Can Costa Rica Catch Up with Chile?
Last November, Costa Rica joined the global movement to unleash startups by celebrating Global Entrepreneurship Week (GEW). The response surprised its local champions. Costa Rica´s host, Yo Emprendedor, managed to get strong support from 28 key partners from across the private, public, NGO and education sectors—including the Ministry of the Economy, the largest media group in the country and angel investors.
Students responded enthusiastically to the campaign, judging by the wide participation in GEW events. The National Business Plan Competition Yo Emprendedor, for instance, brought to light 200 startup projects for everything from specialty foods to innovative wind turbines. This means something in a country where tradition dictates that university graduates should get a ‘real’ job with either an established, national company or with one of the many multinational corporations that came to Costa Rica for its educated workforce and proximity to the United States.
Multinationals themselves are eager to see Costa Rica´s creative potential flourish. Cisco decided to invest in 2010 by opening a Cisco Entrepreneur Institute in the country with two important local entrepreneurship actors, ITS InfoCom and Parque Tec. ITS InfoCom is a local entrepreneurship success story, established in 1998 by a group of Costa Rican investors who identified opportunities in the demand for outsourcing, and now employs 800 people across the region. Parque Tec in turn has been one of the major entrepreneurship promoters in the country. This non-profit organization founded in 2004 is the country´s first business incubator, focusing in the tech sector. Parque Tec now partners with the Global Entrepreneurship Consortium to try to start taking the pulse of startup activity in the country.
These three actors in the local entrepreneurship ecosystem, along with Yo Emprendedor, have started to fill a gap in entrepreneurship awareness and education. There is also a Startup Costa Rica movement afoot. But according to local accounts, those who choose the entrepreneurial path face cultural bias, fear of failure, lack of sufficient or formal funding sources for startups, bureaucratic hurdles and of course, steep competition for talent and clients from the larger, established local and foreign companies, in a market that is already rather small.
However, the situation is starting to change. According to a few successful entrepreneurship pioneers interviewed for a series about the current entrepreneurship scene in Costa Rica, when they started a decade ago, Costa Rica was a desert for entrepreneurs. While the Costa Rican university system is still not a source of new businesses, many universities have started to offer incubators for tech projects, Startup Weekend and other entrepreneurship activities are more common and an increasing number of young people are willing to bootstrap it to try out their concepts on the market. Can Costa Rica become the next Chile?
Costa Rica has plenty to make it appealing to startup junkies. It has a lot of homegrown talent—being ranked highly for education among Latin American nations. And in terms of top talent staying (whether local or foreign), it is a great place to live with beautiful beaches, weather and the rainforest. It is also near to the United States. There are also many angel networks emerging in a nation which is not short of people with deep pockets looking for ideas to fund.
GEW / Costa Rica aims to help drive broader public interest in supporting a startup culture. We will be watching to see if startup movements can make a difference.