October 29, 2021 • 39 mins
Puerto Rico, a beautiful island with a complicated relationship with mainland USA. Joining David on this episode is Rodrick Miller. Miller is the Chief Executive Officer at Invest Puerto Rico, the Island's public-private partnership focused on business attraction and investment promotion.
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Episode Transcript
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Speaker 1 (00:00):
I'm David Grosso and you're listening to Follow the Profit.
I'm David Grosso here with another episode of Follow the Profit. Today,
we're going to talk about a US territory that has
been constantly in the news in recent years. I'm talking,
of course, about Puerto Rico, a beautiful island. If you've
(00:20):
never been there, I've been there many times. I love
Puerto Rico. It's a great vacation destination. But these days
we mostly hear about Puerto Rico, unfortunately in a negative light,
and specifically that's because of Hurricane Maria, which devastated the
island in But as with anything else, in crisis, lies opportunity.
So we're gonna talk to a guy who's living in
(00:41):
Puerto Rico, and he's the CEO of invest in Puerto Rico,
an organization that has brought thousands of jobs and millions
of dollars into the territory. And if you haven't heard
about it, Puerto Rico is actually the home to a
big group of entrepreneurs who are moving there for many,
many reasons, and we're going to talk about that today
in our episode. So joining me is Roderick Miller. How
(01:04):
you doing I'm good. Thanks for having me. It's good
to be here. So Puerto Rico. You know, we tend
to think of Puerto Rico as two things. One, of course,
one of the largest Hispanic groups living in the United
States and too amazing weather and beaches. But for your job,
you try to entice companies and entrepreneurs to move to
Puerto Rico. Why Puerto Rico, you know, it's it's it's
(01:28):
a great question. It's it's at the core of what
we do day in and day out. Our organization invest
Puerto Rico was set up specifically for the purpose of
promoting Puerto Rico as a destination location for high impact companies.
In other words, were measured based on our ability to
bring in quality jobs to the market and private investment
and h And it's very simple. We go out and
(01:49):
we meet with business leaders, decision makers, c suite executives,
investors to tell the story of Puerto Rico. We try
to shift the narrative of Puerto Rico on a on
a noble scale. Uh, We're trying to shift it from
one of crisis to one of opportunity and resilience. And
and we try to provide quality data and access to
information for them to make good decisions. Well, and and
(02:10):
then that and that brings us to your question, Rod,
you still haven't answered my question. Why Puerto Rico. It's
a very it's very simple. You're talking about a place
that has the highest concentration of women engineers in the
entire country. You're talking about the sixth largest concentration of
STEM graduates in the world, uh, thirty five by one
hundred island that has eighty eight universities, uh, the number
(02:33):
one pharmaceutical manufacturer in the country. UM, none of the
You noticed that we've not talked about tourism or any
of that stuff. Tourism is only about seven percent of
our economy. So while many people think of to Puerto
Rico as a tourism hub, we're really, quite frankly, uh
kind of a business hub, not for the region, and
we'd like to and we'd like to grow business even more.
(02:54):
And so we we try to tell the story of
why one dollar invested in Puerto Rico is going to
yield more than one dollar invested somewhere else. And we
believe that really comes down to the caliber of the
talent that we have here. Uh. The Moxinus of this
of this of this market in terms of trying to
do something different and and of course we've got world
class incentives that help facilitate those investments. Yeah, let's talk
(03:17):
about one of those incentives, perhaps the most famous one
that I hear a lot from these crypto millionaires is
much lower taxes. I mean specifically almost no federal tax
So can you tell me a little bit about that. Yeah,
you know, that's one of those things where we we
we um. Puerto Rico recognizes some of the challenges that
(03:38):
it's had, whether you're talking about the storms of the
past or whether or the financial crisis, and unfortunately we're
coming out of all of that. But one of the
things that Puerto Rico has been very judicious about is leveraging.
One of the benefits of it's being a territory is
some control over its tax policy. And so in that
(03:59):
and in these incentives are very clearly to offset, you know, uh,
perceives challenges or in some cases perhaps real challenges and
really make the market attractive. So anyone that moves a
business here that's doing exporting or exporting either a good
or a service, the corporate income tax rate for those
businesses is uh four percent uh. And then for the
(04:22):
individual that moves here more than half the year and
makes appropriate investment, there are caveats all these things, but
they are personal income tax goes to zero zero percent.
And so that's a compelling that's a pretty compelling case
to move into Puerto Rico by itself, which is, you know,
you can move to Puerto Rico, make an investment that
(04:42):
matters in a place that matters, and actually be better
off from a tax perspective because of it. And so
we we did. We definitely don't shy away from that.
But what we find is that while some may be
attractive because of our tax code, um people come and
they stay because of the value that we offer as
a business market. So for someone like you, Roderick, when
you moved to Puerto Rico, do you immediately see a
(05:04):
rise in your salary because I mean a lot of
times federal taxes specifically, never mind state taxes right in
places like New York and California, that's that's a big
chunk of your take home pay. Yes, if if one
meets the meets the qualifications in terms of making the
kind of investment on the island, etcetera. Then yes, they would,
(05:25):
they would see a bump in there and then and
what they what they take home and and it's a
great it's a great value that the market really really provides.
And I will say this Puerto Rico, that's just one
of many incentives. For example, there's a Young Entrepreneurs incentive
that for entrepreneurs under the age of thirty five, the
first half a million dollars of that they earn an income,
it's tax free. Uh. And they don't necessarily have to
(05:47):
be in in in one of the other businesses that
that's exporting the services, just because they're young entrepreneur that's
chosen to come to the market of Puerto Rico. Um.
There's also special tax breaks for doctors and healthcare professionals
because we want to make sure that we build up
our health care system. So Puerto Rico has really tried
to leverage its incentive code in a very strategic way
to build an economy that not just you know, allows
(06:10):
people to earn more money, but builds an economy that's
competitive in terms of the types of talent and the
types of investment that we have here on the island.
So what's it like living over there? So, and how
long have you been there? Tell me about it's a
hard job, but someone has to do it. Uh No,
I've been here about three years and I love it.
I'm also you know, I'm a father with four children,
(06:33):
uh and and my wife, So it's interesting bringing our
family over here and having them actually have a different
kind of experience. You know. My kids go to school
that's a bilingual and you know, and they're all speaking
Spanish at different levels, but they're all speaking Spanish and
that's great. Um. For fun. On the weekend, we might
go to one of the charcoals or watering holes, you know,
ten or fifteen minutes from our house, or we may
(06:55):
go hiking in the mountains. So the lifestyle is a
lifestyle that's very attractive as well. Um. You know, Puerto
Rico is one of those places that most people, but
for a conversation with me or someone unlightning, often doesn't
think of it as a place to live. But it's
an absolutely fantastic place to live because, uh, you have
(07:15):
five different ecosystems in thirty five square miles, you have
easy access to the United States, and you have a
warm uh culture and and and and with friendly people.
So Puerto Rico is a great option. So what happens
so I come from You know, I've recently moved away
(07:35):
from their Orlando. We have half a million Puerto Ricans
living in Central Florida now. In fact, I used to
work for the Telemundo affiliate there and they recently announced
that they're going to start sharing the Orlando News in
San Juan and vice versa. Because these communities are so connected,
it's part of your work trying to attract the diaspora
back because as we know, there are more Puerto Ricans
(07:57):
in the living in the United States than on the
actual island. So a big part of what the way
we see our value. We're not just trying to bring
jobs we're trying to bring We're trying to build an
economy strategically, and there are several pillars of that, but
one of the most important pillars is really smart people. Uh.
The number one driver of investment decisions by companies is
(08:20):
can I find people with the capacity, with the skills
with it to help my company be more innovative and
be more productive. And one in Puerto Rico, unfortunately, our
number one export is really smart people. I mentioned the
AD eight universities earlier. I could also talk about, you
know the fact that we've got the leading number of
the astronauts or scientists working at a NASA, their whole
(08:43):
varide of things where Puerto Ricans have been able to
gain world class education on the island or or go
state side for these this education, and we struggle to
gain that talent back because by and large, salaries are
about thirty percent less than the island. And so you
tell any young persons this actually, uh, coming out of school,
just by hopping on the front plane and going to Florida,
(09:05):
your salary is gonna take at bump. Uh. That's uh,
that's becomes very attractive and part of what we were
trying to do and in best Puerto Ricos figure out
how do we actually push the quality of jobs on
the island up so that there so that we can
attract more people and bring many of the people who
have left back home. We find by and march um
(09:25):
that people that are from the island want to come
back um, but when they leave, many times they maintain
the familiar relationships that struggle to have the business ones.
