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Regional Startup Ecosystems Must Embrace Distinction

Economic Development, Regional Development, , , , , , , ,

What we can learn from asking of South and Central America

You’re failing. Let me cut to that chase. After more nearly two decades in Austin, Texas, and working with cities and regions throughout the world, what holds YOU and your economy back is that you won’t communicate clearly, distinguish your strengths, and acknowledge your weaknesses. I’ve asked the question repeatedly in my hometown, what specifically does Austin do well in startups, and the answers I get are not only haphazardly all over the place, but they’re also usually non-descript or ignorant: B2B, Enterprise Software, tech, or “we don’t do consumer”

Now, that is a rough sampling of merely my experience with Austin, so let me share with you an experiment I just completed.

I asked this on a half dozen different social networks where I then intentionally tagged people who work in economic development, run startup hubs, direct startup development organizations, or invest, “What are the distinct strengths and weaknesses of the startup ecosystem in your country? Seeking Central and South American countries in particular. Be sure that strengths are unique if you want to be featured; do not submit anything similar to what other countries typically highlight. You must also include weaknesses as the article is meant for organizations that might be able to overcome challenges. Do not refer to horizontals such as ‘tech’ as I’m seeing to understand better where investment in innovation there is best suited (that is, not tech, but for what??).”

All told, I tagged about 400 people over the past few weeks. Very few replied.

Already, without even sharing any of the replies, we have our first and most substantial insight to WHY your ecosystem is failing and what you can learn from this experiment.

No one took the opportunity merely to promote themselves, their work, and their opinion.

Is it that you don’t know? Is it fear of being wrong?

Why would people in your role in the economy in particular, not take every opportunity to promote your county, your region, your city, your hub, and your strengths?? Herein, handed to you to get attention and investor support, neglected.

You’re failing. Startup founders in particular can NOT afford to waste time, attention, and resources on the wrong places, while investors, in the same boat, moreover, will not afford to waste time where it isn’t clear that they should. So, while I hear from governments daily asking how they might better develop their startup ecosystem, the answer foremost is evident: speak up!

Argentina Thrives on Talent

Love this, here’s one I receive from Marco Genaro Palma, Freelance CMO & SEO Consultant, GenaroPalma.com, coincidentally (wonderfully so), just as I shared my own take on Argentina:

As I see it, Argentina’s startup ecosystem thrives on talent but struggles with economic hurdles. The country is known for its skilled tech professionals and innovative entrepreneurs, making it an attractive hub for talent sourcing. However, working with international clients is complicated due to strict currency controls, which limit access to foreign currencies like USD.

High taxes and unpredictable regulations add another layer of difficulty, forcing many entrepreneurs, including myself, to base operations outside the country.

While the talent pool is unmatched, the economic instability makes scaling globally from within Argentina a major challenge.

Marco is exactly right about the challenges and opportunities facing Argentina, and I want to applaud him for saying so, but we’re left wondering what strengths are unique to Argentina (respectfully, talent can be found everywhere).

South America at Large

Nick Esquivel, CEO of Globaltize draws us closer while also taking advantage of the opportunity (kudos!)

At Globaltize, we hire extensively from South America, particularly individuals who’ve previously attempted startups. This entrepreneurial talent brings unique strengths, like agility, resilience, and the ability to navigate resource-constrained environments-traits shaped by the startup ecosystems in their countries. Here’s a closer look at the strengths and weaknesses of startup ecosystems in South America:

Strengths:

1. Brazil: Boasts a massive domestic market, particularly in fintech and e-commerce, driven by digital adoption and innovative payment solutions like PIX.

2. Argentina: A strong tech talent pool with a history of successful unicorns (e.g., Mercado Libre), fueled by high-quality education in STEM fields.

3. Chile: Renowned for its government-backed programs like Start-Up Chile, which offer significant funding and support for early-stage ventures.

