The life sciences sector has been one of the areas most impacted by COVID-19. On the positive side, certain related products and devices experienced unexpected demand in the past year, thus increasing sector progress. On the negative side, the coronavirus led to the interruption of research and development in fields unrelated to the pandemic creating an essential need to make up for lost time. The fact is that, despite the challenges, more than a year after the declaration of a pandemic by the World Health Organization, life science is positioned to become an important contributor to economic growth during the recovery phase.
The growth of biotechnology and related sciences is broad-ranging from telemedicine and the need to accelerate its advances to more basic developments such as the supply of inputs and devices typical of the industry. For example, around 80% of biologically active ingredients come from China and India, making producing countries like the United States heavily dependent on such sources for product components. Therefore, an urgent need to diversify supply chains inspires nearshore or reshore manufacture of these inputs.
COVID-19 has taught life science companies the importance of having diverse supply chains and knowing in advance the risks their suppliers may face, as well as the relevance of being able to analyze data efficiently to make quicker decisions. These two lessons should generate opportunities for countries like Costa Rica in the coming years since a significant percentage of investment is expected to fund relocation as companies continue to move towards digitization.
Costa Rica has actively pursued becoming a major destination for the establishment of companies in the life sciences area, enabling the country to attract 13 of the top 20 OEMs. More than 70 multinational biotech and other life science companies are active here. Medical devices are the country’s main export, representing more than a quarter of Costa Rica’s total shipments abroad of which almost 54% are manufactured within the free trade zone regime. The export of medical devices during 2020 translates to $3.445 billion (sources: CINDE and COMEX).
Adding to these factors, Costa Rica’s experience in the technology sector and related areas such as data analysis, robotics, the internet of things, and research and development, place us in a position to increase the growth of existing operations and host new ones. As long as Costa Rica continues to attract Foreign Direct Investment of this type, works to improve its competitiveness, and reduces the digital divide, we can greatly benefit from participation in the enormous growth wave that life sciences promise.