So there are variety of efforts across the island. Uh,
from our partners that like, for example, there's a group
called Complimentiels and they've got a major diaspora initiative trying
to bring um bring folks back. I when I took
(09:47):
this job three years ago, I was there were Puerto
Ricans that reached out for me from place as far
away as Thailand, Sweden, just around the globe. And part
of what we recognize is that that talent, we need
that talent in Puerto Rico. We need that investment in
Puerto Rico. So we're trying to figure out how do
we do that. Part of the work that's really interesting
(10:08):
is we've opened up an office in New York and
we've also opened up an office in San Francisco, and
in both of those places, we've got a significant number
of Puerto Ricans who have left the island who are
now in senior leadership positions in tech and pharma, et cetera,
who are all aged and want and they're asking us
for ways of how to work with us to help
bring new attract new investment to the island. So that's
(10:31):
it's very exciting. So you've been doing this for three years.
What type of businesses have you brought to the island.
One of the things that we've uh we we brought
quite a few business is one of the businesses that
very excited about as biosimilars in side. I mean, as
I mentioned, Puerto Rico has the largest pharmaceutical manufacturing sector
in the country, with fourteen billion dollars in exports all
(10:54):
last year, ninety thousand jobs in that sector on the island.
Um And but traditionally it's been the very big companies.
We've got fourteen of the twenty largest pharmaceuticals in the
world that have have manufacturment here. Uh And so what
we've seen as of late is we've been able to
bring in more on the research and development side of
that and uh and specifically in new technologies. We have
(11:17):
a history, deep history and pills generic some of those things,
and we'll continue to work in those. But for example,
this company, but these companies are gene self therapy is
more like personalized medicine, so they figure out how to
actually use gene cells to solve for issues ranging from
blindness to cancer, uh to to other major challenges. Another
good company that that that we recently brought here was
(11:39):
called seven Eagle, and seven Eagle is a company and
the tech based cyber security company, and we worked on
that with but our partners at the Department of Economic Development,
but also with the poly Technic. I wanted as any
ray see that it's poly Technic and one of the
universities here and uh, that company is training veterans and
their spouses in cyber security and they also provide cybersecurities
(12:02):
consulting services. So those are the kinds of things that
we're doing, uh, and we're excited this this past year,
we were able to bring five thousand new jobs to
the market with an average wage of those jobs of
sixty six thousand a year. So we want to bring
more jobs, jobs with better wages and ideally higher quality
investment that repositions Puerto Rico. We're kind of the long term,
(12:25):
long term economic sustainability. Most of the time I spend
my time Roderick trying to explain to people that government
isn't as large as a force as people think. But
I think Puerto Rico is one of those counter examples. Right.
(12:47):
It's in a weird political situation with the mainland United States,
and additionally, a lot of the recession in Puerto Rico,
which has been ongoing really for more than a decade,
has a lot to do with Congress and expiring X
credits and the pharmaceutical industry leaving, etcetera. What part of
your job is political to make sure that in Washington
(13:07):
they're paying attention to Puerto Rico, because a lot of
Puerto Rico's problems, contrary to popular belief, are political. They're
made up by Washington politicians. Yeah. I think that the
two hundred year history of Puerto Rico as a territory
of the United States and the five hundred year history
of Puerto Rico as a territory or colony in general
(13:30):
has has been one that's really the island of Puerto
Rico has struggled to um really drive its own fate
and determine its own path. Uh. And of course, currently
the federal government makes a lot of those decisions regarding
kind of policy as it relates to investment policies that
relates to opportunity in Puerto Rico. From from from my share, uh,
(13:54):
we work with whatever administrations in office to make sure
that they have good, good information about the market. In
many cases, while Puerto Rico is part of the United States,
it seems otherworldly to Washington politicians, and it becomes, uh,
it becomes a talking point versus actually a meaningful discussion.
So a lot of my job is spending time with
(14:15):
the legislators and and the executive branch as well to
make sure that they understand, uh, what the economy of
Puerto Rico looks like and why Puerto Rico's in many
cases a solution for many of the challenges on the mainland.
Last year, when the pandemic happened, of course we were
all flored, but our economic development strategy at that time
was not really focused in terms of attracting more pharmaceutical
(14:39):
companies because we didn't see a path prior to the
pandemic of those companies choosing to move back towards the
mainland or near shore because the cost differential was just
too great. But when it became evident that American citizens
were not going to have access to the needed um
equipment and then needed a medical UH supplies, they needed
Puerto Rico springing action and have been able to actually
(15:02):
be part of the solution ensuring of the supply chain
in the pharmaceutical sector. So it's a very interesting dance
that we're on one hand, um, many Americans, mainland people
and politicians don't know a lot about Puerto Rico. But
on the other hand, Puerto Rico plays such a big
role in providing needed medical equipment as well as a
(15:24):
as a medical pharmaceutical products to support the mainland. And
and that's a point of pride here on the island. Yeah.
I have a friend who owns the pharmacy in Miami
and when her came Maria hit, her number one complaint
was I'm out of I v s, I'm out of fags,
I'm out of generics. And it was a lot because
those products come from Puerto Rico, and a lot of
(15:45):
the things you see in hospitals and in pharmacies or
sourced from the island. So I want to talk about
one very specific political issue because a lot of times
politics we speak in you know, generalities and you know whatnot.
But there's a specific law on the book. So I'm
referring to the Jones Act of nineteen seventeen. And if
people don't know what that is, it's basically that, you know,
(16:06):
you have to use an American ship to ship things
inside of the United States, which really doesn't matter for
most of us. Right. But for Puerto Rico, that means
if you have Dominican sugarcane, right, you have to put
it on an American boat most of the time, take
it to Jacksonville, Florida, and then bring it back to
Puerto Rico. So Puerto Rico has higher costs across the
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board because of this antiquated law. And I think it's
really nonsense that that still exists, or at least why
isn't there an exemption for Puerto Rico. So are you
guys working to try to repeal the Jones Act? No,
and yes, and so I'll answer that very carefully. The
know is that we do not do any lobbying. Um
we have given our status. We really focus on educating
(16:51):
about different about different policies in their impacts, so we
don't really address things from a political lens. That said,
the Jones Act, you you summarized it very well, and
it creates an unequal opportunity for Puerto Rico to participate
in the global economy because of goods being higher costs
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coming into the island. And they also represent a challenge
in terms of Puerto Rico's ability to compete even in
terms of as a Logistics Hub. Given our strategic location
there there our port and our three international airports. There
are some things that where we could be completing on
the global scale, uh that that are also inhibited by
(17:32):
the Jones Act. But from the from the port perspective
and then from the air perspective of the air transhipment issue,
and we were able to fortunately recently get a waiver,
a two year waiver UH so that goods coming in
through the air would not have to pay uh exorbitant
fees for loading and unloading goods and cargo and people.
And so we've had we've had very bad policy, uh
(17:55):
that in terms of its economic impacts, both in terms
of the Jones Act as well as UH prior restrictions
regarding air cargo. Yeah, and I hate this a lot
of times. You know, really, if you want to think
about poverty in Puerto Rico, the cost of living is
an invisible tax on everyone. So I I would be
(18:15):
highly for maybe not repealing the Jones Act, but maybe
you know, giving Puerto Rico a break they've been throwing up.