4. Colombia: Rapidly growing as a fintech hub with strong regional connectivity and increasing venture capital investment.

Weaknesses:

1. Brazil: Regulatory complexity and bureaucratic red tape can slow business operations and expansion.

2. Argentina: Economic instability, including inflation and currency fluctuations, creates challenges for scalability and investor confidence.

3. Chile: While startups thrive initially, scaling internationally is often limited by the small domestic market.

4. Colombia: Limited access to late-stage funding and mentorship for scaling up beyond local markets.

Globaltize helps address these challenges by connecting South American talent with global opportunities, allowing them to overcome domestic constraints and thrive in international roles. Their entrepreneurial spirit, paired with experience from diverse markets, enables them to contribute meaningfully to organizations worldwide.

Notice the distinctions that help us all? Fintech, ecommerce, education… answers are in there and I’m connecting with Nick now because he’s on the right track about what matters; that, we can uncover financially strengths and weaknesses pretty easily but if you think Money or Tech (generically) is the answer you’re seeking for your economy, you’re wrong. Here we have some insight to Brazil and Argentina that helps understand specifically what we might seek, support, or fund in those countries.

Being transparent about your strengths and weaknesses is CRITICAL to a vibrant startup ecosystem because the entrepreneurs need to know that if they step up and take risks, the advisors, investors, service providers, and potential partners, in the region, will be able to meaningfully help them, or not. If you’re unwilling to dismiss or discount what you don’t do well (which is typical of economic development or inexperienced service providers and investors — because they don’t want to lose an opportunity or disregard *something* that’s there), you’re actually hindering the ecosystem because you’re enabling the entrepreneurs to FAIL more frequently because of misinformation, inexperience, or mismatch.

Latin America Solves Local Problems

Jon Morgan, CEO, Business and Finance Expert at Venture Smarter shares, “Over the years, I’ve worked with several startups in Latin America, and I’ve seen firsthand both the strengths and weaknesses of the region’s startup ecosystem.

One of the key strengths of startups in Latin America is their ability to solve real, local problems. Entrepreneurs are highly focused on creating products and services that directly address challenges in the region, especially in sectors like fintech, edtech, and agritech. For example, in fintech, we’ve seen companies develop innovative solutions that help the unbanked, a large demographic in many countries across the region. This is something that sets the region apart, startups aren’t just focused on profitability but on creating tangible, positive change.

Another strength is the growing support for entrepreneurs. Government policies are slowly becoming more favorable, with programs offering incubators, grants, and accelerators. These programs are helping to nurture early-stage companies, which is vital for the region’s overall growth. There’s a lot of momentum right now in supporting startups and recognizing their role in driving economic growth and job creation.

However, there are weaknesses that can hold startups back. Access to capital remains one of the biggest challenges. While venture funding has been growing, it still lags behind what we see in more developed startup ecosystems like the US or Europe. Many startups rely on informal networks or bootstrap funding, which limits their ability to scale quickly. The risk appetite of investors in the region is often lower, meaning fewer startups are able to secure the funding they need.

Another weakness is the talent gap in key areas like technology and product development. Although the region has many talented individuals, there aren’t enough skilled tech professionals to meet the demands of growing startups. This often forces companies to either invest heavily in training or look for talent outside the region, both of which are costly and time-consuming.

Latin America’s startup ecosystem is full of potential, but it faces challenges, particularly around funding and talent. That said, there are clear signs of progress, and with continued support and investment, these obstacles can be overcome, paving the way for even more growth in the future.“

You Must EXCLUDE and Promote

Let me give you very brief examples from my own assessment of the countries in Central and South America.

Central America

Belize

  • The country has a thriving tourism sector focused on eco-tourism and marine activities, thanks to its rich biodiversity and the Belize Barrier Reef, creating opportunities for sustainable hospitality innovation.
  • Belize struggles with industrial development, particularly manufacturing and large-scale agriculture, which face challenges like limited infrastructure and workforce training.

