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Published Monday, November 30, 2020
Costa Rica grows as a manufacturing
hub, agency says
By the A.M. Costa Rica staff
As covid-19 began to spread across the world, it quickly became clear there were critical supply shortages of the equipment needed to fight the pandemic. The Ford company quickly sprang into action, transforming one of its production lines to assemble artificial ventilators for intensive care patients.
The auto-making giant turned to MicroTechnologies, which delivers engineering solutions for the automotive, medical device and aerospace industries. The company, located in the RC Logistics Condominium in Alajuela Province, was soon manufacturing two of the ventilator’s key components, producing nearly 100,000 pressure and vacuum switches for export to the US.
It hasn’t been an easy year for the global manufacturing industry. In the months following the outbreak of the virus, the sector has endured a sharp decline in production, with sites shuttered and supply chains pushed to breaking point.
As demonstrated by the MicroTechnologies company and its ability to pivot production processes at such dramatic speed, the power to leverage Industry 4.0 technologies has proven critical for restarting and adapting operations.
“Not so long ago, having an OEM with an R&D office in Costa Rica was a dream; now it is the norm,” said Daniel Araya, MicroTechnologies’ sales director for medical devices. “This only proves that we have established ourselves in a country that is a hub for product development.”
In recent years, investment in digital tools - such as robotic process automation and artificial intelligence - has been utilized to make manufacturing operations more efficient.
Manufacturers that had already begun putting these solutions in place, and markets with a track record of enabling them to do so, have benefited from being able to swiftly resume operations.
According to the Costa Rican Investment Promotion Agency, CINDE, Costa Rica has been at the forefront of the digital transformation for more than a decade and is well placed within these specialist sectors.
"Adoption of new technologies, combined with its geographical and demographical advantages, puts the country in a strong position to exploit shifting priorities and advancements in manufacturing strategies and investments," said the agency in its statement.
Today, a significant proportion of foreign direct investment into Costa Rica is concentrated in smart manufacturing, consisting of advanced manufacturing and the life sciences sector. Since 2017, medical devices have become Costa Rica’s number one export product, overtaking the agricultural sector for the first time.
According to CINDE, the country is now the second-largest exporter of medical devices in Latin America as well as the top exporter per capita in the region, and home to more than 70 medtech companies, including Boston Scientific and Medtronic. Eight such companies are in the top 20 exporters in Costa Rica, representing $2.699m in medical device exports in 2019.
The products manufactured by these organizations have evolved over the years from predominantly low-quality disposables in the early 2000s, to a wide range of class I to III devices, such as surgical, aesthetics, optics and cardiovascular tools.
"This evolution would not have been possible without Costa Rica’s highly-skilled, multilingual workforce," said CINDE.
According to the agency, in 2019, the country was home to nearly 30,000 employees in the medtech sector, a figure that has increased by an average of 14% annually since 2009.
Between 1999 and 2019, the average output per employee went from $76,000 to $122,000, growing by 61%, said the agency.
The Association for the Advancement of Medical Instrumentation (AAMI) joined forces with CINDE earlier this year to bring new training programs to the country.
“Costa Rica has become a hub for medical device manufacturers, with three major medical device campuses near San José – many of our members have a footprint there,” said Brad Schoener, VP for Innovation at AAMI. “We started bringing new training courses to these campuses because we believe Costa Rica has a role to play for the global medtech industry.”
The AAMI now offers more than 18 courses on topics ranging from software and cybersecurity to quality and regulatory assurance.
As these new companies expand in the country, unemployment continues to be one of the most critical issues in the country. According to the Employment Survey, from June to August, of the National Institute of Statistics and Census, the unemployment rate was at 23.2%, meaning the unemployed population reached 544,000 people.
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Should authorities increase training opportunities for unemployed people to help them find work with international corporations in Costa Rica? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com
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