So how about debt in Puerto Rico. So a lot
of the initiatives, I imagine your initiative and I haven't
asked you. This comes out of the restructuring of the
massive amounts of debt. I think last time I checked
it was in the mid eighties of billions of dollars,
(18:36):
almost the same as the state of New York, which
is of course a much larger economy. So what is
Puerto Rico doing, uh, you know, politically and economically to
solve its debt problems and to build the economy of tomorrow. Yeah,
very good question. I mean one of the things is
so one of the things that happened is initially, uh,
Puerto Rico wanted to go through bankruptcy project process internally,
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and that was vetoed by Congress. But ultimately there was
a solution that was reached through the Fiscal Oversight and
Management Board. And so now there's a Fiscal Oversight and
Management Board that's in place that has been in charge
of figuring out how to restructure the debt and how
to ideally make sustainable investments. One of the one of
the uh, one of the tension points that we navigate
(19:22):
with the with the group such as the Fiscal Oversight
and Management Board. And I think they made some very
good decisions regarding kind of reallocation of assets and restructuring
the debt. But there's a tension between the idea of
cutting um of of cutting programs and cutting things, and
and the idea of investing. And I think that's a
(19:43):
kind of a dance that Puerto Rico is going to
continue to need to navigate. Uh. You can't cut your
way out of the out of some of the pain
that we're in. Some of it is actually you have
to grow your way out of it, invest your way
out of it. And that's an ongoing challenge. For example,
we we launched something called Impeller recently, which is the
program aimed to bring more private investors to invest in
(20:03):
projects on the island because we know that there needs
to be kind of private investment on the island, that
needs to be smart public policy on the island, and
there needs to be kind of a thoughtfulness about where
we want to go. Uh. In terms of the type
of economy we want long term, I would say historically,
I don't think there's been enough force sight around thinking
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what kind of economy do we want five and fifteen years?
And I think you know, the process of restructuring the
dead is actually creating that room for Puerto Rico for
the first time in a very long time to look
out into the future and say, how do we build
where we want to be? Well, I think you're absolutely
correct that Oversight Board is also you know, finally bringing
much need to change to politics, which is funny because
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Puerto Ricans are are a group that are highly studied
by political scientists because on the island they have some
of the highest turn out rates in the world for elections.
You know, anything about Puerto Rican culture. Politics is the
now sational pastime in Puerto Rico. But for some reason,
when Puerto Ricans migrate to the United States, they don't
(21:06):
vote in these large numbers as they do on the island.
So I think what you're saying, the fiscal Oversight Board,
you know, finally trying to sway politics towards long term thinking,
is a very positive development in Puerto Rico. So and
speaking of long term development, I want to ask you
about the grid in Puerto Rico because we saw Elon Musk,
you know, talking about how he was going to help
Puerto Rico after Hurricane Maria. People were without power for months.
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I have a friend who spent over a year working
on the grid and you know, helping people in Puerto Rico.
How how is that going over there? Are the lights on?
Do they stay on? Do they still need investments in
their grid? I mean, I would tell you what's really exciting.
We've got over eighty billion in federal investment coming down
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the pipe in the island to rebuild the entire infrastructure,
not just the electrical side of things, but also the
road infrastructure, the schools, uh and so I think that's
what's really exciting is that we're at a place where
we're seeing the kind of investments needed to sustain and
make the economy competitive over time. The realities, you know,
(22:13):
there are always ups and downs in these but there's
a partnership between the prep of the islands utility as
well as LUMA, a private firm, to try and figure
out how to you know, get to the generation levels
that we need to be as well as to get
to the distribution at level we need to. There's been
a goal set that by the island would be renewable
(22:34):
and so that's been a very aggressive law and we're
seeing activity not just from the private side where from
or from the from the utility side, but we're seeing
a lot of private activity. We run an energy committee
that has over thirty different U alternative energy companies from
around the globe that are working with Puerto Rican businesses,
(22:55):
working with Puerto Rican Residential prop UH project, working with
Puerto Rican and sopalities to figure out how do we
actually provide a level of continuity, resiliency, redundancy in terms
of the power supply. So those are things you know
that that are are part for the course after a
major UH, after a major disaster such as you know,
earthquakes or hurricanes. But I'm optimistic that we're moving down
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the right path. So how do you end up in
Puerto Rico? We've talked a lot about your job and
the organization. I know we went to the same school.
We both studied government. How did you, your wife and
your four children end up leaving the mainland for paradise?
What's your secret? You know? There I was for the
(23:40):
last twenty years, I've been working on economic development, led
the recovery of New Orleans after Hurricane Katrina, led the
recovery of Detroit during the bankruptcy of the city. And
when this opportunity emerged, I was at the place personally
where I wanted to actually be able to provide my
family with the with the global a different experience, and
(24:02):
so it was the right opportunity at the right time,
and my background ground happened to a line with where
this organization was trying to go. Um it's been a
great journey. Uh. You know, doing economic development is there's
not really anything I'd rather do because part of part
of what I love about it is the breath of
(24:22):
the skills, whether we're working on an issue related to
workforce development or a marketing campaign to attract new companies,
or working with or working with our energy committee to
figure out how to help a new facility, a new
manufacturer that's coming to town have the level of backup
support they need. Um. This, this, this field is really
(24:43):
a field that I enjoy doing, and they have the
opportunity to doing it in such an amazing place that
has such tremendous promise, smart people, a beautiful landscape, a
rich history and culture, a bilingual mark, a bilingual workforce,
and the list goes on and on and on and on.
There's really a dream country country. So I love what
(25:05):
I do. So what parallels do you see? Because I've
been to New Orleans in Detroit. I especially like New Orleans.
Who doesn't like New Orleans beignets and good music and fun.
What parallels do you see from places in the United
(25:27):
States that are actually pretty economically competitive. You're talking about
three places that where the cost of doing business is
fairly low. There's a lot of culture, there's a lot
of existing infrastructure, and there's a lot of untapped talent.
So is it an easy cell? But I think they
also have one negative thing in common, which is, uh,
what's the polite way to say this, uh, corruption, low
(25:49):
levels of you know, economic development that exists. So how
do you how do you market these type of places
that are not, you know, historically associated with wealth like
New York and San Francisco. Will say, it's it's an
interesting quandary. I would I would say, you know, these
are places that have have have struggled and and and
(26:10):
part of the struggle have been there a few things
that you find in common in these kinds of markets
that there is a some sort of precipitous event that
kind of pushes them over. And and but if you
look at the history, uh of these places prior to
that that have been occurring, they were already down a
path where there was challenging porter. New Orleans back in
(26:32):
nineteen fifty was probably I don't now close to a
million people. Um. Detroit, excuse me, Detroit in the early
fifties and ninety four had about two million people. Puerto
Rico and two thousand and ten had three point eight million,
and now they have and then we have three point two. Uh.
So what you see is that there's this path of
(26:54):
population decline. UM. There's also kind of this idea of
over dependent on one industry or one or two industries.
In Detroit, it was, of course the automotive industry. In
the case of New Orleans, it was a combination of
tourism and and uh and the and the and the
oil sector. Uh and so what what so over dependence
(27:15):
on one industry UM, population decline and kind of an
unwillingness to accept changes that are happening in the global
economy and really kind of moved to those changes. In Detroit,
it was kind of, we make big cars. It doesn't
matter that there is going to be more uh fuel
efficient cars coming out of Asia or more luxury cars
(27:36):
coming out of Europe. We make big cars. And that's
what we're gonna do. So we're gonna turn our head
to the kind of the changing global tide um. In
the case of Puerto Rico, you've got a place that
has a lot of great stuff going for it, but
has had had a policy I would say, as it
relates to developing the economy that was solely reliant on
(27:57):
incentives and where we've tried to ship. The conversation is
that incentives are great, but you actually have to have
a value proposition that means that the market is going
to make more sense. So those types of things are
kind of the things that you see as trends in
common of these different markets. Uh what what Why I
am bullish on these markets is because I also believe
that there is an inherent bias and racism in our
(28:20):
society where we look at communities of black and brown
people and we tend to see those as deficits versus
being places that are assets. And the number one driver
of investment decision by companies is having access to smart people.
And so we take investment thesis that if you invest
in people and actually elevate people and and see them
as assets versus as versus liabilities, you can actually create
(28:43):
something that's different. So I would say in New Orleans
that the same funkiness, the sexiness, and the cool that
you see in the food, uh translates into innovation in
companies when people are giving the right skills to actually
be able to apply that that that that flavor that
makes New Orleans New Orleans. In Detroit, we would say,
you know, the same ability to be able to make
a really cool Cadillac translates into the ability to be
(29:07):
able to make a really cool Shino or watch UH.
In the case of Puerto Rico, that innovation that we've
seen in that moxie that's allowed this community to thrive
despite natural disasters, governmental challenges, and other things, is the
same thing that will allow us to reposition our economy
for the next generation of pharmaceuticals and the next generations
(29:29):
of crypto and other other innovations. That's the that's the
opportunity that we have. Yeah, I guess these types of
places you I go back to the beginning of the conversation.
I think they are very competitive, and I think what
you're saying is true. It also has a lot to
do with the people who are making these investment decisions.