Costa Rica

  • Costa Rica excels in agriculture, particularly coffee and bananas, and is a global leader in sustainable and organic farming practices, making it an ideal ground for agritech solutions.
  • The industrial sector is relatively weak, with limited heavy manufacturing and dependency on imported machinery.

El Salvador

  • El Salvador has a robust textiles and apparel industry, bolstered by trade agreements like CAFTA-DR, positioning it as a hub for manufacturing innovations.
  • The country’s lack of natural resources and mining capacity limits its industrial diversification, making these sectors particularly risky.

Guatemala

  • Guatemala is a leader in coffee and cardamom production, leveraging its fertile highlands and diverse microclimates to dominate global markets in these agricultural goods.
  • The energy and transportation sectors remain underdeveloped, with inconsistent electricity supply and poor road infrastructure deterring industrial growth.

Honduras

  • Honduras has a strong agro-industrial base, particularly in the production of palm oil and bananas, which are globally competitive exports.
  • Political instability and limited financial infrastructure create significant risks in banking and investment sectors.

Nicaragua

  • Nicaragua has a burgeoning cattle ranching and beef export industry, alongside growing potential in its rum and tobacco production.
  • The country’s energy sector is weak, relying heavily on imports and lacking renewable capacity to meet local demand.

Panama

  • Panama’s strengths lie in logistics and global trade due to the Panama Canal, offering unique opportunities in shipping and port management innovation.
  • The domestic agricultural sector is underdeveloped, with significant reliance on imported food products.

South America

Argentina

  • Argentina’s agricultural sector, particularly its soybean and wine production, is globally renowned, creating demand for innovations in agro-industrial technology.
  • The country’s mining industry is underutilized despite vast reserves, hindered by regulatory and political challenges.

Bolivia

  • Bolivia holds one of the world’s largest reserves of lithium, positioning it as a key player in the future of battery materials and renewable energy applications.
  • The manufacturing sector is weak, with most industries focused on small-scale production rather than large-scale industrialization.

Brazil

  • Brazil dominates in agribusiness, particularly soybeans, sugarcane, and coffee, providing fertile ground for precision agriculture and biofuel innovations.
  • Bureaucratic hurdles and high taxes make the retail and small business sectors risky and underdeveloped.

Chile

  • Chile is a global leader in copper mining and export, which is central to its economy and offers opportunities in resource management technologies.
  • The local automotive manufacturing and heavy industry sectors are underdeveloped, relying heavily on imports.

Colombia

  • Colombia’s flower and coffee industries are key exports, supported by its favorable climate and logistics infrastructure for perishable goods.
  • Security risks and limited infrastructure make large-scale industrial ventures in rural areas precarious.

Ecuador

  • Ecuador excels in the export of bananas, shrimp, and cacao, supported by its favorable climate and strategic ports.
  • The domestic manufacturing sector remains weak, with limited industrial diversification and competitiveness.

Paraguay

  • Paraguay’s hydroelectric capacity, especially through the Itaipú Dam, is a major strength, offering renewable energy solutions to neighboring countries.
  • The country’s weak financial systems and limited access to global markets hinder economic diversification.

Peru

  • Peru is a leader in the mining of precious metals like gold and silver, providing opportunities for sustainable mining innovations.
  • The lack of robust industrial infrastructure makes manufacturing and large-scale production challenging.

Uruguay

  • Uruguay’s strength lies in its high-quality beef and wool exports, driven by its efficient livestock farming practices.
  • The country’s reliance on a small domestic market limits opportunities for growth in large-scale industries.

Venezuela

  • Venezuela has the world’s largest proven oil reserves, making energy exploration and extraction its primary economic strength.
  • Diversified sectors like agriculture and manufacturing are nearly non-existent, hindered by economic mismanagement and political instability.

