Promoting the Development of the Semiconductor Ecosystem in Costa Rica

1. Assessment and recommendations

Abstract

This chapter presents the overall assessment and recommendations of the OECD semiconductor ecosystem study of Costa Rica. It highlights the Costa Rican key strengths in the global semiconductor landscape and identifies areas of potential improvement, focusing on co-ordination strategies, the business environment, human capital development and infrastructure investment.

Policy recommendations

Co‑ordination

• Signal Costa Rica’s long-term commitment to the development of the semiconductor ecosystem through an integrative approach between the National Strategic Plan (Plan Estratégico Nacional, PEN), the Semiconductors Roadmap and relevant national plans.

• Consider establishing a multistakeholder platform to help monitor and support the overall implementation of the Semiconductors Roadmap, the integration into global value chains and consensus building among all stakeholders.

• Continue developing evidence-based semiconductor policy, building on Costa Rica’s rich granular data and available analytical capabilities and adapting to developments in the ecosystem.

Integration into global value chains

• Continue facilitating trade in semiconductors by further improving the process for registering hazardous products, accelerating the modernisation of the electronic customs system and expanding digital scanning systems.

• Promote innovation and knowledge transfer by better aligning curricula, enhancing the role of the Costa Rican Promoter of Innovation and Research (Promoter), leveraging the development bank system and improving administrative capacities for intellectual property.

• Further develop the local semiconductor ecosystem by reducing administrative burdens for business creators and supporting start-ups and entrepreneurs, including through co-investment funds, business creation advisory services and enhanced investor matchmaking platforms.

Education and training

• Enhance the co‑ordination between government, industry and academia to better align education and innovation policy with semiconductor needs and national goals, in line with other co‑ordination efforts and executive actions.

• Increase agility and streamline the process of updating curricula at universities and vocational education and training (VET) providers.

• Invest in talent by promoting science, technology, engineering and mathematics (STEM) at all levels of education, including expanding access to both scientific and technical high schools and defining and allocating resources for a centre of excellence for engineering.

• Tackle high dropout rates in secondary education, notably in STEM careers, by expanding support for women and students from disadvantaged socio‑economic backgrounds.

• Continue efforts to improve English language skills in the workforce by strengthening English instruction at all levels of education and vocational training.

• Support the development of schoolteachers and VET trainers to keep abreast of the latest industry developments by facilitating the involvement of industry experts in VET.

Attracting and retaining talent

• Further simplify visa procedures and create dedicated pathways to attract talent to the semiconductor and other high-tech industries.

• Retain high-skilled talent through enhanced efforts to support innovation and entrepreneurship in the semiconductor ecosystem.

• Attract talent by promoting Costa Rica as a favourable destination for employment opportunities and facilitating easy integration into the labour market while ensuring that safety remains a priority at the highest level.

Infrastructure

• Prioritise investment in transportation and logistical infrastructure, notably roads and cargo capacity at main ports and airports.

• Continue efforts to provide green energy at competitive prices and ensure that both energy and water infrastructure are sustainable by further incentivising the participation of the industrial sector in decentralised electricity production and wastewater treatment.

Given supply chain diversification efforts, Costa Rica is emerging as a location of interest for some of the world’s largest semiconductor firms. Costa Rica’s strengths include a conducive regulatory environment for international businesses, a strong framework for attracting foreign direct investment (FDI), openness and effective measures to facilitate trade. It also offers a relatively skilled and experienced workforce, overall good infrastructure (notably energy and water) and the potential to capitalise on geographical proximity to the United States semiconductor manufacturing bases, as has already occurred with trade linkages in other high-technology (high-tech) industries such as medical devices and aerospace. Further investment in talent and infrastructure (notably transport) while supporting the development of local suppliers could further strengthen Costa Rica’s attractiveness to semiconductor firms.

This report contains recommendations to support the development of Costa Rica’s semiconductor ecosystem. Some of the recommendations below entail expenditure in key areas to develop the Costa Rican semiconductor ecosystem, which is important given the country’s potential for development. Costa Rica should assess all spending decisions carefully, with a view to retaining budget neutrality.

1.1. Co‑ordinate and align strategies to foster the semiconductor ecosystem

Co‑ordination across policy areas relevant to semiconductors, which fall under the responsibility of different ministries and governmental agencies, will be key to success.

