The Remarkable Rise of Costa Rican Business Services Exports
In the last ten years, Costa Rica has witnessed a remarkable surge in the export of business services, recording a 163% increase from 2013 to 2022. This growth, documented by the Promotora de Comercio Exterior de Costa Rica (Procomer), signifies a significant shift in the country’s economic landscape. The escalation in service exports, particularly in areas like finance, call centers, and technology, has reached an impressive $5.4 billion, according to Procomer’s data.
Employment Expansion in the Service Sector
Parallel to the rise in exports, there has been a substantial increase in employment within the sector. Jobs in service exports, especially within the free trade zone regime, have risen by 210% over the same period. This employment surge reflects the expanding role of Costa Rica in the global services market, particularly in high-value sectors.
Costa Rica: A Regional Leader in Modern Service Exports
The Economic Commission for Latin America and the Caribbean (Cepal) ranks Costa Rica as the fourth-largest exporter of modern services in the region, trailing only behind Brazil, Mexico, and Argentina. These services encompass various business activities, indicating Costa Rica’s growing prominence in this domain.
Public-Private Partnerships Fuel Growth
José Manuel Salazar, the executive secretary of Cepal, attributes this growth in modern services to effective public-private partnerships. These collaborations have been crucial in attracting foreign investment, supplemented by free trade agreements, export promotion, and a skilled workforce capable of providing high-value digital services.
Shift in Responsibilities and Challenges Ahead
The transfer of foreign direct investment (FDI) attraction responsibilities from the Costa Rican Coalition of Development Initiatives (Cinde) to Procomer marks a significant shift in strategy. This move, initiated by President Rodrigo Chaves’ administration, aims to streamline efforts in promoting FDI and service exports.
The Role of IED in Sustaining Growth
Economist Luis Vargas and Cinde’s Investment Climate Director Vanessa Gibson emphasize the contribution of FDI promotion to the sustained growth of service exports. This growth reflects the Costa Rican economy’s shift toward higher levels of specialization and diversification.
Diversification and Sophistication of Services
Costa Rica’s service exports have diversified over time, beginning with the promotion of contact centers in 2000. Today, the sector offers a more sophisticated range of services, including financial, accounting, supply chain, human resources, and information technology services.
The Human Factor in Service Export Success
Laura López, General Manager of Procomer, highlights Costa Rican talent as a key driver of new company arrivals. Economist Luis Mesalles adds that the ease of training Costa Rican personnel and proximity to the United States further contribute to the sector’s success.
Demographics and Skills in the Service Sector
The average age of employees in the service sector is 27, characterized by language skills and digital education. Gibson proposes tapping into the older population’s talent through training programs.
Exports Beyond Traditional Services
Procomer’s data shows that service exports encompass a broad range, including manufacturing services, maintenance and repair, transportation, travel, construction, insurance and pension services, financial services, charges for the use of intellectual property, telecommunications, computer services, business services, and personal, cultural, and recreational services.
The Future of Costa Rica’s Service Exports
Looking ahead, Costa Rica’s role in global service exports seems poised for continued growth. The sector’s dynamism is evident in the free trade zones, with 497 companies operating, of which 314 are service companies. The Cepal report underscores that modern services have been the most dynamic segment of global service trade in the past two decades, suggesting a bright future for Costa Rica in this arena.
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