Understanding the distinct strengths and weaknesses of each country’s economy is critical for economists, economic development professionals, investors, and advisors because it allows them to allocate resources, develop strategies, and foster growth in ways that align with a nation’s intrinsic potential. Knowing these distinctions helps identify where innovation and investment can thrive—such as leveraging Panama’s logistical dominance or Bolivia’s lithium reserves—while also avoiding pitfalls like Guatemala’s weak infrastructure or Venezuela’s lack of diversification. This insight ensures that founders and startups are directed toward sectors where they can succeed rather than waste time and capital in risky or underdeveloped areas. When cities, governments, or other stakeholders fail to be explicit about these realities, they harm founders by creating false expectations, misallocating incentives, and undermining trust in the ecosystem. Transparency about strengths and weaknesses not only equips entrepreneurs to navigate challenges but also builds a robust foundation for sustainable economic development.

Argentina Unleashed: How Reforms Under President Milei Spark Innovation and Entrepreneurship

Regional Development, Startup Ecosystems, , , , , ,

Argentina’s history is one of extremes — a nation that has swung from prosperity to crisis and back again yet always demonstrated an uncanny ability to rebuild and reinvent itself. In the early 20th century, Argentina was among the top 10 wealthiest nations globally, thanks to its fertile agricultural sector, booming trade, and a forward-thinking, immigrant-rich society. While most cities and countries look to “tech” or funding to fuel startups, it’s actually this legacy that leaves the ideal and indelible mark, fostering a culture of resilience and adaptability essential for entrepreneurship.

Part of that culture necessary, is overcoming challenges, bringing us to why Argentina is today situated to thrive in this regard; the late 20th century saw the country grapple with periods of economic turmoil, hyperinflation, and political instability. These challenges cultivated a breed of entrepreneurs who thrive in uncertainty. Argentina’s reputation as a fertile ground for innovation is rooted in its people’s ability to pivot, innovate, and create value despite constraints—a hallmark of successful entrepreneurial ecosystems worldwide.

Periods of economic instability in Argentina, such as the hyperinflation of the 1980s and the financial crisis of 2001, created an environment where traditional industries struggled, and individuals had to turn to creative solutions for survival. The arts, media, and design industries flourished as Argentinians tapped into their cultural richness to generate value. Buenos Aires became a hub for world-class advertising, film production, and graphic design, driven by the need to communicate compellingly in uncertain times. Paramount in appreciating this having happened, is that subtly alluded to already, most regions of the world make the mistake of believing that entrepreneurship is fueled by tech (or STEM education) and sufficient funding. This focus throughout the world is what causes startup communities to languish behind Silicon Valley or cities like Austin, because a stool on which founders sit having only two legs, is a stool that tips over; evident in the world’s most successful ecosystems, is the paramount role of the liberal arts and media. Argentina is situated unlike most of the world in that it’s history in both resilience and creativity, furrows the field in which technology and capital can succeed.

Not all bad, economic instability often forces governments to address critical infrastructure needs, and in Argentina, energy independence became a key focus. Cleantech and renewable energy initiatives were born out of necessity as the country sought to reduce its reliance on expensive energy imports. Argentina’s vast natural resources, including abundant wind in Patagonia and high solar potential in the northwest, offered a way forward. Programs like the RenovAr initiative, launched in 2016, incentivized investment in renewable energy projects. Despite financial challenges, the program attracted international interest, positioning Argentina as a leader in Latin America’s renewable energy sector. By 2024, the government under President Milei has signaled a continued commitment to deregulation in the energy sector, aiming to lower barriers for private investment in cleantech.

Before we get there, let’s stuck with why Argentina has fertile ground. Their financial crisis of the early 2000s devastated Argentina’s banking system, pushing consumers and businesses to adopt alternative means of commerce. This disruption set the stage for e-commerce to thrive. MercadoLibre, founded in 1999, emerged as a regional leader by providing a reliable digital marketplace amidst the chaos. Its success demonstrates how economic instability can spur innovation when traditional systems fail to meet public needs. The growth of ecommerce was also supported by widespread mobile penetration and Argentina’s highly educated population, which adapted quickly to digital tools. By solving problems like unreliable payment systems and limited consumer access to goods, companies like MercadoLibre turned crisis into opportunity, building scalable solutions that now dominate the Latin American market.