1.1.1. Signal Costa Rica’s long-term commitment to developing the semiconductor ecosystem through an integrative approach between the National Strategic Plan, the Semiconductors Roadmap and relevant national plans

The Semiconductors Roadmap, launched in the context of the 2024 presidential Declaration of Public Interest in the Semiconductor and Related Industries, is an instrumental co‑ordination mechanism for governmental agencies to align medium- and long-term policy priorities and actions aimed at addressing infrastructure, workforce, regulatory and other challenges (see Chapter 3).

To realise the potential of the Semiconductors Roadmap as a long-term strategy in seizing the opportunity provided by changing global semiconductor value chains, Costa Rica could consider emphasising its commitment to the development of the semiconductor ecosystem in the National Strategic Plan, which outlines government priorities and contains milestones and indicators to be met over different time horizons.

Similarly, Costa Rica should leverage other national plans and strategies relevant to the semiconductor ecosystem, including, for example, the National Plan for Science, Technology, and Innovation (PNCTI), the National STEAM Education Strategy and continued efforts to enhance international trade. Continuing to build on the actions foreseen in the National Strategy for Employability and Human Talent (Brete Strategy) and the FDI strategy will also be instrumental for further developing the semiconductor ecosystem (see Chapter 3).

1.1.2. Consider establishing a multistakeholder platform to help monitor and support the overall implementation of the Semiconductors Roadmap, the integration into global value chains and consensus building among all stakeholders

Costa Rica should consider establishing a multistakeholder platform to help monitor and support the overall implementation of the Semiconductors Roadmap and integration of the local semiconductor ecosystem into global value chains, and to serve for discussions and building consensus among all stakeholders involved in this ecosystem.

Involving key semiconductor ecosystem stakeholders, i.e. business associations in related technological areas and key upstream (e.g. metal products, rubber and plastic) and downstream (e.g. medical devices, transportation) industries (see Chapter 2), labour representatives, civil society and academia, in developing policies to foster Costa Rica’s semiconductor ecosystem will be crucial to ensure that policies are actionable and take all important elements of the ecosystem into account. An informal platform for convening all semiconductor stakeholders could help inform the overall implementation of the Semiconductors Roadmap while assessing its impact in terms of jobs, economic growth and environmental and social development goals.

The Semiconductors Roadmap already foresees the creation of working groups involving industry and academia stakeholders to support the implementation of its four policy pillars: talent and workforce development, incentives, investment attraction and regulatory framework. These working groups should also be expanded to include perspectives from labour representatives and civil society.

In addition, a multistakeholder platform could provide a more holistic view of the overall implementation of the Semiconductors Roadmap (see Chapter 3). Participants in such a platform should be carefully selected and appointed by the different stakeholder groups to ensure they are representative of the diverse Costa Rican ecosystem.

1.1.3. Continue developing evidence-based semiconductor policy, building on Costa Rica’s rich granular data and available analytical capabilities and adapting to developments in the ecosystem

Part of the analyses in this report build on rich highly granular data through a methodology, designed in close collaboration with the Costa Rica Central Bank (Banco Central de Costa Rica, BCCR), that helps uphold data privacy and confidentiality (see Box 2.2). Developing the evidence base through analysing firm-level and other highly disaggregated data, including consistent trade data for semiconductor-related goods, is key to better understanding the semiconductor ecosystem and other parts of the economy. These highly granular data are an important input to the design of policies for monitoring changes in the dynamics of the industry, anticipating challenges, measuring the local footprint of foreign investments, and evaluating and assessing the impact of policies affecting the industry. Costa Rica should continue to invest in the underlying data infrastructure, allowing relevant administrations and researchers access and enhancing analytical capabilities to help inform policies, including those specific to the semiconductor ecosystem, while maintaining a strong commitment to preserving data privacy and confidentiality.

1.2. Enhance the business environment for better integrating both local and multinational semiconductor firms into global value chains

Costa Rica’s further integration into the global semiconductor value chain requires an active role in international trade, attracting FDI while, at the same time, developing a local ecosystem serving the multinational firms that are already active in Costa Rica. Costa Rica should support the development of local firms to engage in the semiconductor value chain, notably providing products and services to existing semiconductor firms (see Chapter 2). This would not only help grow a resilient local ecosystem but also attract additional FDI.

1.2.1. Continue facilitating trade in semiconductors by further improving the process for registering hazardous products, accelerating the modernisation of the electronic customs system and expanding digital scanning systems

Costa Rica should continue facilitating trade in semiconductors, including through measures such as increasing the capacity to process the registration of certain hazardous products, accelerating the modernisation of the electronic customs information system (ATENA) and expanding digital scanning systems to minimise physical checks.

