Woowho!!! We're #36, we're #36! - Puerto Rico debuts in Global Competiveness Report

For the first time ever, the World Economic Forum (WEF) has included Puerto Rico in their Global Competiveness Report. Even getting listed, I'm sure, is an honor and mainly a tribute to many hard working people locally that lobbied the WEF to get Puerto Rico included. To come out in 36th position, and 2nd overall in the Latin America region is an honor indeed. I'm ecstatic that we faired so well. But, being the cycnic that I am, I'm left with an unusual taste in my mouth. Sort of like the cheap syrup I recently bought for the MC Don Dees household which promises buttery maple syrup taste, but manages to leave a medicine after taste. Funny how something that seems so sweet (#36) can end up tasting like medicine.

Is this a victory?

The first thing that unsettles me is how the media are making this look like a victory. Victory as in a win, that is unless you count our number 1 ranking for the best place (in terms of cost) to fire someone. I'm not saying this is a loss either. I'd say it should feel something like a tie and who celebrates a tie? It is without a doubt, an outstanding achievement, but where do we go from here? The uncomfortable thing about measuring something is that it permits everyone to start tracking progress. What will happen in next year's report? How will it compare with this year's ranking? Will we ask to be removed from the report if our ranking starts to slip?

But let's turn this around and ask another question. According to El Nuevo Dia, this is proof of the strengths of Puerto Rico as a destination for investment. Let's say for a second that you had $5 million to invest in the stock market. At your disposable you have a generalized ranking of 131 stocks. Where would you put your money? Would you put it in the top ten rated stocks or would you dive down to number 36? Let's say you are interested in investing in Latin America, who would you choose #1 or #2? Of course, you'd pick #2 over the remaining 10 entries below it, but I wonder how Latin America stacks up with other regions? For me, this report does not give a clear sign of why Puerto Rico is a good place to invest.

How about this question. If Puerto Rico is such a good place to invest, why don't more local companies invest here? We rank 34th in R&D by companies.

Says who?

The report evaluates each country on a range of factors organized into general categories (called pillars). There are approximately 104 factors, 25 of which are based on hard data. The remaining 75% is based on interviews of executives. Let's not forget that surveys can be wildly misrepresentative, but generally useful. It all depends on who you ask. According to James Surowiecki, author of the book "The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations", the first thing required in obtaining a wise viewpoint on something is diversity of opinion. Do you think that gainfully employed, well compensated, executives is a sufficiently diverse crowd from which to gauge the healthiness of an economy?

Surprises and What Else is New?

Looking through the "National competitiveness balance sheet" for Puerto Rico there are a few surprises and some "No Shit, Sherlock" (NSS) entries. Here were the most interesting:

  • NSS Entry # 1: In the first pillar, Institutions, Puerto Rico ranks 130th for "Burden of government regulation" and 105th for "Wastefulness of government spending". We need leadership that has the balls and mental fortitude to stand-up to organized labor and public appeal to clean out the government (and I'm not talking about the politicians). I agree 100% with our good friend "Gil the Jenius" and his recent call to reduce the government in his post "Government Solutions - Part 1".
  • NSS Entry #2: Staying in the same pillar, Puerto Rico ranks 67th in "Favoritism in decisions of government officials" and 64th in "Transparency of government policymaking". We are desperate for some strong leadership to reverse these two trends. Unfortunately, none of the four leading candidates for Governor fits that description.
  • NSS Entry #3: In the 3rd pillar, Macroeconomic stability, Puerto Rico ranks 124th (almost last) in "National savings rate". This is one of the few rankings based on hard data. I can only imagine that the poorest of the poor African nations save less than we do. But of course, the per capita GDP of the last place country on the list is only $1,600 per year. What does this say about our individual abilities to prosper in the future?
  • NSS Entry #4: In the 5th pillar, Higher education and training, Puerto Rico ranks 90th in the "Quality of math and science education", 60th in overall "Quality of the educational system", 57th in "Internet access in schools", and 39th in "Quality of management schools". The crisis here, is that if we don't improve in these areas our prognosis for sustaining our position or climbing in the ranking of world economies is very low.
  • NSS Entry #5: In the 6th pillar, Goods market efficiency, Puerto Rico ranks 94th in the "Extent and effect of taxation". Are you getting that bitter mediciney taste in your mouth yet? Let's just summarize: Our primary economic disadvantages by saying, for the most part our Government is the number one obstacle from having a more competitive economy.
  • Last NSS Entry, #6: In the 11th pillar, Business sophistication, Puerto Rico ranks 9th, in the "Extent of marketing". Holy over-stating the obvious Batman. Next thing you're going to try and tell me is that Puerto Rico is surrounded by water. On one hand I agree with this completely. I believe that the ability of marketers to motivate local consumers is very sophisticated. My worry is that this marketing goes on much more than we want to believe, like the media latching onto the report of Puerto Rico doing well in their debut in the global competitiveness study and trying to sell it as Puerto Rico having one of the best economies. Just how do you define best? On the other hand, as I've been ranting about lately. Puerto Rico ranks far behind in their acceptance of online marketing.
And quickly here are a few items I found that were surprising (remember a high ranking is good and a low ranking is bad):
  • 7th in "Time required to start a business", really, really?
  • 92nd in "HIV prevalence" This seems wrong. By placing us near Africa in terms of the impact of HIV, you'd think we would hear more about this problem.
  • 1st in "Malaria incidence", we have the lowest occurrence of Malaria? Who would of figured?
  • 94th in "Female participation in labor force". Being a dude, this is one I wouldn't have picked up on. Would any of our female readers care to comment?
  • 14th in "Broadband Internet subscribers". While this is based on hard data, it seems very wrong.
I'm going to continue digging into this report and share with you what makes sense. Of course, you'll be the first to hear if I think someone is spinning this into something it isn't. Which is why I had to write about the report in the first place. Now, just like my kids, I'm going to go get some water or juice to get rid of the bad taste I have in my mouth. Yeeecchhh!