The transition to an innovation-driven industrial economic development policy: the road ahead for Puerto Rico

The Puerto Rico industrial economic development policy has been dominated by manufacturing multinationals that performed their product development outside the island. With the curtailment by Congress of special tax incentives to enterprises operating on the island, Puerto Rico must find ways to transform its manufacturing industry from a consumer of imported intellectual property, to a locally generated, innovation-driven industry. This paper looks into the different alternative strategies that may be attempted, discusses some of the factors that should be taken into consideration, and outlines several alternatives that have been developed by the University of Puerto Rico. Some of these initiatives include the creation of the technology incubator ViTeC, and the formation of institutes that spawn faculty-corporations such as the Innovation Development Assistance Institute (IDeAi), the Informatics and Telecommunications Development Institute (ITDI), the Institute for Innovation in Manufacturing and Education, and the Waste Conversion Institute (WCI).