Costa Rica has no significant barriers to international semiconductor inputs or outputs trade (see Chapter 3). The country is a signatory of several free trade agreements with key semiconductor economies and has taken action to facilitate trade through improved customs procedures. Costa Rica should continue identifying areas for further improvements, in line with the path of lowering barriers to international trade pursued thus far, such as measures to expedite clearance of goods at the border.

For example, increasing the capacity to process requests for the importation of chemicals needed by semiconductor firms would be a concrete next step to expedite imports of important inputs for semiconductor manufacturing (see Chapter 3). Costa Rica would also benefit from prioritising investments in technology to modernise customs procedures, including by ensuring the effective implementation of the new modernised ATENA platform. Other areas to consider include extending the deployment of digital technology to scan items at the border to reduce the need for physical inspections, for example leveraging non-intrusive inspection systems being deployed under Operación Soberanía, as well as further investment in land border facilities that allow joint and simultaneous control at a single point, such as the recently inaugurated facility at the Paso Canoas border with Panama.

Costa Rica should continue engaging with like-minded partners on strategies and mechanisms that help manage the risks of semiconductor value chain disruption, including through the OECD Semiconductor Informal Exchange Network.

1.2.2. Promote innovation and knowledge transfer by better aligning curricula, enhancing the role of Promoter, leveraging the development bank system, and improving administrative capacities for intellectual property

The semiconductor ecosystem would benefit from innovative local products and solutions for semiconductor firms. The development of such innovative start-ups would require measures to support innovation, such as efforts to better align higher education institution curricula with national innovation priorities by enhancing the role and capacity of Promoter, by leveraging the development bank system (Sistema de Banca para el Desarrollo) and by improving administrative capacities for intellectual property examination and litigation (see Chapter 3). Enhanced innovation and knowledge transfer would also benefit existing firms by providing further development and upgrade opportunities.

Costa Rica would benefit from reviewing the governance of research in higher education institutions to help better align with national priorities while ensuring that the independence of these institutions is preserved (see Chapter 3). The co‑ordination instruments described above, including the National Strategic Plan, the Semiconductors Roadmap and the proposed multistakeholder platform, could help ensure better co‑ordination amongst all innovation actors and define priority areas for research and innovation in semiconductors.

Enhanced support for innovation (e.g. through targeted research and development [R&D] grants and public-private R&D programmes, public-private collaboration through research institutes) in all technological areas, including emerging technologies and related semiconductor technologies, could also be considered. Innovation and entrepreneurial funding could also benefit from engaging the Costa Rican Sistema de Banca para el Desarrollo to develop dedicated financing instruments for innovative start-ups in semiconductors and other advanced technologies (see Chapter 3).

The Costa Rican patent law framework provides the appropriate protection, and domestic laws and regulations broadly align with international standards. Protection terms and requirements are consistent with those of international treaties, at least in the de minimis standards. However, improvements could be made in law implementation and overall enforcement. Having specialised capacity, particularly patent and circuit layout design examiners, could improve the efficiency and thoroughness of patent examinations and thus incentivise local innovators to register and commercialise ideas (see Chapter 3).

1.2.3. Further develop the local semiconductor ecosystem by reducing administrative burdens for business creators and supporting start-ups and entrepreneurs, including through co‑investment funds, business creation advisory services and enhanced investor matchmaking platforms

Successful semiconductor ecosystems are typically driven by strong linkages between several semiconductor firms and a thriving network of local customers, suppliers and the wider technical ecosystem. To date, Costa Rica has adopted an FDI-led strategy to encourage high-tech manufacturing, which has boosted the country’s export competitiveness and improved productivity for local services and manufacturing firms (see Chapter 3). However, in contrast to other high-tech manufacturing industries in Costa Rica, the electronics sector has seen little growth in value-added. It is becoming more concentrated over time, with the sector’s overall performance driven by a few, largely foreign players. To complement the existing semiconductor industry, Costa Rica could benefit from policies that encourage the development and diversification of the domestic semiconductor ecosystem to maximise spillovers from this industry to the wider economy.

