The medtech economy in Costa Rica is one of its fastest-developing sectors, with the transformational growth seen over the past 20 years continuing to gather pace. Health Tech World learns more about the country’s burgeoning reputation in medtech on a global scale
In 2017, medical devices became Costa Rica’s top export, surpassing the agricultural sector for the first time in the country’s history, with exports set to hit $5billion by the end of 2021 – increasing by over $1.3billion in just three years.
Such statistics are not only impressive, but are indicative of the huge efforts being made by the country to build this emerging sector, transforming it from a minor part of its economy to one of the fastest-growing areas in barely two decades.
Costa Rica is now home to nine of the world’s top 20 global original equipment manufacturers (OEMs) with more than 81 other medtech businesses also choosing to be based there.
The top industrial export good in 2020, medical devices now account for 35 per cent of total exports, up from 16 per cent in 2004. And with 15 trade agreements in place, with two more in process including with the UK, the export route for multi-nationals from Costa Rica is an attractive option.
Inward investment is ongoing, with recent arrivals including Nextern and ADMEDES, while others including Viant, SMC and MicroVention all investing in the expansion of their existing operations, creating more jobs in this burgeoning sector. Pharma and health and wellbeing are earmarked as particularly strong areas for potential future growth.
Employing 1,500 people in 2010, now almost 40,000 are now working in medtech and life sciences, with ongoing investment in Costa Rica’s education and skills training programmes to help support the availability of employees to match business needs.
And with the country being the base for end-to-end creation of medical devices – from research and development through to manufacturing and supply chain – with its capability to create increasingly complex devices growing all the time, its export credentials are understandable.
CINDE, the inward investment agency in Costa Rica continues to play a key role in the ongoing development of the country’s medtech sector, which forms part of a wider push on key areas including digitalisation and sustainability.
“Medtech has become a key component of Costa Rica’s economy, it is the leading sector in the export of goods thanks to the manufacturing of medical devices, turning it into the second-largest exporter of its kind in Latin America,” says Pilar Madrigal, director of investment advisory at CINDE.
“The country hosts 12 of the 30 top medical devices global companies that have established manufacturing operations. The entire ecosystem consists of 81 multinational companies in 14 different subsectors. That has made possible the growth of exports along with the development of more complex devices manufactured in the country and approved by the FDA.
“Our outlook is that Costa Rica’s medtech sector will be on continuous growth and reaffirms itself as a serious contender within the FDI smart manufacturing sector.
“We project that medical devices’ exports will reach US$5 billion this year. But also, that expansion will be reflected on more R&D projects, Costa Rica’s increasing sophistication in medical devices manufacturing, and more participation in the pharma and health & wellbeing sectors.”
The development of the medtech offering in Costa Rica has been an evolving process over the past 20 years, with the country winning the trust of businesses to base themselves there and help to build the capability and reputation.
“Over the years, Costa Rica’s life sciences manufacturing evolved from disposables in the early 2000s, to a wide variety of class I to III devices like surgical, aesthetics, optics, and cardiovascular tools. Currently, the United States and Europe are the main export destinations,” says Pilar.
“It is thanks to the trust of these global companies that this sector has grown exponentially in Costa Rica. Back in 2000, the country only had eight medtech companies and 1,500 people were working in this sector – we now have over 81 multinationals and more than 38,248 people employed.
“This growth has been possible to three main reasons that correspond to Costa Rica’s value proposition: People, Planet, and Prosperity.”
Through its geographical location as a gateway to the Americas and LATAM, with trade partnerships spanning the world, this has proved to be a key factor in its appeal to industry.
“Costa Rica’s strategic location strengthens the second P: Prosperity. It’s well located to facilitate the exports, we have connectivity through both coasts, 15 trade agreements, and the country proved its resilience and business continuity despite the outbreak of the pandemic since March 2020,” says Pilar.
“Within days, manufacturing companies identified all critical on-site jobs which continued to operate under the strictest sanitary protocols, prioritising the wellbeing of the people. Assurance of this business continuity with a clear rule of law and openness to trade demonstrated multinationals’ trust in Costa Rica as their strategic partner for the new nearshoring.”
Investment and development in its people are critical to the ongoing success of medtech, says Pilar, and the country is committed to equipping its people with the skills they need to build careers in the sector with work in its schools, universities and through specialist training.
“When we refer to people, we are talking about our human talent, which has become more specialised in the medtech sector thanks to the establishment of these companies and partnerships with academia,” says Pilar.
“We’ve developed over 40 projects with universities and technical institutions based on the companies’ needs – for example, the medical devices training programs with the National Training Institute (INA) and Edwards Lifesciences, and a Master’s degree in Engineering in Medical Devices with the TEC University.”
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