This post is part of How can Puerto Rico Develop an Autonomous Nation
As mentioned in that blog I will elaborate on the subject of Economy changes needed in that plan. These changes are vital in order to develop an autonomous and strong nation. The changes I suggested were the following:
- Lack of Accurate Information in a central place that is easy to understand
- Perform a swot analysis of the island and share it openly so that citizens can view a objective view of our condition
- Foster industry that can trigger high paid salaries and does not need a big territory to be performed in
- Change the way we value the price of stock it is wrong!
- Implement metrics all around for government on local supplier spending and device laws to favor local first
- Develop a plan to train local companies that want to provide service to government as part of their insertion to General Services and only those that comply can service the government.
The reason for each of my suggestions I will underline here:
1. Lack of Accurate Information in a central place that is easy to understand
- Problem: Most of our nations population don’t know about economy. There is a lot of confusion in the island and divided opinions on what we need to do and how. Lack of official, easy to access information is a big problem to our economy. Our people need guides and Information.
- Why?: Our Economic and Development Department haven’t develop tools of communications that are simple to understand and practical for the population to access and get accurate facts from. Cross help from other agencies to get the information out to the public is not established. The Population does not have a central source of facts this hinders our education and therefore our planning of how we can fix and develop our economy.
- Solution: Our Economic Development Department must not only focus on companies. They must have a program to educate our population with a KPI and Infograph system for our nation were we can have an at a glance view of our current state. Metrics that we should view are:
:: Unemployment Rate
:: Amount of persons under welfare checks with demographics
:: Openings available in the market for hiring
:: Amount of money exported (With a breakdown of how we exported)
:: Amount of money imported (With a breakdown of how we imported)
:: Amount of people emigrating (and reasons why)
:: Amount of people immigrating (and reasons why)
:: Total Produced Income by our national brute product
:: Other Important Key Performance Indicators (KPIs) of our economy
2. Perform a swot analysis of the island and share it openly so that citizens can view a objective view of our condition
- Problem: Many solutions to help redevelop our economy have failed. A lot of money is invested in these efforts that lack proper understanding of root cause of the issues.
- Why?: A lot of solutions have been implemented by politicians with invested interests on political favors owed to particular vendors. Other causes for failure are lack of information are the unavailability of information that can be used across government agencies.
- Solution: A PUBLIC SWOT Analysis must be made and published. The Population needs to know were we really stand in terms of our strength and weaknesses as a nation. We should then study islands with similar limitations as ours but that have a successful economic development system. We must develop a best practices approach on how we determine our next steps in our economic reforms.
3. Foster industry that can trigger high paid salaries and does not need a big territory to be performed in
- Problem: It is not a secret that we have a big geographical limitation for the expansion of our industry and as an island we are cut off from the mainland thus increasing our costs of transportation and logistics.
- Why? The focus I’ve seen in conversations of leaders are of industries such as agriculture and energy generation companies. This is wrong as we don’t have the geographical expansion necessary to generate enough volume of business to sustain a growing population. The landscape necessary will destroy our natural resources and ecosystem.
- Solution: A study needs to be held to determine global needs in terms of industry tat are correlated with jobs well paid and that do not require a high expansion of territory. Our economic development department should focus all his efforts in the gathering of this information and afterwards starting a plan to migrate our traditional models into a refined and well oiled economic engine.
4. Change the way we value the price of stock it is wrong!
- Problem: The way people value stocks is outdated and very very wrong. In a global economy we cannot behave anymore as we did 70-80 years ago. There are factors that must weight in how we value the stock besides end net year profit.
- Why? Big corporations are cannibalizing their territories and stripping down their own nations to enhance and cheat for their stock prices to go up. The quality of life, therefore of our people which impacts our productivity and future development of the same corporations factor in our newly rich and power classes. Tax heavens in the offshores, Offshoring of cheap labor and other ill advised practices that have damaged our once buoyant and thriving economies must be stopped. We have started a generational snowball effect by focusing on cannibalization that will still hinder us for generations to come by the damage already done by this no hold back profit driven seeking companies.
- Solution: Companies local investment in jobs, tax evasion practices and social responsibility in the business development side need to be measured as metrics for the valuation of their business. If a business offshores millions of dollars in labor to a foreign country thus hurting its local stock market to go up 2 dollars in their stock they should be viewed by the marketplace as the enemy thus their stock should go down. If a company reroutes profits to an offshore tax evasion heaven thus reducing government spending and contracting we must act accordingly with their stock. Companies especially Pharmaceuticals all the time are talking about quality right? what is a employee without quality of life? what is a nation without jobs? who can buy there products if they don’t give back to their communities? We must develop a metric system that gages how and why corporations shift profits and contract suppliers. If they make all they’re money from USA then let them spend it in USA paying taxes and contributing to Jobs in the USA.
5. Implement metrics all around for government on local supplier spending and device laws to favor local first
- Problem: Local government spends a very small % in local acquisition. This impacts our economy in a big way as the local government is one of the biggest spenders in the island.
- Why? Many solutions to manage government needs are already built in other territories. To increase chances of success or to adopt best practices and reduce costs are part of the reasons why Government officials elect to contract outside the local vendors.
- Solution: There are many things that can be done for this area starting by a law that mandates that projects over X amount in millions of dollars must have a plan on how the external company will hire a set portion of the project in the local suppliers. Local purchasing goals can be adopted such as the goals that federal government has for small and disadvantaged businesses.
6. Develop a plan to train local companies that want to provide service to government as part of their insertion to General Services and only those that comply can service the government.
- Problem: The low customer satisfaction index, risk, poor organization and cost efficiency make it many times impossible for local vendors to manage multimillion dollar projects, export or to provide service to suppliers such as the local government thus it is a factor that hinders their growth.
- Why? Local vendors need to incorporate industry standard service practices and methodologies to be able to provide service to foreign companies and be competitive. There is a big necessity to add world class perspective in our quality systems, project management and customer service methodologies for the small and medium businesses.
- Solution: Government contracts have a reasonable size to allow that as part of the contracting process companies adopt standards into their companies on theses three areas to ensure that after they graduate as vendors they can export their services to other governments and multinational companies. Our government GSA should be revamped and have set aside businesses and projects only for those who have invested in these systems as an incentive for companies to invest in their growth.