Cuba is not a good example of a model based on knowledge and intellectual assets as sources of competitiveness and long-term economic growth.
The islands centralized economic planning and over-reliance on tourism, remittances and more recently the controversial exports of medical services, has so far ruled out technological innovation, with a few exceptions: local biotechnology industry exports drugs to global markets and has produced five vaccine candidates against Covid-19, three of which have emergency regulatory approval.
But amid the worst economic crisis in 30 years and the continuing impact of the pandemic, the Cuban government is trying to update its technology policy and approach to innovation.
Science and technology parks are a new addition to the new strategy. Today, the Havana Science and Technology Park (PCT), headquartered in University of Computer Sciences (UCI), is fast becoming a leading innovation ecosystem on the island.
PCT, inaugurated in 2020, plans to function as an incubator, effectively integrating universities, research centers, foreign capital, local startups as well as state resources.
“The Park tries to provide a framework for all high-tech projects developed by UCI professors, alumni and students. It will also reach out to small private startups, providing a legal and flexible framework with adequate infrastructure to incubate all kinds of businesses and produce high-value products and services, ”said Sandra Madiedo, Havana-based digital strategy consultant and founder of Archipelago Startapero which follows the evolution of the Park since its opening.
Highlighted Cuba’s quality human capital
Cuba has long been hailed as a educational center in Latin America. However, the Caribbean country has yet to see the full results of its investment in education. The constant brain drain, the limitations of private initiatives and the state’s monopoly on the exercise of professional services mean that Cuba’s human talent has not been able to flourish.
Despite this, the country is known to have an underground outsourcing ecosystem with an endless supply of developers providing services to overseas clients. This previously informal service delivery arrangement is now being formalized with the help of the PCT, which provides the space and work environment for these types of technology services and jobs.
Foreign companies are already taking advantage of the opportunity to hire local talent in Cuba. This is the case of SMaBiT, a European company which becomes the first international client of the PCT. SMaBiT develops integrated hardware for smart home sensors, industrial gateways and security cameras, as well as network platforms for IoT device management and video analytics.
“In 2018, we were looking for development resources for our software and hardware products. After looking at places like Mexico and Colombia, we decided to go to Cuba. At the start, we hired freelancers, mostly private individuals working from home, ”said Peter Hoyer, Managing Director of SMaBiT.
“But we wanted structure. The aim was to fully employ our staff and provide the right environment for them and our clients. Now we have an office at the PCT with nine people and we are looking to expand, ”Hoyer added.
PCT relies on the technical talent trained at the UCI as well as on the personnel hired by the companies established in the Park.
“The talent coming out of the UCI is highly qualified. We have one of the highest rates of STEM graduates in Latin America. It’s great to see that they can now be exposed to international business practices and new technologies, ”said Madiedo.
For Hoyer, the hiring process can be a barrier for foreign companies entering the Cuban market without previous experience.
“You wouldn’t expect this from Cuba as the country has no computer manufacturing exports, but the knowledge here is excellent” – Peter Hoyer
“PCT does not provide strong talent search capabilities for specific functions and expertise. If you already have independents in Cuba, the Park is a great way to formalize them. Realistically, outsourcing the hiring and management of employees to the park has limits as a business practice, but if you can find the right people the results are great.
The company started its Cuban experience by hiring software developers, but then found strong computer engineers in areas such as PCT system design.
“You wouldn’t expect that from Cuba because the country doesn’t have any computer manufacturing exports, but the knowledge here is great,” Hoyer said.
New technologies, new opportunities in Cuba
The Park has already signed around forty projects prioritizing strategic areas such as big data and data analysis, the electronics industry, cybersecurity, energy efficiency and solutions for health and the pharmaceutical industry. The agreement with AlaSoluciones, a local private company developing technological solutions for agriculture, security and other industries, has raised expectations about the park’s potential to generate high impact products.
Other registrations include EMSI Farma, which works on the automation of already existing processes, in particular in the field of health. The small Havana-based company developed the main software behind the fans used in Cuba to treat patients with Covid-19.
“The park is also a great opportunity for Cubans. The Park acts as a kind of sales representative for local businesses and employees and takes care of legal and other matters. The park then takes a small, fixed percentage of all revenue as a management fee, ”Hoyer explained. “We get a lot of benefits in return. We can import all the material we need without tariffs or limitations.
The TCP offers opportunities and conditions similar to other such initiatives in Latin America and the Caribbean. “At the moment, the park’s objectives and legal framework are very similar to those of other technology parks around the world,” Hoyer added.
For Madiedo, the only thing to worry about might be how disconnected the PCT is from international business practices.
“I believe that she is still a little detached from the commercial logic that prevails in the world. Until now, many companies have legal support, access to infrastructure privileged to a few. We need to study very carefully the issues related to unfair competition and how it will affect services and products in the local market and exports, ”she said.