Literally don't go to these places. So it's also it's
(29:50):
also a cultural thing beyond you know, institutional bias. The
favorite thing to do, our favorite thing to do at
invest Puerto Rico is the good group of five to
seven and asters who know very little about the island
and take them for two or three days around the
island to allow them to eat. Business leaderships see what's
happening in their sectors, and without a doubt eight out
of nine times once once we do that, companies are like, ah,
(30:12):
we think we probably need to come here and actually
do something. Yeah, well it's nothing like the reality. Yeah,
I guess over time, people, so Detroit was once the
wealthiest city in the world, as you well know, and
you know, over time it developed this reputation for just
falling behind. And it seems like in today's world falling
(30:32):
behind but gets more falling behind, but gets more falling behind.
And as you were saying, these events kind of nudge
these whole regions into just oblivion, economic oblivion, and sometimes
it takes concerted efforts to kind of, you know, put
the train back on track. But I think in an
era of such high costs in places like where I'm
(30:53):
sitting in Los Angeles and New York, you know, and
other places. It only seems natural for companies to want
to ensure the low cost markets like New Orleans, Detroit
and Puerto Rico. That's that's absolutely right, and you know,
we we the idea of that these markets have significant
investments coming into them to kind of rebuild and restructure
(31:16):
also creates an opportunity for innovative companies that say, oh,
I can actually be a part of the decision making
framework and pushing this economy towards something where it can
leap for all others in terms of technology access and
and those types of opportunities. So we we you know
that that this idea of of Puerto Rico, New Orleans,
(31:37):
Detroit having these challenges is very real. But I also
think because of those challenges, the opportunity is greater to
actually build something distinct, different and new. Um One of
the things that the pandemic really underscored was that if
your market hasn't had a shock yet, at will UH
and and a lot of the A lot of times
in meeting with companies, it's about the markets that know
(31:58):
how to respond to show places like Puerto Rico, UH
that are able to kind of uh navigate their way
through kind of the economic turmoil that we all know
it's pending. A lot of times I'll tell companies, I say,
you know, there's this idea about what Puerto Rico is,
but you know you've got fires in California, You've got
hurricanes in Florida. UM, there are challenges everywhere. Wouldn't you
(32:22):
want to be somewhere that knows how to actually deal
with those things and keep on going. We've got some
of the highest levels of worker loyalty in the entire country.
You're talking to three. You know, I was here when
the earthquakes happened the other year, and literally two days later,
everybody was back out working, kind of like we took
a licking, but we're gonna keep on kicking. And I
think that's a big part of the big beauty of Puertolico. Yeah,
(32:46):
I guess I want to end with this. I'm surprised.
You know someone I've interviewed a lot, and I'm sure
you know who she is, A Stacey Plaska. She is,
you know, the non voting member of Congress from the
US Virgin Islands right there next door. Also a very
beautiful play. I'm surprised that all the US territories haven't
come together to kind of present their value proposition because
(33:07):
we don't really think about them, right. I mean, I'm
someone who grew up in Florida, so i grew up
going to the Virgin Islands in Puerto Rico all the time.
But they're not really on our political radar. We seem
to be distracted with other sorts of you know, political division.
We don't really think about, you know, Guam, the Northern
Mariana Islands, you know, uh, the US Virgin Islands, Puerto Rico,
(33:31):
and they all seem to have similar problems, which is
of course that you know, they're they're blessed to be
part of the United States, but that gives them some
strategic economic disadvantages compared to countries with much weaker currencies.
Right Like, if you're in Mexico or Honduras, you have
a much weaker currency than the dollar, and that makes
(33:53):
you much more cost competitive. But on the other hand,
we live in an era where offshoring is under five because,
as we saw, supply chains are a mess and we
can't really depend on pixie dusts and cargo ships to
power our economy. So I guess my question is, how
are we not hearing about this more in the mainstream
(34:13):
news right now? Are we not connecting the dots that
you know, the reason why our shelves are empty is
because our territories are underdeveloped. You know, you you made
some very great points there. I would say, you know,
it's a very it's very hard to cut through, uh,
cut through the noise and actually be able to to
get the kind of audience I would say in mainstream
(34:34):
media around many of the things that we're doing here
in Puerto Rico. It's just you know, it's it's just tough. Um.
Part of part of what we've done. Of course, we've
got a major PR firm representing us out of New York,
and we've got a and we've got uh, we've got
about seven million dollars in one time funding to actually
promote the island that we've got to spend in the
next six months. But we're trying to ring the ball
(34:57):
as loudly as we can. A big reason why you know,
many don't hear about us in the mainstream is because
our organizations have relatively small budgets, so we have to
be quite surgical with our investments and media. So for example,
we've got a we did a campaign in ten cities
last year's social media campaign in ten city cities, but
(35:18):
it was really around pharmaceuticals and the in the value
proposition for Puerto Rico as relates to pharmaceuticals. Will be
launching a greater value proposition campaign shortly where we'll you'll
see us in some of the major airports around the
United States talking about why Puerto Rico UM And so
we're very surgical in terms of going after specific demographic
(35:38):
of companies UH and specific markets that are high costs,
high tax markets so that we can tell our story
there to to those that can actually help make these investments.
But I encourage everyone to, you know, visit our site
investpr dot org as well as as well as share
the word. If you've not len to Puerto Rico yet,
now is a great time to come. Well, you know,
(36:02):
hopefully one day I have a revenue problem so bad
and you know my businesses are so booming that I
can call you up, Roderick can say, you know what
I'm thinking about moving to Puerto Rico because you know,
between the incentives, the culture, the language that's near and
dear to my heart as my film is from a
neighboring island of Cuba. Which is another podcast for another day.
(36:25):
That seems like that need would need ten podcasts. But
I really appreciate your time, Roderick, and I'm really glad
we connected. David, please hand me back. I enjoyed this.
This was a hoot, which I could ask you. So
that was a really fun conversation. I always think of
(36:46):
Puerto Rico because it's a place that's really close to me.
You know, my brother's partner, she's from Puerto Rico, and
it's a place that I've really liked going to growing up,
especially since we didn't have the habit of going to Cuba,
so instead we went to Puerto Rico, where I had
a lot of family. You know, I speak the language,
and I'm very close to the issue. And I want
to thank Roderick for really walking us through the value
(37:06):
proposition that Puerto Rico has. But I want to remind
our audience that Puerto Rico is a painful reminder of
how a lot of times, Congress is the problem. The
laws on the books are the problem. The work Roderick
is doing is very important. The tax incentives will help
Puerto Rico enormously, but Puerto Rico needs a fair shake
(37:28):
in Washington. They need to repeal laws that are increasing
the cost of living in a territory that has lower
incomes in our poor estate, which if you don't know,
that's Mississippi, and they're significantly lower in Puerto Rico. We
don't really need to add to the cost of living.
And then we wonder why the territory is so far
into debt and why so many Puerto Ricans migrate to
(37:48):
the mainland. They're voting with their feet because it's just
simply too expensive and the economics don't work. But this
is a man made creation. It can be changed. Something
called the Jones Act can be repealed, and every now
and then it comes up in the news, but we
don't hear about it enough. And really I understand the
value of the Jones Act. It really protects American shipping
(38:08):
interests and American shipmakers, and I'm fine with that, but
there should be a waiver for Puerto Rico. Puerto Rico
has been through a lot, a Category five hurricane, earthquakes,
the expiration of tax incentives that you've probably never heard of,
and a NonStop recession and emigration of millions. So I
(38:29):
really really want to promote the idea that the situation
in Puerto Rico is solvable, like anywhere else. A lot
of times we have to look at all of the
tools available to us, and in a lot of those cases,
the problems are political, not just economic. So thank you
to all of you for joining me for this episode.
I love Puerto Rico and I love talking about it,
(38:51):
and that's the whole point of Follow the Profit is
for you to learn more about what's causing our economic
and social problems and of course our political problem in
today's world. I'd like to thank Roderick again from invest
Puerto Rico. You can check out his work just google him.
I'd like to thank our hard working team of producers,
Rob Scott Cheyenne, as well as our executive producers New
(39:12):
Gingrich and Debbie Meyers. I'm your host, David Grasso. If
you like the show, give me five stars and leave
a review. We read those reviews and we would love
to hear your feedback. Follow the Prophet as a production
of GINGRAS three sixty and I Heart Radio. For more
podcasts from my Heart Radio, visit the I Heart Radio, app,
Apple Podcast or wherever you get your podcast. Part of
(39:34):
the Gingwich three six network
I'm David Grosso and you're listening to Follow the Profit.
