Panama is an open and services-oriented economy and a cornerstone of international trade, reflecting its privileged geographic position, excellence in transportation logistics and strong air and seaborne transportation infrastructure. As Panama seeks to position itself within the global semiconductor value chain, its regulatory framework provides important incentives for prospective foreign investors and it has been actively investing in initiatives to promote semiconductor-related talent, research and innovation. Continued investment in talent, reliable utilities infrastructure and the development of a local ecosystem of semiconductor suppliers and customers could help Panama capitalise on emerging opportunities to develop its ecosystem for semiconductors. This report examines opportunities and challenges for Panama’s ecosystem for semiconductors and provides recommendations to foster its development. Using both quantitative and qualitative analysis, as well as insights from a diverse group of stakeholders, the report offers policy recommendations across four key themes: co-ordinating and aligning incentives through the recently established Commission for Innovation in Microelectronics and Semiconductors, investing in skills and attracting talent to develop a semiconductor workforce, developing an ecosystem of local suppliers and customers for semiconductor firms, and ensuring reliable and sustainable utilities infrastructure.
Promoting the Development of the Semiconductor Ecosystem in Panama
Abstract
Executive summary
The semiconductor industry, the backbone of modern digital and electronic technologies, is witnessing significant shifts in its global landscape. The high concentration of critical segments of the semiconductor value chain in a limited number of regions increases vulnerability to disruptions. In this changing landscape, economies are seeking to enhance the resilience of the semiconductor value chain through the development of local ecosystems and by strengthening their role in this strategically important sector.
Panama is seeking to capitalise on the opportunity provided by this changing landscape. This report analyses the ecosystem for semiconductors in Panama and offers policy recommendations to help its development. The report contributes to a better understanding of policy tools that can help enhance the resilience of the global semiconductor value chain.
The report examines both quantitative and qualitative evidence. Quantitative analysis focuses on the evolution and performance of the high-tech manufacturing sector in Panama, as well as key enabling factors such as market structure, integration into global value chains, enabling infrastructure and skills and workforce development. Qualitative analysis draws on interviews with governmental and non‑governmental stakeholders to map the institutional and policy landscape affecting Panama’s ecosystem for semiconductors, with in-depth analyses of the policies to support science, technology and innovation; entrepreneurship and the business environment; and education and workforce development.
Panama is an open and services-oriented economy and a cornerstone of international trade, reflecting its privileged geographic position, excellence in transportation logistics and strong air and seaborne transportation infrastructure. Although Panama is yet to engage in and integrate into the global semiconductor value chain, its regulatory framework provides important incentives for prospective foreign investors, and it has been actively investing in initiatives to promote semiconductor-related talent, research and innovation.
The OECD analysis suggests that continued investment in talent, reliable utilities infrastructure and in developing a local ecosystem of semiconductor suppliers and customers could help Panama capitalise on emerging opportunities to develop its ecosystem for semiconductors. To unlock this development, this report offers policy recommendations structured into four main areas:
1. Co-ordinating and aligning incentives, leveraging the recently established Commission for Innovation in Microelectronics and Semiconductors and supporting the implementation of the National Semiconductor Strategy to ensure good coordination with stakeholders and across policy instruments, including incentives offered to potential investors. Panama should focus efforts on select segments of the semiconductor value chain, while continuing with the modernisation and digitalisation of government services and leveraging granular data relevant for the semiconductor ecosystem that are available from different Panamanian institutions to inform policies for the semiconductor industry and other sectors.
2. Investing in skills and attracting talent to develop a semiconductor workforce by expanding science, technology, engineering and mathematics (STEM) and English education at the primary and secondary levels and by targeting semiconductor skills as part of its university and vocational education and training strategies. Panama should further enhance international collaboration in this area and attract foreign talent to help accelerate the development of a local semiconductor workforce. Panama should also tap into the existing labour workforce by facilitating transitions to formal employment through learning programmes and measures that support self-employment and entrepreneurship.
3. Developing an ecosystem of local suppliers and customers for semiconductor firms, by supporting entrepreneurial activity. This requires a two-pronged approach focused on demand through expanding on entrepreneurship training programmes and incubators, and supply through better access to early-stage financing. Panama should also enhance its support for semiconductor-related innovation, including by leveraging private funding for targeted semiconductor research.
4. Ensuring reliable and sustainable utilities infrastructure by further investing in a diversified, low-carbon energy mix and incentivising firms to adopt best available technologies for water and wastewater management. Panama should also continue efforts to enhance connectivity infrastructure.
With the right policy mix, Panama is well positioned to engage and integrate into the global semiconductor value chain. This would not only benefit Panama but would also contribute to diversifying semiconductor supply chains at a time when strengthening their resilience has become a priority.