That unreliable payment system brings us to overcoming that as well as the challenges Argentina’s history of economic exclusion, marked by high inflation, volatile exchange rates, and limited access to credit. Millions of Argentinians, long excluded from traditional banking systems, embraced digital financial tools that offered convenience, security, and accessibility. Startups like Ualá have capitalized on this need, offering simple yet effective solutions like prepaid cards and mobile banking apps, demonstrating how fintech can address systemic failures, providing services that help individuals and businesses navigate financial instability.

Government’s Role in Building Modern Economies

Let me diverge a bit to point out that a government can be part of the solution or part of the program, and in either case, entrepreneurs will find a way forward but what that means is that communities need to be working with their government, and experts like me who work in economic development for startups, to keep government out of the way. Economic turmoil often forces governments to focus on the foundational elements of a modern economy: infrastructure, financial systems, and digital access. In Argentina, successive administrations recognized the need to create conditions for innovation and entrepreneurship, even in difficult times. Key actions included:

  • Digital Infrastructure: Investments in internet access and mobile networks expanded connectivity, enabling the rise of e-commerce and digital banking.
  • Legal Frameworks: Policies like the 2017 Entrepreneurs Law simplified company formation and provided financial incentives for startups.
  • Support for Emerging Sectors: Government programs targeted renewable energy, creative industries, and technology as areas with high growth potential.

That Entrepreneurs Law, by the way, is worth learning more about. Tax cuts and loans, incentives for STEM professionals, incubators, and infrastructure, brought about through Argentina Delivers, U.S. Embassy of the Argentine Republic, Argentine Investment Trade and Promotion Agency, and Argentina’s Ministry of Foreign Affairs, Trade, and Worship, leads by example showing how governments can make wise investments that enable people to start companies that change the world (and *create* jobs).

Under President Milei, this trend has continued with a focus on deregulation. By reducing bureaucratic red tape and allowing markets to operate more freely, Milei’s administration is doubling down on the belief that innovation flourishes when individuals and businesses have the freedom to solve problems.

Argentina’s journey shows that adversity can be a catalyst for innovation. Economic turmoil and political instability often force people and governments to find creative solutions, prioritize essential industries, and embrace new technologies. In Argentina, these conditions gave rise to thriving creative industries, a renewable energy revolution, and transformative fintech and e-commerce ecosystems. With a government now committed to liberal principles of economic freedom, Argentina is poised to continue its legacy of innovation, proving that even in the toughest conditions, entrepreneurship can not only survive but thrive.

Engineering, Technology, and Invention: Argentina’s Strengths

Argentina’s influence on global innovation today goes well beyond its renowned agricultural exports and tango-infused culture. It is a country that has contributed meaningfully to engineering and technology. Primarily:

  • Nuclear Energy: Argentina is one of the few countries in the world with indigenous nuclear reactor technology, developed through INVAP, an Argentine engineering and research firm. INVAP’s advancements in space exploration and nuclear energy exemplify Argentina’s deep technological expertise.
  • eCommerce and Fintech: Argentina’s tech ecosystem is robust, led by companies like MercadoLibre, the eCommerce juggernaut reshaping retail across Latin America. Meanwhile, Ualá has tackled financial inclusion, bringing millions of Argentines into the formal economy with its mobile banking solutions.
  • Creative Industries: Argentina’s film and advertising industries are world-renowned, reflecting a creative spirit that lends itself to innovation in marketing and media tech.

Argentina’s government has also nurtured advancements in biotech, renewable energy, and blockchain. These industries benefit from a highly educated workforce and a culture that values creativity, independence, and bold thinking.