I'm David Grosso here with another episode of Follow the Profit. Today,
we're going to talk about a US territory that has
been constantly in the news in recent years. I'm talking,
of course, about Puerto Rico, a beautiful island. If you've
(00:20):
never been there, I've been there many times. I love
Puerto Rico. It's a great vacation destination. But these days
we mostly hear about Puerto Rico, unfortunately in a negative light,
and specifically that's because of Hurricane Maria, which devastated the
island in But as with anything else, in crisis, lies opportunity.
So we're gonna talk to a guy who's living in
(00:41):
Puerto Rico, and he's the CEO of invest in Puerto Rico,
an organization that has brought thousands of jobs and millions
of dollars into the territory. And if you haven't heard
about it, Puerto Rico is actually the home to a
big group of entrepreneurs who are moving there for many,
many reasons, and we're going to talk about that today
in our episode. So joining me is Roderick Miller. How
(01:04):
you doing I'm good. Thanks for having me. It's good
to be here. So Puerto Rico. You know, we tend
to think of Puerto Rico as two things. One, of course,
one of the largest Hispanic groups living in the United
States and too amazing weather and beaches. But for your job,
you try to entice companies and entrepreneurs to move to
Puerto Rico. Why Puerto Rico, you know, it's it's it's
(01:28):
a great question. It's it's at the core of what
we do day in and day out. Our organization invest
Puerto Rico was set up specifically for the purpose of
promoting Puerto Rico as a destination location for high impact companies.
In other words, were measured based on our ability to
bring in quality jobs to the market and private investment
and h And it's very simple. We go out and
(01:49):
we meet with business leaders, decision makers, c suite executives,
investors to tell the story of Puerto Rico. We try
to shift the narrative of Puerto Rico on a on
a noble scale. Uh, We're trying to shift it from
one of crisis to one of opportunity and resilience. And
and we try to provide quality data and access to
information for them to make good decisions. Well, and and
(02:10):
then that and that brings us to your question, Rod,
you still haven't answered my question. Why Puerto Rico. It's
a very it's very simple. You're talking about a place
that has the highest concentration of women engineers in the
entire country. You're talking about the sixth largest concentration of
STEM graduates in the world, uh, thirty five by one
hundred island that has eighty eight universities, uh, the number
(02:33):
one pharmaceutical manufacturer in the country. UM, none of the
You noticed that we've not talked about tourism or any
of that stuff. Tourism is only about seven percent of
our economy. So while many people think of to Puerto
Rico as a tourism hub, we're really, quite frankly, uh
kind of a business hub, not for the region, and
we'd like to and we'd like to grow business even more.
(02:54):
And so we we try to tell the story of
why one dollar invested in Puerto Rico is going to
yield more than one dollar invested somewhere else. And we
believe that really comes down to the caliber of the
talent that we have here. Uh. The Moxinus of this
of this of this market in terms of trying to
do something different and and of course we've got world
class incentives that help facilitate those investments. Yeah, let's talk
(03:17):
about one of those incentives, perhaps the most famous one
that I hear a lot from these crypto millionaires is
much lower taxes. I mean specifically almost no federal tax
So can you tell me a little bit about that. Yeah,
you know, that's one of those things where we we
we um. Puerto Rico recognizes some of the challenges that
(03:38):
it's had, whether you're talking about the storms of the
past or whether or the financial crisis, and unfortunately we're
coming out of all of that. But one of the
things that Puerto Rico has been very judicious about is leveraging.
One of the benefits of it's being a territory is
some control over its tax policy. And so in that
(03:59):
and in these incentives are very clearly to offset, you know, uh,
perceives challenges or in some cases perhaps real challenges and
really make the market attractive. So anyone that moves a
business here that's doing exporting or exporting either a good
or a service, the corporate income tax rate for those
businesses is uh four percent uh. And then for the
(04:22):
individual that moves here more than half the year and
makes appropriate investment, there are caveats all these things, but
they are personal income tax goes to zero zero percent.
And so that's a compelling that's a pretty compelling case
to move into Puerto Rico by itself, which is, you know,
you can move to Puerto Rico, make an investment that
(04:42):
matters in a place that matters, and actually be better
off from a tax perspective because of it. And so
we we did. We definitely don't shy away from that.
But what we find is that while some may be
attractive because of our tax code, um people come and
they stay because of the value that we offer as
a business market. So for someone like you, Roderick, when
you moved to Puerto Rico, do you immediately see a
(05:04):
rise in your salary because I mean a lot of
times federal taxes specifically, never mind state taxes right in
places like New York and California, that's that's a big
chunk of your take home pay. Yes, if if one
meets the meets the qualifications in terms of making the
kind of investment on the island, etcetera. Then yes, they would,
(05:25):
they would see a bump in there and then and
what they what they take home and and it's a
great it's a great value that the market really really provides.
And I will say this Puerto Rico, that's just one
of many incentives. For example, there's a Young Entrepreneurs incentive
that for entrepreneurs under the age of thirty five, the
first half a million dollars of that they earn an income,
it's tax free. Uh. And they don't necessarily have to
(05:47):
be in in in one of the other businesses that
that's exporting the services, just because they're young entrepreneur that's
chosen to come to the market of Puerto Rico. Um.
There's also special tax breaks for doctors and healthcare professionals
because we want to make sure that we build up
our health care system. So Puerto Rico has really tried
to leverage its incentive code in a very strategic way
to build an economy that not just you know, allows
(06:10):
people to earn more money, but builds an economy that's
competitive in terms of the types of talent and the
types of investment that we have here on the island.
So what's it like living over there? So, and how
long have you been there? Tell me about it's a
hard job, but someone has to do it. Uh No,
I've been here about three years and I love it.
I'm also you know, I'm a father with four children,
(06:33):
uh and and my wife, So it's interesting bringing our
family over here and having them actually have a different
kind of experience. You know. My kids go to school
that's a bilingual and you know, and they're all speaking
Spanish at different levels, but they're all speaking Spanish and
that's great. Um. For fun. On the weekend, we might
go to one of the charcoals or watering holes, you know,
ten or fifteen minutes from our house, or we may
(06:55):
go hiking in the mountains. So the lifestyle is a
lifestyle that's very attractive as well. Um. You know, Puerto
Rico is one of those places that most people, but
for a conversation with me or someone unlightning, often doesn't
think of it as a place to live. But it's
an absolutely fantastic place to live because, uh, you have
(07:15):
five different ecosystems in thirty five square miles, you have
easy access to the United States, and you have a
warm uh culture and and and and with friendly people.
So Puerto Rico is a great option. So what happens
so I come from You know, I've recently moved away
(07:35):
from their Orlando. We have half a million Puerto Ricans
living in Central Florida now. In fact, I used to
work for the Telemundo affiliate there and they recently announced
that they're going to start sharing the Orlando News in
San Juan and vice versa. Because these communities are so connected,
it's part of your work trying to attract the diaspora
back because as we know, there are more Puerto Ricans
(07:57):
in the living in the United States than on the
actual island. So a big part of what the way
we see our value. We're not just trying to bring
jobs we're trying to bring We're trying to build an
economy strategically, and there are several pillars of that, but
one of the most important pillars is really smart people. Uh.
The number one driver of investment decisions by companies is
(08:20):
can I find people with the capacity, with the skills
with it to help my company be more innovative and
be more productive. And one in Puerto Rico, unfortunately, our
number one export is really smart people. I mentioned the
AD eight universities earlier. I could also talk about, you
know the fact that we've got the leading number of
the astronauts or scientists working at a NASA, their whole
(08:43):
varide of things where Puerto Ricans have been able to
gain world class education on the island or or go
state side for these this education, and we struggle to
gain that talent back because by and large, salaries are
about thirty percent less than the island. And so you
tell any young persons this actually, uh, coming out of school,
just by hopping on the front plane and going to Florida,
(09:05):
your salary is gonna take at bump. Uh. That's uh,
that's becomes very attractive and part of what we were
trying to do and in best Puerto Ricos figure out
how do we actually push the quality of jobs on
the island up so that there so that we can
attract more people and bring many of the people who
have left back home. We find by and march um
(09:25):
that people that are from the island want to come
back um, but when they leave, many times they maintain
the familiar relationships that struggle to have the business ones.