Costa Rica could continue to build a resilient semiconductor ecosystem by strengthening linkages with existing domestic firms. Costa Rica’s successful medium- and high-tech industries are a potential source of downstream linkages with the semiconductor industry. For example, the medical device industry, whose employment and value-added more than tripled over the last decade, could provide an important source of local demand. However, there is more room to develop upstream linkages between local firms and the semiconductor ecosystem. Policies could seek to encourage links between the semiconductor industry and local providers of services, like cybersecurity or electronic waste management, or local suppliers (or recyclers) of inputs, like carrier tape used to protect and transport individual semiconductor components or metal lids used in assembly and packaging.

Proximity to local customers and suppliers (domestic or regional) is important for the semiconductor ecosystem as it lowers transportation costs and expedites production processes. Costa Rica should further enhance programmes such as the Linkages (Encadenados) programme and a dedicated semiconductor National Cluster Program (see Chapter 3) to support those suppliers while continuing to support the ecosystem for downstream industries such as medical devices, aerospace, computer parts and other important semiconductor-using industries.

A resilient semiconductor ecosystem requires fostering an enabling environment for entrepreneurs to develop local firms. Streamlining regulations for business creation would help support entrepreneurs considering setting up semiconductor and adjacent businesses (see Chapter 3). Concrete, helpful measures include relying less on notarial involvement for firm registration and legal formalities and ensuring that the digital one-stop shop for investment (VUI) programme is also adequate for establishing local firms.

Fostering an enabling environment for entrepreneurs to contribute to the development of the local ecosystem would be instrumental. Specific support measures could include helping start-ups and entrepreneurs through financial (public-private co-investment funds) and non-financial (matchmaking platform, business angel network, incubators and accelerators and advisory services) support measures (see Chapter 3). Considering an entrepreneurship awareness campaign followed by training at high schools and universities would help create the basis for a more entrepreneurial culture.

Entrepreneurs require access to capital to start new or expand young businesses. In this regard, a programme to attract venture capital investors in areas supporting the semiconductor ecosystem (materials science, software, cybersecurity) could help attract capital for start-ups in semiconductors and related businesses (see Chapter 3). Funding could also benefit from engaging the Costa Rican Sistema de Banca para el Desarrollo, for example, to develop dedicated funding instruments for innovative start-ups in semiconductors and other advanced technologies.

1.3. Promote the development of skills and human capital for semiconductors

To attract foreign investment and develop local firms, further development of human capital in Costa Rica is necessary. The country’s smaller population relative to other countries in the semiconductor value chain presents challenges to reaching the critical size required to meet semiconductor talent needs. Therefore, efforts to efficiently train workers (including technicians and engineers) for the different occupations required in the ecosystem, as well as efforts to train trainers, are particularly important in the Costa Rican context. Therefore, growing the semiconductor workforce and the pool of experienced trainers requires a multi-pronged approach that should include the domestic development of talent by tapping into underrepresented profiles, attracting talent from abroad by co‑operating with like-minded neighbouring countries and retaining high-skilled talent through enhanced efforts to support innovation and entrepreneurship.

Developing talent for the semiconductor industry could entail double dividends, given the similarities in the required skillsets with other industries such as medical device manufacturing (see Chapter 2), which is another important high-tech industry for Costa Rica (see Chapter 2).

1.3.1. Enhance the co‑ordination between government, industry and academia to better align education and innovation policy with semiconductor needs and national goals, in line with other co‑ordination efforts and executive actions

Better co‑ordination amongst university governing bodies could yield important gains for the future of the Costa Rican talent pool, including for the semiconductor industry. Actions in this area should be aligned with other talent development co‑ordination efforts in the context of the National Strategic Plan, the Semiconductors Roadmap, the National STEAM Education Strategy and the Brete employability strategy. As described in the recommendation, the talent and workforce development working group bringing together all of the stakeholders relevant to developing semiconductor talent (including labour representatives) would help with such co‑ordination efforts.

The National Council of Rectors (CONARE) and the National Council of Private University Higher Education (CONESUP) appear to have complementary roles and responsibilities for public and private universities respectively (see Chapter 3). Working together and co‑ordinating their efforts could result in successful projects to enhance education in semiconductor-related areas. Examples could include equipment-sharing agreements, jointly agreed curricula, joint courses to use specialised resources efficiently and joint efforts to tap into the potential of female students in STEM fields.