Libertarian Policies and the Power of Deregulation

Under President Javier Milei’s libertarian leadership, Argentina is embarking on a bold experiment in economic freedom. Milei, an economist and outspoken advocate for free markets, has dismantled regulations, privatized industries, and reduced government spending in his efforts to unleash Argentina’s entrepreneurial potential.

Globally, the correlation between economic freedom and entrepreneurial success is well-documented. The Index of Economic Freedom by The Heritage Foundation consistently shows that countries with higher levels of deregulation and market freedom outperform their heavily regulated counterparts in innovation, GDP growth, and entrepreneurial activity. For example:

  • Hong Kong and Singapore have long been ranked as two of the freest economies globally and are hubs for entrepreneurial activity, boasting high levels of startup formation and venture capital inflow.
  • Ireland, another deregulated economy, has become a magnet for global tech giants like Google and Facebook while fostering its own thriving startup scene.

Argentina, with its deep pool of skilled labor and a renewed focus on economic freedom, is poised to follow suit. Milei’s reforms have included simplifying the tax code, eliminating bureaucratic hurdles for starting businesses, and reducing barriers to foreign direct investment—critical steps in encouraging both local and international entrepreneurship.

As a result, the venture capital scene in Argentina has grown significantly over the past decade, with local and international investors recognizing its potential. Funds like NXTP Labs, Draper Cygnus, and Kaszek Ventures have played pivotal roles in fueling Argentine startups. Kaszek, for instance, is one of the largest and most successful VC firms in Latin America, having invested in MercadoLibre and other regional unicorns.

Accelerator programs, such as Startup Buenos Aires and IncuBAte, provide entrepreneurs with the mentorship, funding, and networking opportunities to scale globally. Meanwhile, government-backed initiatives like the Entrepreneurs Law offer grants and financial incentives for startups focused on high-impact industries like technology and sustainability.

Cultural Richness Drives Economic Opportunity

Entrepreneurs are not only drawn to Argentina for its economic prospects but also for its unique culture and quality of life. Buenos Aires, often called the “Paris of South America,” is a bustling metropolis blending European elegance with Latin American vibrancy. The country’s renowned cuisine, wine regions, and breathtaking natural landscapes—from Patagonia’s glaciers to Iguazú Falls—offer a lifestyle that is hard to match.

Argentinians themselves are celebrated for their creativity, resilience, and passion. These qualities make them ideal collaborators in any entrepreneurial venture, with a mindset that embraces problem-solving and innovation.

In 2024, Argentina and the United States began exploring a free trade agreement under the leadership of President Milei and the incoming Trump administration. This agreement signals Argentina’s intent to deepen its ties with major economies, leveraging its vast resources and strategic location. Such a pact could enhance Argentina’s export capabilities while creating opportunities for cross-border startups in agritech, AI, and fintech.

Free trade agreements historically reduce barriers for entrepreneurs, creating access to larger markets and encouraging foreign investment. For Argentina, this represents a critical step in attracting global businesses and fostering its own startup ecosystem.

President Milei has ignited a new wave of entrepreneurial optimism but it’s the history of the country, both the spirit of resilience, the clear industry strengths, and the culture of creativity that teaches the rest of the world what enables liberal government to foster entrepreneurship. Its deregulated environment, thriving venture capital scene, and vibrant cultural fabric make it an ideal destination for innovators seeking a dynamic and welcoming ecosystem.

Given Argentina’s history of resilience and innovation under pressure, what more can entrepreneurs and investors learn from its successes and failures — and how might these lessons shape the way we approach building businesses in volatile or deregulated environments? What is your experience (or your struggle) in your country?

