How this small island with unsurpassed opportunities became one of the most important innovation hubs of the Caribbean in less than 5 years.
Long known for its spirit of resilience, Puerto Rico has been recently getting attention from entrepreneurship stakeholders in the mainland United States and beyond because of the way the island has bolstered its knowledge base and entrepreneurial economy.
The pulse of Puerto Rico's startup ecosystem is indicating strong underlying dynamics. Funds available for startups in the forms of grants and private capital have grown 10 times compared to five years ago. Local technology companies are reaching millions of dollars in sales and finding new markets outside of the island. Also, research and development are receiving direct financial and technical support, while the agricultural sector is seeing a renaissance with a mix of entrepreneurship and culinary culture.
Most of these outcomes have a common denominator: their driving actors have received support from the Puerto Rico Science, Technology and Research Trust (PRSTRT), a private non-profit organization. Our organization has in turn received support from the U.S. federal government and other sources.
PRSTRT was created in 2004 to encourage and promote innovation, transfer and commercialization of technology and creation of jobs in the knowledge economy. It has pursued these goals by building capacity and promoting investment. The organization manages and operates over a dozen programs and initiatives that range from grants and technical support, to meetups and educational resources for researchers, entrepreneurs, farmers, investors, and other groups. Its major accomplishments are grouped under three main pockets of activity: Research & Development, Public Health, and Entrepreneurship.
The Trust's approach to tackling barriers to entrepreneurship
When building its portfolio of interventions, the Trust identified that one of the Puerto Rico’s recent and greatest challenges is the brain drain of the island's professionals. More than 50% of graduated engineers leave to the mainland United States, which has a direct impact in the development of the local entrepreneurial ecosystem. To address this major challenge, Entrepreneurship became one of the main pillars, with action via three fronts: Parallel 18; Colmena66 and the Resiliency and Business Innovation program.
a) Parallel18 (P18): creating a pipeline of startups
This an accelerator and incubator that has proven to be able to unlock the funding pipeline for entrepreneurs. It supports between 80 to 100 of companies each year and instils a global mindset by attracting founders from all different place of North, Central and South America, connecting them with expert mentors within the US. Since the program’s inception in 2015, 198 companies have been accelerated and over 606 jobs created. In 2020, we successfully completed the seventh generation of Parallel18 and we are currently running its eight generation. Some of the key performance indicators of the Parallel18 program are:
- Total amount distributed via grants
- Startups' total annual revenues
- Talent and job retention: percentage of foreign startup companies which maintain operations in Puerto Rico after the program
- Total amount private investment, and the share of local capital.
The P18 path to demonstrates openness to the approach of adapting programs to respond to emerging challenges. For instance, the Covid-19 pandemic called on Parallel18 leaders to deploy new tools and resources. We therefore launched and deployed a Business Continuity Fund to support previous participants, investing in 39 startups.
P18 has also developed other programs and efforts for strengthen its objectives in response to changing circumstances. For example, PRE18, is a pre-acceleration program launched after hurricane Maria, which during its two years and three generations, received 814 applications from Puerto Rican entrepreneurs with developed concepts or prototypes. These efforts (from Gen.1 and Gen.2) led to 33 Puerto Rican companies being selected for P18, demonstrating the quality and caliber of the pre18 pipeline that compete to join our international accelerator. On this month of November, the PRE18 Gen 3 is beginning sessions with 42 new companies.
Other innovative project was the creation of Parallel18 Corporate Innovation School, which exposes top employees of big companies to an entrepreneurial mindset, encouraging them to solve their company's most significant challenges using disruptive trends and technology.
Finally, "P18 Ventures" a follow-on effort that creates investment opportunities for P18Startups and P18Alumni, through an investment fund.
b) Colmena66: connecting and empowering
This program has created a platform where entrepreneurs can find all the necessary resources to build and grow their companies in Puerto Rico. When founded three years ago, Colmena66 was the newest member in a nationwide network of over 50 organizations of ecosystem builders.
SourceLink, Colmena66’s second family is an organization that helps communities with Research and Development to identify, connect, empower, and measure their entrepreneurial ecosystems. For the past three years, Colmena66 has consistently ranked among the top SourceLink affiliates in key performance indicators. In 2019, it ranked among the top five among more than 50 nationwide affiliates in the following categories: use of the tracking tool SourceLink Pro (#4), Searches Using Resource Navigator (#2), Network Strength (#5) and Counseling Hours (#4).
Despite the major challenges this year, Colmena66 increased the number of resource partners to 240. More than 2,300 entrepreneurs and business owners were served by Colmena66 and over 7,300 referrals were forwarded to our resource’s partners.
Colmena66 has had also a creative approach to adapt to the challenges that entrepreneurs face. The "Levanta Tu Negocio" initiative began the process of helping entrepreneurs and SMEs impacted by the earthquake and pandemic events with an assessment survey. The responses helped with the development of personalized action plans, customized checklists and referrals based on individual business needs.
On 2019, for the first time Colmena66 coordinated with the SBA the first SBIR/STTR Road Tour in Puerto Rico with the participation of 15 federal agencies and the Federal Laboratory Consortium, and just started a new program with the Puerto Rico Economic Development Department to delivery e-commerce online capacity building for small and medium business. This year, Colmena 66 published the second version to the Tu Camino Empresarial 2.0 and the first version of Tu Camino Agroempresarial to support agricultural centric enterprises.
c) Resiliency and Business Innovation Program (RBI): saving a generation of startups
Launched in April 2019, the RBI program has already received support from the U.S. Economic Development Agency (EDA) as an i6 grantee. This program provides business resiliency training; research support in documenting resiliency and development of proof-of-concept; educational support to businesses on resiliency methods and concepts, and assistance in soliciting Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funds. In a year 2020, over 1500 people and businesses have benefited from the products and services offered by the RBI, including training, research, webinars, technical support, mentoring, and business concept reviews.
Other key accomplishments of the RBI program include: series of training by International Disaster preparedness and recovery expert Leann Hackman, CEO of Economic Developers of Alberta, Canada, and author of the series of guidebooks “Master Your Disaster”, free of charge webinar series titled “Building a Resilient Business: Before, During, and After a Disaster” delivered by faculty members from George Mason University, designed to help individuals, businesses and communities prepare, respond, and recover from a disaster, and research funding for best practices used by a company, an industry sector, or a community that can serve as a model to replicate or the development of products and/or concepts which improves resilience following a disaster and has the potential for commercialization.
Lessons for other ecosystem catalyzer organizations
Although we cannot affirm there is a perfect formula to successfully promote entrepreneurship, we can confirm that these have been the key factors which have consistently sustained the Puerto Rico Science Trust's achievements to date:
Strong leadership: from its CEO to all their Directors and Managers, the Trust's leadership team share a great sense of purpose to create real long-lasting impact;
A global mindset: every PRSTRT initiative is designed with a potential global reach;
A collaborative vision with other innovation and entrepreneurship programs, investment funds and the private sector in the island;
Betting on talent: one of the islands biggest asset is its talent, and that is why the Trust has been supporting them in many forms like education, technical support and funding; and
The capacity to adapt: the PRSTRT financial, legal and administrative infrastructures have been designed to adapt to new scenarios and diverse projects.