A successful strategy for developing semiconductor talent requires close collaboration with the industry to ensure that education and training efforts meet the needs of the industry. Stronger academia-industry collaboration, through the alignment of incentives for both firms and higher education institutions to engage in the sharing of equipment and staff (e.g. professors working in firms), in programmes for students to engage with the industry (e.g. summer internships) and in applied research and innovation projects could yield important benefits. These benefits include better-aligned curricula, trainers being up to date with the latest technologies and processes used by local firms, improved employability prospects for students, better-trained staff and more innovation (see Chapter 3). Enhanced collaboration would also help with technology transfer and the commercialisation of research.

Enhancing partnerships between academia and firms outside the Greater Metropolitan Area (GAM) could be a strategic move for Costa Rica’s economic growth and one that is aligned with the National Strategic Plan, the new FDI strategy and the new free trade zone (FTZ) regime’s incentives (see Chapter 3). Almost half of the technical graduates relevant to the semiconductor ecosystem reside outside the main urban hub (see Chapter 2), highlighting the country’s geographic diversity and the potential for opportunities outside the main urban hub. Nevertheless, most economic activity, including for the semiconductor industry, is concentrated in the GAM (see Chapter 2).

Better co‑ordination with the industry would help ensure that skill needs are met by higher education and VET. Strengthening the role of National Learning Institute (Instituto Nacional de Aprendizaje, INA) liaison committees in identifying required curricula changes and ensuring the co‑ordination and alignment between these committees and the key clusters identified by the National Cluster Policy (see Chapter 3) would help ensure that INA can better meet the workforce needs of the industry and support the development of key clusters (see Chapter 3).

Enhancing international co‑operation efforts through partnerships with foreign academic institutions (e.g. teacher and student exchange and dual certification programmes) could help tap into expertise available abroad, not only for the workforce but, above all, for trainers (see recommendations below).

1.3.2. Increase agility and streamline the process for updating curricula at universities and VET providers

Semiconductor technology advances rapidly and ensuring that the Costa Rican workforce is well-prepared would require a more agile system for updating academic curricula. Efforts to simplify curricula update processes, including delegation of approval steps to subject matter experts could be considered (see Chapter 3).

The July 2023 reform of the body tasked with regulating and supervising private university education, the National Council of Private University Higher Education (CONESUP), is an important step and is expected to provide private universities with additional agility. The National Council of Rectors CONARE could use existing flexibility and enhance efforts towards further aligning the curricula of public universities with industry needs (see Chapter 3).

The process for updating curricula amongst VET providers could also be more agile. Enhanced collaboration with the industry could help align the supply of VET with the demand, notably in high-demand areas such as mechanics, electromechanics and robotics. Enhancing efforts to collaborate with industry would be key to developing additional and more successful dual programmes, which would be particularly welcome in relevant semiconductor areas (see Chapter 3).

For example, identifying steps that could be expedited in creating new technical high school (CTP) training standards (e.g. streamlining the timeline for regulatory approvals) could help provide the necessary responsiveness of CTP training. Strengthening the National Qualification Framework and updating it more regularly could help better align VET to semiconductor industry needs.

The provision of relevant VET for semiconductors by INA and the National Technical University (UTN) should be further strengthened. INA could further enhance its apprenticeship programme and tailor it to the semiconductor industry. Collaboration with the industry in VET would be particularly important because it would enable INA and the UTN to implement flexible, easily adjustable apprenticeship programmes that give students a direct pathway into the industry (see Chapter 3).

1.3.3. Invest in talent by promoting STEM at all levels of education, including expanding access to both scientific and technical high schools and defining and allocating resources for a centre of excellence for engineering

Investing in education and skills development programmes to enhance human capital is necessary for innovation and productivity growth. Public-private partnerships should be encouraged to help mobilise resources for education infrastructure development and education initiatives.

STEM disciplines are the backbone of skills needed in the semiconductor workforce for both technicians and engineers. According to a recent talent survey focused on semiconductors conducted by the Ministry of Foreign Trade (COMEX), the semiconductor industry will need to increase its workforce by more than 25% by 2026 (see Chapter 2). To meet this demand, educational institutions should start tailoring curricula to equip students with the necessary skills and qualifications and increase enrolment in STEM careers. Additionally, emphasising English proficiency (see recommendation below) and developing socio-emotional skills, such as communication and interpersonal abilities, is crucial for success in the semiconductor industry (see Chapter 2).

The national ambitions in the semiconductor field should translate into financial support to STEM disciplines in public universities. Goals and specific indicators could help universities access earmarked funding dedicated specifically to core semiconductor courses such as electronic engineering, mechanical engineering, mechatronics or materials science, as well as semiconductor-specific programmes, allowing, for example, for investment in professors, research assistants and equipment.