Puerto Rico: The Crossroads of U.S. Access, Global Innovation, and Island Resilience for Startups

Regional Development, , , , , , ,

Puerto Rico’s history is one of resilience, adaptation, and strategic importance. As a U.S. territory since 1898, Puerto Rico enjoys a unique position: it benefits from U.S. federal systems and protections while maintaining its cultural and legislative autonomy. This blend offers startups and entrepreneurs an unparalleled advantage — access to U.S. markets, legal frameworks, and capital, paired with the tax incentives and cost efficiencies of operating in Puerto Rico.

After World War II, Puerto Rico launched Operation Bootstrap, wonderfully using the term “bootstrap” well before its population in modern entrepreneurship, then, in transitioning its economy from agriculture to manufacturing, and later to services and innovation. This foundation fostered a culture of ingenuity and resourcefulness — traits critical for entrepreneurship. Today, the island’s tax-friendly policies, such as Act 20 and Act 22 (now consolidated into Act 60), provide additional fuel, offering incentives to companies and individuals who relocate to the island.

Puerto Rico in Innovation

The Commonwealth has emerged as a quiet powerhouse in several areas of technology and engineering. Historically, the island played a pivotal role in the pharmaceutical and biotech industries, hosting manufacturing facilities for global giants such as Pfizer, Amgen, and Johnson & Johnson. Its highly skilled STEM educated workforce, combined with affordable labor costs, makes it an ideal hub for innovation in advanced manufacturing and biopharma.

Puerto Rico has also become a significant player in renewable energy innovation; in which, with my roots in Texas, my attention was first drawn. In the aftermath of Hurricane Maria, the island adopted a proactive stance on rebuilding its energy infrastructure. Microgrids, solar energy initiatives, and resilient power systems have attracted clean tech startups eager to test and scale solutions.

As with most of the world in the time passed since internet experience emerged beyond Silicon Valley, the ecosystem in Puerto Rico is maturing, with emerging strengths in software development, fintech, and blockchain. Much of our assessment is drawing from the impact of the strong university system, particularly the University of Puerto Rico, which consistently produces top talent in engineering and computer science.

  • At the UPR Medical Sciences Campus, the Biomedical Innovation Unit (BIU) plays a pivotal role in promoting biomedical research with commercial potential. The BIU assists in identifying ongoing research activities that can be commercialized and supports the protection and commercialization of new and existing patents.
  • The UPR Mayagüez Campus (UPRM) is renowned for its engineering programs and research centers. The College of Engineering offers advanced laboratories for teaching and research, focusing on areas such as fatigue and fracture analysis, product design, and manufacturing processes. Research initiatives include the development of solar-powered vehicles, satellite imagery analysis for earth phenomena, and environmental impact studies of industrial toxins.
  • UPR fosters innovation and entrepreneurship through various programs and centers. The Center to Foster Innovation and Commercialization adapts programming to support local entrepreneurs, helping them pivot and excel in changing environments. The Business and Economic Development Center (BEDC) at UPRM offers resources and support for business development and economic growth

More, UPRM is a significant center for tropical marine science research. Facilities like the Puerto Rico Water Resources and Environmental Research Institute and the Caribbean Coral Reef Institute (CCRI) support studies in marine ecosystems, water quality, and environmental conservation while The Puerto Rico Seismic Network, based at UPRM, monitors seismic activity in the Caribbean region, providing critical data for understanding and mitigating earthquake risks.

Recent Developments in Startups and Venture Capital

Puerto Rico has caught the attention of major venture capital funds and accelerators, most notably Rebel Fund., which has launched a $175M seed-stage venture capital fund located in San Juan, Puerto Rico, and investing exclusively in Y Combinator startups. Rebel Fund’s work is rooted in the Rebel Theorem, which posits that the best way to identify and support transformative startups is to find and back individuals who are intrinsically motivated to solve significant problems. The theorem suggests a heavy reliance on data-driven analysis and rigorous founder evaluation — methods that align well with Puerto Rico’s emerging culture of high-quality, purpose-driven entrepreneurship.