So there are variety of efforts across the island. Uh,
from our partners that like, for example, there's a group
called Complimentiels and they've got a major diaspora initiative trying
to bring um bring folks back. I when I took
(09:47):
this job three years ago, I was there were Puerto
Ricans that reached out for me from place as far
away as Thailand, Sweden, just around the globe. And part
of what we recognize is that that talent, we need
that talent in Puerto Rico. We need that investment in
Puerto Rico. So we're trying to figure out how do
we do that. Part of the work that's really interesting
(10:08):
is we've opened up an office in New York and
we've also opened up an office in San Francisco, and
in both of those places, we've got a significant number
of Puerto Ricans who have left the island who are
now in senior leadership positions in tech and pharma, et cetera,
who are all aged and want and they're asking us
for ways of how to work with us to help
bring new attract new investment to the island. So that's
(10:31):
it's very exciting. So you've been doing this for three years.
What type of businesses have you brought to the island.
One of the things that we've uh we we brought
quite a few business is one of the businesses that
very excited about as biosimilars in side. I mean, as
I mentioned, Puerto Rico has the largest pharmaceutical manufacturing sector
in the country, with fourteen billion dollars in exports all
(10:54):
last year, ninety thousand jobs in that sector on the island.
Um And but traditionally it's been the very big companies.
We've got fourteen of the twenty largest pharmaceuticals in the
world that have have manufacturment here. Uh And so what
we've seen as of late is we've been able to
bring in more on the research and development side of
that and uh and specifically in new technologies. We have
(11:17):
a history, deep history and pills generic some of those things,
and we'll continue to work in those. But for example,
this company, but these companies are gene self therapy is
more like personalized medicine, so they figure out how to
actually use gene cells to solve for issues ranging from
blindness to cancer, uh to to other major challenges. Another
good company that that that we recently brought here was
(11:39):
called seven Eagle, and seven Eagle is a company and
the tech based cyber security company, and we worked on
that with but our partners at the Department of Economic Development,
but also with the poly Technic. I wanted as any
ray see that it's poly Technic and one of the
universities here and uh, that company is training veterans and
their spouses in cyber security and they also provide cybersecurities
(12:02):
consulting services. So those are the kinds of things that
we're doing, uh, and we're excited this this past year,
we were able to bring five thousand new jobs to
the market with an average wage of those jobs of
sixty six thousand a year. So we want to bring
more jobs, jobs with better wages and ideally higher quality
investment that repositions Puerto Rico. We're kind of the long term,
(12:25):
long term economic sustainability. Most of the time I spend
my time Roderick trying to explain to people that government
isn't as large as a force as people think. But
I think Puerto Rico is one of those counter examples. Right.
(12:47):
It's in a weird political situation with the mainland United States,
and additionally, a lot of the recession in Puerto Rico,
which has been ongoing really for more than a decade,
has a lot to do with Congress and expiring X
credits and the pharmaceutical industry leaving, etcetera. What part of
your job is political to make sure that in Washington
(13:07):
they're paying attention to Puerto Rico, because a lot of
Puerto Rico's problems, contrary to popular belief, are political. They're
made up by Washington politicians. Yeah. I think that the
two hundred year history of Puerto Rico as a territory
of the United States and the five hundred year history
of Puerto Rico as a territory or colony in general
(13:30):
has has been one that's really the island of Puerto
Rico has struggled to um really drive its own fate
and determine its own path. Uh. And of course, currently
the federal government makes a lot of those decisions regarding
kind of policy as it relates to investment policies that
relates to opportunity in Puerto Rico. From from from my share, uh,
(13:54):
we work with whatever administrations in office to make sure
that they have good, good information about the market. In
many cases, while Puerto Rico is part of the United States,
it seems otherworldly to Washington politicians, and it becomes, uh,
it becomes a talking point versus actually a meaningful discussion.
So a lot of my job is spending time with
(14:15):
the legislators and and the executive branch as well to
make sure that they understand, uh, what the economy of
Puerto Rico looks like and why Puerto Rico's in many
cases a solution for many of the challenges on the mainland.
Last year, when the pandemic happened, of course we were
all flored, but our economic development strategy at that time
was not really focused in terms of attracting more pharmaceutical
(14:39):
companies because we didn't see a path prior to the
pandemic of those companies choosing to move back towards the
mainland or near shore because the cost differential was just
too great. But when it became evident that American citizens
were not going to have access to the needed um
equipment and then needed a medical UH supplies, they needed
Puerto Rico springing action and have been able to actually
(15:02):
be part of the solution ensuring of the supply chain
in the pharmaceutical sector. So it's a very interesting dance
that we're on one hand, um, many Americans, mainland people
and politicians don't know a lot about Puerto Rico. But
on the other hand, Puerto Rico plays such a big
role in providing needed medical equipment as well as a
(15:24):
as a medical pharmaceutical products to support the mainland. And
and that's a point of pride here on the island. Yeah.
I have a friend who owns the pharmacy in Miami
and when her came Maria hit, her number one complaint
was I'm out of I v s, I'm out of fags,
I'm out of generics. And it was a lot because
those products come from Puerto Rico, and a lot of
(15:45):
the things you see in hospitals and in pharmacies or
sourced from the island. So I want to talk about
one very specific political issue because a lot of times
politics we speak in you know, generalities and you know whatnot.
But there's a specific law on the book. So I'm
referring to the Jones Act of nineteen seventeen. And if
people don't know what that is, it's basically that, you know,
(16:06):
you have to use an American ship to ship things
inside of the United States, which really doesn't matter for
most of us. Right. But for Puerto Rico, that means
if you have Dominican sugarcane, right, you have to put
it on an American boat most of the time, take
it to Jacksonville, Florida, and then bring it back to
Puerto Rico. So Puerto Rico has higher costs across the
(16:28):
board because of this antiquated law. And I think it's
really nonsense that that still exists, or at least why
isn't there an exemption for Puerto Rico. So are you
guys working to try to repeal the Jones Act? No,
and yes, and so I'll answer that very carefully. The
know is that we do not do any lobbying. Um
we have given our status. We really focus on educating
(16:51):
about different about different policies in their impacts, so we
don't really address things from a political lens. That said,
the Jones Act, you you summarized it very well, and
it creates an unequal opportunity for Puerto Rico to participate
in the global economy because of goods being higher costs
(17:12):
coming into the island. And they also represent a challenge
in terms of Puerto Rico's ability to compete even in
terms of as a Logistics Hub. Given our strategic location
there there our port and our three international airports. There
are some things that where we could be completing on
the global scale, uh that that are also inhibited by
(17:32):
the Jones Act. But from the from the port perspective
and then from the air perspective of the air transhipment issue,
and we were able to fortunately recently get a waiver,
a two year waiver UH so that goods coming in
through the air would not have to pay uh exorbitant
fees for loading and unloading goods and cargo and people.
And so we've had we've had very bad policy, uh
(17:55):
that in terms of its economic impacts, both in terms
of the Jones Act as well as UH prior restrictions
regarding air cargo. Yeah, and I hate this a lot
of times. You know, really, if you want to think
about poverty in Puerto Rico, the cost of living is
an invisible tax on everyone. So I I would be
(18:15):
highly for maybe not repealing the Jones Act, but maybe
you know, giving Puerto Rico a break they've been throwing up.
So how about debt in Puerto Rico. So a lot
of the initiatives, I imagine your initiative and I haven't
asked you. This comes out of the restructuring of the
massive amounts of debt. I think last time I checked
it was in the mid eighties of billions of dollars,
(18:36):
almost the same as the state of New York, which
is of course a much larger economy. So what is
Puerto Rico doing, uh, you know, politically and economically to
solve its debt problems and to build the economy of tomorrow. Yeah,
very good question. I mean one of the things is
so one of the things that happened is initially, uh,
Puerto Rico wanted to go through bankruptcy project process internally,
(18:59):
and that was vetoed by Congress. But ultimately there was
a solution that was reached through the Fiscal Oversight and
Management Board. And so now there's a Fiscal Oversight and
Management Board that's in place that has been in charge
of figuring out how to restructure the debt and how
to ideally make sustainable investments. One of the one of
the uh, one of the tension points that we navigate
(19:22):
with the with the group such as the Fiscal Oversight
and Management Board. And I think they made some very
good decisions regarding kind of reallocation of assets and restructuring
the debt. But there's a tension between the idea of
cutting um of of cutting programs and cutting things, and
and the idea of investing. And I think that's a
(19:43):
kind of a dance that Puerto Rico is going to
continue to need to navigate. Uh. You can't cut your
way out of the out of some of the pain
that we're in. Some of it is actually you have
to grow your way out of it, invest your way
out of it. And that's an ongoing challenge. For example,
we we launched something called Impeller recently, which is the
program aimed to bring more private investors to invest in
(20:03):
projects on the island because we know that there needs
to be kind of private investment on the island, that
needs to be smart public policy on the island, and
there needs to be kind of a thoughtfulness about where
we want to go. Uh. In terms of the type
of economy we want long term, I would say historically,
I don't think there's been enough force sight around thinking
(20:24):
what kind of economy do we want five and fifteen years?