For example, the 2024 Funding for Higher Education (FEES) agreement aims to increase the percentage of first-time students enrolled in high-demand career fields, such as STEM areas, from 41% in 2023 to 45% of first-time students enrolled in these careers by 2026. Enhancing the role of the liaison committee that monitors compliance with the goals should be enhanced (see Chapter 3).

Increasing the number of female graduates in STEM, as outlined in the Brete employability strategy, led by the Ministry of Labour and Social Security, and also foreseen by CONARE, after FEES negotiations, is an important goal that contributes to enlarging the domestic pool of talent for semiconductors while increasing diversity in the sector’s workforce (see Chapter 3).

A centre of excellence for engineering sciences, with cutting-edge infrastructure, can help underpin a wider culture of excellence in academia and the STEM workforce, including for the semiconductor ecosystem. In the same vein, leveraging the Centre of Excellence, an initiative led by the Ministry of Science, Innovation, Technology and Telecommunications (MICITT) and INA, will help enhance technical training for the semiconductors workforce and help materialise international collaboration opportunities in this area (see Chapter 3).

The Ministry of Public Education’s efforts to promote STEM in all tracks (academic and technical) for both boys and girls, alongside initiatives to foster partnerships with local municipalities to leverage the Community Innovation Laboratories - an initiative led by MICITT in collaboration with municipalities, universities, public libraries and community organisations - for educational purposes are important steps in the right direction. In addition, a clearer focus on programmes tailored to the semiconductor industry (e.g. technicians and the track for engineers), coupled with an increase in the speed and agility of curriculum development and equipment provisioning, will be critical for Costa Rica to fully leverage its potential as a key player in the global semiconductor ecosystem (see Chapter 3).

Scientific high schools are a specific type of high school that is public and free, with a track record of successfully promoting education in STEM areas. However, they are limited in number and capacity and thus are accessible to only a few. Enhancing specialised scientific education to help generate highly talented individuals would require making scientific high school opportunities available to more students, increasing the capacity of higher education institutions of excellence and expanding the scientific school approach, including in disadvantaged communities (see Chapter 2). Strengthening the support for students from disadvantaged backgrounds to help ensure access (see above) would need to be part of such a strategy.

Similarly, ensuring access to and strengthening the role of CTPs are important considerations. Recent efforts by CTPs to offer dual training represent meaningful progress. It would be important to continue expanding dual training offerings at CTPs, including specialised training on semiconductors, in collaboration with semiconductor firms.

1.3.4. Tackle high dropout rates in secondary education, notably in STEM careers, by expanding support for women and students from disadvantaged socio‑economic backgrounds

Costa Rica’s level of adult educational attainment is lower than the OECD average. Graduation rates in tertiary STEM fields are 10 percentage points lower than first-time enrolment rates and this gap is larger for women. This suggests substantial dropouts in STEM pathways. At the secondary education level, students from higher-income families are more likely to enrol in educational programmes, while those from disadvantaged socio-economic backgrounds face significantly higher dropout rates (see Chapter 2).

Existing support (e.g. scholarships or loans as described in Chapter 3) is an important step to help expand the pool of female talent and students from disadvantaged socio-economic backgrounds in STEM. Costa Rica should strengthen existing measures to address the high dropout rates between lower and upper secondary education, including expanding targeted support for children from disadvantaged socio‑economic backgrounds.

1.3.5. Continue efforts to improve English language skills in the workforce by strengthening English instruction at all levels of education and vocational training

English language skills are particularly important for the semiconductor industry because most equipment manuals and in-house training modules are available in English, and firms must regularly interact with international suppliers and customers along global value chains. Efforts to further develop the four English language skills (writing, speaking, reading and listening) would raise the capabilities of the Costa Rican labour force for semiconductors and other parts of the economy.

To address this challenge, Costa Rica should expand English language instruction throughout the education pipeline, beginning in primary schools and work with CONARE and CONESUP to explore opportunities for more university classes taught in English. The 2024 FEES agreement foresees an increase in the percentage of graduates with proficiency in English at the Common European Framework of Reference for Languages B2 level, which is an important step in the right direction.