“Rebel Fund has now invested in nearly 200 top Y Combinator startups, collectively valued in the tens of billions of dollars and growing. As an extremely data-driven fund, along the way we’ve built the world’s most comprehensive dataset of YC startups outside of YC itself, now encompassing millions of data points across every YC company and founder in history.” – Jared Heyman, Managing Partner

In addition to Rebel Fund, programs like Parallel18, an internationally recognized accelerator run through the Puerto Rico Science, Technology & Research Trust, have contributed to Puerto Rico’s reputation as a startup hub. Parallel18 not only provides funding but also access to mentorship and a global network. The island’s government has doubled down on these efforts with initiatives such as Invest Puerto Rico, which seeks to attract foreign investment and foster local economic growth through entrepreneurship… I just need one of Parallel18’s t-shirts: #workhardplaytropical

Puerto Rico’s vibrant culture is one of its greatest assets. Its unique blend of Spanish, African, and Indigenous influences is reflected in everything from music and art to cuisine. The island is home to world-famous beaches, a thriving culinary scene, and rich historical sites like Old San Juan.

For entrepreneurs, this cultural richness translates into a creative and energetic environment. Networking events are just as likely to happen at beachfront cafés as in boardrooms, fostering a laid-back yet productive atmosphere. English and Spanish are widely spoken, making it easy for U.S.-based entrepreneurs to integrate while benefiting from bilingual and bicultural talent.

The island’s sense of community and pride also extends to its startup scene. Founders, investors, and policymakers are deeply invested in Puerto Rico’s future, creating a collaborative ecosystem where partnerships are encouraged and celebrated.

How to and Why Work with Puerto Rico in Innovation

Puerto Rico’s status as a U.S. territory means businesses operating there have direct access to the U.S. market — the largest consumer economy in the world — without the complications of international trade barriers like tariffs, customs, or additional regulatory hurdles. Startups can scale and export products or services to mainland markets seamlessly while enjoying the protections of U.S. intellectual property laws, a stable currency (the U.S. dollar), and federal agencies such as the FDA and SEC. Puerto Rico offers a unique mix of tax benefits, such as low corporate taxes under Act 60, without losing the security of U.S. financial and regulatory systems. For entrepreneurs, this means they can enjoy cost savings similar to those in international tax havens, but with the reliability and transparency of operating under U.S. governance.

Cultural and legislative autonomy allows Puerto Rico to retain its distinct heritage, language, and identity, creating a bilingual environment where English and Spanish fluency are common. This positions Puerto Rico as a bridge between the U.S. and Latin America, ideal for companies looking to expand into global markets. Businesses based there can tap into diverse perspectives and operate effectively in both English-speaking and Spanish-speaking markets. While businesses in Puerto Rico must comply with certain U.S. labor laws, the island also has unique legislation that provides additional flexibility. For example, wage structures and work-hour requirements are often more favorable to startups and small businesses than those in the mainland U.S., allowing for cost-effective scaling of operations.

Resilience and Entrepreneurial Mindset

Autonomy has fostered a sense of community-driven problem-solving and resilience, especially in the wake of the natural disasters of hurricanes. This culture of ingenuity and adaptability makes the local workforce and entrepreneurial ecosystem particularly dynamic. Startups that base themselves in Puerto Rico benefit from working in an environment where innovation is often driven by necessity and collaboration. For international entrepreneurs, Puerto Rico offers the credibility of a U.S. jurisdiction while still feeling distinctively global. It provides a safe and regulated platform to test ideas, attract international capital, and establish credibility with U.S. investors while maintaining flexibility in operations.

To engage, tap into its networks and incentives. Startups and investors can explore the tax benefits of Act 60, which offers significant reductions on corporate income tax and personal income tax for qualifying businesses. Partnering with accelerators like Parallel18 or connecting with Rebel Fund can provide access to resources and mentorship.

What I can offer is that I’d love to hear from everyone there, there seems to be much more that can be done for entrepreneurs, together.