And I think you know, the process of restructuring the
dead is actually creating that room for Puerto Rico for
the first time in a very long time to look
out into the future and say, how do we build
where we want to be? Well, I think you're absolutely
correct that Oversight Board is also you know, finally bringing
much need to change to politics, which is funny because
(20:46):
Puerto Ricans are are a group that are highly studied
by political scientists because on the island they have some
of the highest turn out rates in the world for elections.
You know, anything about Puerto Rican culture. Politics is the
now sational pastime in Puerto Rico. But for some reason,
when Puerto Ricans migrate to the United States, they don't
(21:06):
vote in these large numbers as they do on the island.
So I think what you're saying, the fiscal Oversight Board,
you know, finally trying to sway politics towards long term thinking,
is a very positive development in Puerto Rico. So and
speaking of long term development, I want to ask you
about the grid in Puerto Rico because we saw Elon Musk,
you know, talking about how he was going to help
Puerto Rico after Hurricane Maria. People were without power for months.
(21:31):
I have a friend who spent over a year working
on the grid and you know, helping people in Puerto Rico.
How how is that going over there? Are the lights on?
Do they stay on? Do they still need investments in
their grid? I mean, I would tell you what's really exciting.
We've got over eighty billion in federal investment coming down
(21:51):
the pipe in the island to rebuild the entire infrastructure,
not just the electrical side of things, but also the
road infrastructure, the schools, uh and so I think that's
what's really exciting is that we're at a place where
we're seeing the kind of investments needed to sustain and
make the economy competitive over time. The realities, you know,
(22:13):
there are always ups and downs in these but there's
a partnership between the prep of the islands utility as
well as LUMA, a private firm, to try and figure
out how to you know, get to the generation levels
that we need to be as well as to get
to the distribution at level we need to. There's been
a goal set that by the island would be renewable
(22:34):
and so that's been a very aggressive law and we're
seeing activity not just from the private side where from
or from the from the utility side, but we're seeing
a lot of private activity. We run an energy committee
that has over thirty different U alternative energy companies from
around the globe that are working with Puerto Rican businesses,
(22:55):
working with Puerto Rican Residential prop UH project, working with
Puerto Rican and sopalities to figure out how do we
actually provide a level of continuity, resiliency, redundancy in terms
of the power supply. So those are things you know
that that are are part for the course after a
major UH, after a major disaster such as you know,
earthquakes or hurricanes. But I'm optimistic that we're moving down
(23:19):
the right path. So how do you end up in
Puerto Rico? We've talked a lot about your job and
the organization. I know we went to the same school.
We both studied government. How did you, your wife and
your four children end up leaving the mainland for paradise?
What's your secret? You know? There I was for the
(23:40):
last twenty years, I've been working on economic development, led
the recovery of New Orleans after Hurricane Katrina, led the
recovery of Detroit during the bankruptcy of the city. And
when this opportunity emerged, I was at the place personally
where I wanted to actually be able to provide my
family with the with the global a different experience, and
(24:02):
so it was the right opportunity at the right time,
and my background ground happened to a line with where
this organization was trying to go. Um it's been a
great journey. Uh. You know, doing economic development is there's
not really anything I'd rather do because part of part
of what I love about it is the breath of
(24:22):
the skills, whether we're working on an issue related to
workforce development or a marketing campaign to attract new companies,
or working with or working with our energy committee to
figure out how to help a new facility, a new
manufacturer that's coming to town have the level of backup
support they need. Um. This, this, this field is really
(24:43):
a field that I enjoy doing, and they have the
opportunity to doing it in such an amazing place that
has such tremendous promise, smart people, a beautiful landscape, a
rich history and culture, a bilingual mark, a bilingual workforce,
and the list goes on and on and on and on.
There's really a dream country country. So I love what
(25:05):
I do. So what parallels do you see? Because I've
been to New Orleans in Detroit. I especially like New Orleans.
Who doesn't like New Orleans beignets and good music and fun.
What parallels do you see from places in the United
(25:27):
States that are actually pretty economically competitive. You're talking about
three places that where the cost of doing business is
fairly low. There's a lot of culture, there's a lot
of existing infrastructure, and there's a lot of untapped talent.
So is it an easy cell? But I think they
also have one negative thing in common, which is, uh,
what's the polite way to say this, uh, corruption, low
(25:49):
levels of you know, economic development that exists. So how
do you how do you market these type of places
that are not, you know, historically associated with wealth like
New York and San Francisco. Will say, it's it's an
interesting quandary. I would I would say, you know, these
are places that have have have struggled and and and
(26:10):
part of the struggle have been there a few things
that you find in common in these kinds of markets
that there is a some sort of precipitous event that
kind of pushes them over. And and but if you
look at the history, uh of these places prior to
that that have been occurring, they were already down a
path where there was challenging porter. New Orleans back in
(26:32):
nineteen fifty was probably I don't now close to a
million people. Um. Detroit, excuse me, Detroit in the early
fifties and ninety four had about two million people. Puerto
Rico and two thousand and ten had three point eight million,
and now they have and then we have three point two. Uh.
So what you see is that there's this path of
(26:54):
population decline. UM. There's also kind of this idea of
over dependent on one industry or one or two industries.
In Detroit, it was, of course the automotive industry. In
the case of New Orleans, it was a combination of
tourism and and uh and the and the and the
oil sector. Uh and so what what so over dependence
(27:15):
on one industry UM, population decline and kind of an
unwillingness to accept changes that are happening in the global
economy and really kind of moved to those changes. In Detroit,
it was kind of, we make big cars. It doesn't
matter that there is going to be more uh fuel
efficient cars coming out of Asia or more luxury cars
(27:36):
coming out of Europe. We make big cars. And that's
what we're gonna do. So we're gonna turn our head
to the kind of the changing global tide um. In
the case of Puerto Rico, you've got a place that
has a lot of great stuff going for it, but
has had had a policy I would say, as it
relates to developing the economy that was solely reliant on
(27:57):
incentives and where we've tried to ship. The conversation is
that incentives are great, but you actually have to have
a value proposition that means that the market is going
to make more sense. So those types of things are
kind of the things that you see as trends in
common of these different markets. Uh what what Why I
am bullish on these markets is because I also believe
that there is an inherent bias and racism in our
(28:20):
society where we look at communities of black and brown
people and we tend to see those as deficits versus
being places that are assets. And the number one driver
of investment decision by companies is having access to smart people.
And so we take investment thesis that if you invest
in people and actually elevate people and and see them
as assets versus as versus liabilities, you can actually create
(28:43):
something that's different. So I would say in New Orleans
that the same funkiness, the sexiness, and the cool that
you see in the food, uh translates into innovation in
companies when people are giving the right skills to actually
be able to apply that that that that flavor that
makes New Orleans New Orleans. In Detroit, we would say,
you know, the same ability to be able to make
a really cool Cadillac translates into the ability to be
(29:07):
able to make a really cool Shino or watch UH.
In the case of Puerto Rico, that innovation that we've
seen in that moxie that's allowed this community to thrive
despite natural disasters, governmental challenges, and other things, is the
same thing that will allow us to reposition our economy
for the next generation of pharmaceuticals and the next generations
(29:29):
of crypto and other other innovations. That's the that's the
opportunity that we have. Yeah, I guess these types of
places you I go back to the beginning of the conversation.
I think they are very competitive, and I think what
you're saying is true. It also has a lot to
do with the people who are making these investment decisions.