The recent COMEX skills survey suggests that English proficiency is a critical skill but presents a persistent challenge (see Chapter 2). Engineering degrees in Costa Rica do not always include English courses in their curriculum and graduates from some public Costa Rican universities face employability constraints due to limited English proficiency (see Chapter 3). Nevertheless, the ability to offer programmes in English is a major advantage for Costa Rican universities. For example, some public universities offer English for Specific Purposes courses, including a master’s degree at the National University of Costa Rica. Providing more courses in English as part of graduate programmes in public and private universities would help raise English proficiency.

INA also provides training in English but for specific fields such as call centre services and facilities assistance (see Chapter 3). Broadening this effort to other fields, including those related to the semiconductor industry, could further strengthen workforce readiness. Training technicians in English enhances their employability and facilitates firm-specific training provided by international firms.

The Semiconductors Roadmap’s explicit emphasis on enhancing English language skills as part of its “Human talent and workforce development” pillar (see Chapter 3) is an important signal of commitment to raising English proficiency in Costa Rica.

1.3.6. Support the development of schoolteachers and VET trainers to keep abreast of the latest industry developments by facilitating the involvement of industry experts in VET

Providing qualified teaching staff is crucial to ensure the quality of education and training and raise education outcomes. For school teachers, this could be achieved by improving the hiring system, e.g. by implementing the eligibility test to select new teachers (as established by law in 2020), providing more opportunities for career development and training while strengthening the teacher appraisal process, as noted in the 2023 OECD Economic Survey (OECD, 2023[1]).

Costa Rica would also benefit from enhanced measures to develop, attract, certify and train VET trainers. VET systems should be sufficiently flexible to enable engagement from industry: involving semiconductor professionals in instruction can help ensure VET systems remain responsive to industry needs and reduce burdens on existing full-time staff. Costa Rica can build on the existing flexibility to encourage partnerships with industry and have more industry experts engage in VET training (see Chapter 3). Seeking highly specialised “trainers of the trainers” from abroad to fill in existing gaps domestically would need to be part of a broader strategy for attracting workers from abroad (see section on retaining high-skilled talent below).

Regular teacher assessment and support for training schoolteachers and VET trainers in collaboration with universities and industry would be particularly important to ensure high-quality training. Aligning the requirements between VET teachers in INA and CTPs and working with foreign institutes to engage in exchange teacher programmes for learning in a technical foreign language would also be actions to consider (see Chapter 3).

1.3.7. Further simplify visa procedures and create dedicated pathways to attract talent for the semiconductor and other high-tech industries.

Further simplifying visa procedures and creating dedicated pathways to facilitate the entry of highly qualified individuals could help attract talent, with priority given to senior experts who could act as trainers of the trainers. A special visa for researchers and highly qualified experts could benefit the semiconductor and other high-tech industries, with possible positive spillovers for the national innovation system (see Chapter 3). Partnerships with countries in the Americas region to help train the trainers should also be further enhanced, as described in Chapter 3.

1.3.8. Retain high-skilled talent through enhanced efforts to support innovation and entrepreneurship in the semiconductor ecosystem

In 2021, almost half of the surveyed sample from the scientific diaspora indicated that they left the country to study and subsequently settled abroad. Data show that industrial maintenance workers in the diaspora are unwilling to return to Costa Rica (see Chapter 2). This represents untapped potential talent that could fuel the Costa Rican semiconductor ecosystem and broader manufacturing.

While less affected than other Latin American and Caribbean countries (see Chapter 2), Costa Rica should remain vigilant and focus on limiting potential “brain drain”, which would help support the local high-tech manufacturing sector, including the semiconductor ecosystem. Actions should focus on providing incentives to stay, including by improving local labour market conditions rather than imposing measures to prevent emigration. Programmes to bring back talent should focus on ensuring long-term and high-quality opportunities for employment and entrepreneurship for returning Costa Ricans (see Chapter 3). Enhanced efforts to support innovation, business creation and entrepreneurial activity to support a highly dynamic and resilient domestic Costa Rican semiconductor ecosystem (see Chapter 3) could provide new opportunities for highly talented individuals.

1.3.9. Attract talent by promoting Costa Rica as a favourable destination for employment opportunities and facilitating easy integration into the labour market while ensuring that safety remains a priority at the highest level

Developing additional talent in Costa Rica requires attracting and retaining professionals with considerable semiconductor and related experience who can teach at university and high schools.

