Europe, and the Middle East.

A Major Player in the Global Marketplace

With its skilled workforce and strategic location, Puerto Rico is not only emerging as the Caribbean hub of innovation, but it is also positioning itself as a major player in the global marketplace with ever-developing infrastructure, talent pools, and incentive program enhancements.