Literally don't go to these places. So it's also it's
(29:50):
also a cultural thing beyond you know, institutional bias. The
favorite thing to do, our favorite thing to do at
invest Puerto Rico is the good group of five to
seven and asters who know very little about the island
and take them for two or three days around the
island to allow them to eat. Business leaderships see what's
happening in their sectors, and without a doubt eight out
of nine times once once we do that, companies are like, ah,
(30:12):
we think we probably need to come here and actually
do something. Yeah, well it's nothing like the reality. Yeah,
I guess over time, people, so Detroit was once the
wealthiest city in the world, as you well know, and
you know, over time it developed this reputation for just
falling behind. And it seems like in today's world falling
(30:32):
behind but gets more falling behind, but gets more falling behind.
And as you were saying, these events kind of nudge
these whole regions into just oblivion, economic oblivion, and sometimes
it takes concerted efforts to kind of, you know, put
the train back on track. But I think in an
era of such high costs in places like where I'm
(30:53):
sitting in Los Angeles and New York, you know, and
other places. It only seems natural for companies to want
to ensure the low cost markets like New Orleans, Detroit
and Puerto Rico. That's that's absolutely right, and you know,
we we the idea of that these markets have significant
investments coming into them to kind of rebuild and restructure
(31:16):
also creates an opportunity for innovative companies that say, oh,
I can actually be a part of the decision making
framework and pushing this economy towards something where it can
leap for all others in terms of technology access and
and those types of opportunities. So we we you know
that that this idea of of Puerto Rico, New Orleans,
(31:37):
Detroit having these challenges is very real. But I also
think because of those challenges, the opportunity is greater to
actually build something distinct, different and new. Um One of
the things that the pandemic really underscored was that if
your market hasn't had a shock yet, at will UH
and and a lot of the A lot of times
in meeting with companies, it's about the markets that know
(31:58):
how to respond to show places like Puerto Rico, UH
that are able to kind of uh navigate their way
through kind of the economic turmoil that we all know
it's pending. A lot of times I'll tell companies, I say,
you know, there's this idea about what Puerto Rico is,
but you know you've got fires in California, You've got
hurricanes in Florida. UM, there are challenges everywhere. Wouldn't you
(32:22):
want to be somewhere that knows how to actually deal
with those things and keep on going. We've got some
of the highest levels of worker loyalty in the entire country.
You're talking to three. You know, I was here when
the earthquakes happened the other year, and literally two days later,
everybody was back out working, kind of like we took
a licking, but we're gonna keep on kicking. And I
think that's a big part of the big beauty of Puertolico. Yeah,
(32:46):
I guess I want to end with this. I'm surprised.
You know someone I've interviewed a lot, and I'm sure
you know who she is, A Stacey Plaska. She is,
you know, the non voting member of Congress from the
US Virgin Islands right there next door. Also a very
beautiful play. I'm surprised that all the US territories haven't
come together to kind of present their value proposition because
(33:07):
we don't really think about them, right. I mean, I'm
someone who grew up in Florida, so i grew up
going to the Virgin Islands in Puerto Rico all the time.
But they're not really on our political radar. We seem
to be distracted with other sorts of you know, political division.
We don't really think about, you know, Guam, the Northern
Mariana Islands, you know, uh, the US Virgin Islands, Puerto Rico,
(33:31):
and they all seem to have similar problems, which is
of course that you know, they're they're blessed to be
part of the United States, but that gives them some
strategic economic disadvantages compared to countries with much weaker currencies.
Right Like, if you're in Mexico or Honduras, you have
a much weaker currency than the dollar, and that makes
(33:53):
you much more cost competitive. But on the other hand,
we live in an era where offshoring is under five because,
as we saw, supply chains are a mess and we
can't really depend on pixie dusts and cargo ships to
power our economy. So I guess my question is, how
are we not hearing about this more in the mainstream
(34:13):
news right now? Are we not connecting the dots that
you know, the reason why our shelves are empty is
because our territories are underdeveloped. You know, you you made
some very great points there. I would say, you know,
it's a very it's very hard to cut through, uh,
cut through the noise and actually be able to to
get the kind of audience I would say in mainstream
(34:34):
media around many of the things that we're doing here
in Puerto Rico. It's just you know, it's it's just tough. Um.
Part of part of what we've done. Of course, we've
got a major PR firm representing us out of New York,
and we've got a and we've got uh, we've got
about seven million dollars in one time funding to actually
promote the island that we've got to spend in the
next six months. But we're trying to ring the ball
(34:57):
as loudly as we can. A big reason why you know,
many don't hear about us in the mainstream is because
our organizations have relatively small budgets, so we have to
be quite surgical with our investments and media. So for example,
we've got a we did a campaign in ten cities
last year's social media campaign in ten city cities, but
(35:18):
it was really around pharmaceuticals and the in the value
proposition for Puerto Rico as relates to pharmaceuticals. Will be
launching a greater value proposition campaign shortly where we'll you'll
see us in some of the major airports around the
United States talking about why Puerto Rico UM And so
we're very surgical in terms of going after specific demographic
(35:38):
of companies UH and specific markets that are high costs,
high tax markets so that we can tell our story
there to to those that can actually help make these investments.
But I encourage everyone to, you know, visit our site
investpr dot org as well as as well as share
the word. If you've not len to Puerto Rico yet,
now is a great time to come. Well, you know,
(36:02):
hopefully one day I have a revenue problem so bad
and you know my businesses are so booming that I
can call you up, Roderick can say, you know what
I'm thinking about moving to Puerto Rico because you know,
between the incentives, the culture, the language that's near and
dear to my heart as my film is from a
neighboring island of Cuba. Which is another podcast for another day.
(36:25):
That seems like that need would need ten podcasts. But
I really appreciate your time, Roderick, and I'm really glad
we connected. David, please hand me back. I enjoyed this.
This was a hoot, which I could ask you. So
that was a really fun conversation. I always think of
(36:46):
Puerto Rico because it's a place that's really close to me.
You know, my brother's partner, she's from Puerto Rico, and
it's a place that I've really liked going to growing up,
especially since we didn't have the habit of going to Cuba,
so instead we went to Puerto Rico, where I had
a lot of family. You know, I speak the language,
and I'm very close to the issue. And I want
to thank Roderick for really walking us through the value
(37:06):
proposition that Puerto Rico has. But I want to remind
our audience that Puerto Rico is a painful reminder of
how a lot of times, Congress is the problem. The
laws on the books are the problem. The work Roderick
is doing is very important. The tax incentives will help
Puerto Rico enormously, but Puerto Rico needs a fair shake
(37:28):
in Washington. They need to repeal laws that are increasing
the cost of living in a territory that has lower
incomes in our poor estate, which if you don't know,
that's Mississippi, and they're significantly lower in Puerto Rico. We
don't really need to add to the cost of living.
And then we wonder why the territory is so far
into debt and why so many Puerto Ricans migrate to
(37:48):
the mainland. They're voting with their feet because it's just
simply too expensive and the economics don't work. But this
is a man made creation. It can be changed. Something
called the Jones Act can be repealed, and every now
and then it comes up in the news, but we
don't hear about it enough. And really I understand the
value of the Jones Act. It really protects American shipping
(38:08):
interests and American shipmakers, and I'm fine with that, but
there should be a waiver for Puerto Rico. Puerto Rico
has been through a lot, a Category five hurricane, earthquakes,
the expiration of tax incentives that you've probably never heard of,
and a NonStop recession and emigration of millions. So I
(38:29):
really really want to promote the idea that the situation
in Puerto Rico is solvable, like anywhere else. A lot
of times we have to look at all of the
tools available to us, and in a lot of those cases,
the problems are political, not just economic. So thank you
to all of you for joining me for this episode.
I love Puerto Rico and I love talking about it,
(38:51):
and that's the whole point of Follow the Profit is
for you to learn more about what's causing our economic
and social problems and of course our political problem in
today's world. I'd like to thank Roderick again from invest
Puerto Rico. You can check out his work just google him.
I'd like to thank our hard working team of producers,
Rob Scott Cheyenne, as well as our executive producers New
(39:12):
Gingrich and Debbie Meyers. I'm your host, David Grasso. If
you like the show, give me five stars and leave
a review. We read those reviews and we would love
to hear your feedback. Follow the Prophet as a production
of GINGRAS three sixty and I Heart Radio. For more
podcasts from my Heart Radio, visit the I Heart Radio, app,
Apple Podcast or wherever you get your podcast. Part of
(39:34):
the Gingwich three six network
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