Attracting talent from abroad (both foreign and from the Costa Rican diaspora) would benefit from a well‑designed strategy to promote Costa Rica as a country in which to live and work. Tools such as language programmes (including Spanish for non-native speakers), relocation services to help integration into local communities and society, improved transport infrastructure and transport services, as well as connectivity, education, childcare and healthcare near the location of the designated areas for semiconductor investment (notably if outside the GAM) would also be important incentives for talented individuals from abroad to join the Costa Rican semiconductor ecosystem. In parallel, working with the Costa Rica Tourism Board to promote Costa Rica as a favourable country in which to work and live could be envisaged (see Chapter 3).

Streamlining and expediting the process for the recognition and equivalency of diplomas obtained abroad should also be considered. A clear and agile framework for recognition of qualifications can also facilitate attracting high-skilled foreign talent.

Attracting and retaining talent in a competitive global environment will require continuing and fostering Costa Rica’s reputation as a safe and stable country. Effective and swift measures to address any growth of organised crime should remain a priority at the highest level.

1.4. Invest in infrastructure needed for semiconductors

Costa Rica offers good energy and water infrastructure and a strong commitment to environmental protection and sustainability. Ensuring that the necessary infrastructure is in place to accommodate the expansion of the semiconductor ecosystem requires prioritising continued investment in transportation infrastructure, notably roads and cargo capacity at main ports and airports.

1.4.1. Prioritise investment in transportation and logistical infrastructure, notably roads and cargo capacity at main ports and airports

Available transport infrastructure meets current needs but has considerable room for improvement. Given the challenging fiscal environment, infrastructure planning should prioritise investment in roads to connect the ports and airports with desirable locations for new manufacturing and semiconductor investment, which could be determined through the stakeholder consultation platform described above. These plans should also include sufficient resources for road maintenance. Moreover, investment in the public transportation system would facilitate commuting and make additional locations more attractive, notably outside the GAM (see Chapter 3).

Additionally, capacity to process cargo at airports and ports should be expanded. While investment into increasing the capacity at Puerto Caldera is timely and should be prioritised, the cargo areas at Juan Santamaria and Daniel Oduber Quirós International Airports should be expanded to accommodate future growth.

Benefitting from regional logistical platforms with neighbouring countries could provide an alternative insofar as the road infrastructure (i.e. National Route 2) is improved and border crossing is made seamless (i.e. in line with the customs improvements at Paso Canoas).

Efforts to improve transportation and logistical infrastructure should align with measures to improve related digital infrastructure, including actions that help facilitate trade (see Chapters 2 and 3).

1.4.2. Continue efforts to provide green energy at competitive prices and ensure that both energy and water infrastructure are sustainable by further incentivising the participation of the industrial sector in decentralised electricity production and wastewater treatment

Policy actions supporting the development of a semiconductor ecosystem should remain compatible with Costa Rica’s commitment to environmental protection and sustainability.

A strong focus on renewable sources characterises Costa Rica’s energy supply: renewables represented 99% of electricity sources in 2022, which makes it attractive to investments by multinationals with strong sustainability targets. Costa Rica should continue efforts to provide green energy at competitive prices. Efforts to facilitate the auto-production of renewable energy by firms and greater diversification of renewable energy sources (e.g. increase the contribution of solar sources in the mix) could help the grid meet increasing needs (e.g. electrification of transport) and balance disturbances resulting from climate change, e.g. hydropower (about two-thirds of electricity generation) is increasingly affected by drier seasons.

Further promoting competition in the electricity market, notably on generation and retail supply, and relaxing barriers to private sector participation would boost innovation and competitiveness in the sector. Recent efforts in this direction, notably the 2022 law for distributed renewable energy resources, represent meaningful progress (see Chapter 3).

While Costa Rica’s current water policies provide a robust framework for sustainable water management, it should consider incentivising firms to adopt the best available technologies for water conservation, recycling and treatment. Allowing for the integration of firms’ water treatment systems and capacity with the broader local water network could result in important synergies.

Support for R&D of innovative technologies in this area would be particularly important, notably if resulting in an ecosystem of cleantech start-ups that could support the energy- and water-intensive semiconductor industry (see Chapter 3).

Finally, meeting the objective of extending FDI beyond the GAM could be an opportunity to develop technological parks in areas that minimise utility infrastructure investment needs, are well-served in terms of transportation and are located near pools of talent (see Chapter 2 for the geographical distribution of the electronics sector and Chapter 3 for an overview of incentives, including within and outside the GAM).

References

[1] OECD (2023), OECD Economic Surveys: Costa Rica 2023, OECD Publishing, Paris, https://doi.org/10.1787/8e8171b0-en.