Once the decision has been made to manufacture outside of the United States, the next major question that needs to be answered is: if not here, where? China has long since been the default answer for many companies, but with increased tariffs, rising labor rates and lengthy transit time, some are considering nearshore as their first choice and for good reason. As far as brand awareness is concerned, Mexico seems to be the front runner, but we’d argue that Costa Rica is poising itself to take the title in the next few years.
We have some fast facts below for you showcasing why this friendly little country in Central America may be the answer to your manufacturing dilemmas.
EASE OF COMMUNICATION
- English is already their second language, but in 2018, the Costa Rican government introduced a national strategy to significantly increase the coverage of the country’s English teaching even more.
- Costa Rica operates in Central Standard Time, making it easier to stay on top of communications. E-mails can be tended to faster, conference calls can be scheduled during working hours, and those it-can’t-wait-till-morning questions can be answered urgently.
- Costa Rica boasts a 98% literacy rate, putting it on par with the United States and ranking above both China and Mexico.
- Their workforce is highly educated, with the quality of their education system leading Latin America and, again, placing higher than both China and Mexico.
SKILLED, YOUNG WORKFORCE
- The labor pool in Costa Rica is 2.3 million, with 35% of the country’s population falling between 15-34 years old.
- The number of university engineering graduates has steadily risen at a rate of 7.1% since 2010, making the availability of engineers higher than in Mexico
- Labor rates, too, are highly competitive. As an example, monthly wages for Quality Assurance Engineers and Plant Managers in Costa Rica average 14% lower than in Mexico.
EXPEDITED LOGISTICS AND UNIQUE GEOGRAPHY
- The average full container ocean freight lead time from Costa Rica to the East Coast of the United States is 10-12 days versus 35-40 days from China. Time is money, remember?
- Costa Rica is uniquely positioned with ports accessing both the Atlantic and Pacific oceans.
- With 14 free trade agreements in place, including the U.S. and China, Costa Rica provides access to 57 global trade partners.
- Flights are made short and simple from the United States. There are more than 1,000 international flights leaving and entering Costa Rica weekly, including daily flights from Atlanta, Los Angeles, Houston, Orlando, Fort Lauderdale, Miami, New York City and Newark. These flights take only hours versus days, with air time from Atlanta clocking in at a mere four hours and New York City lasting only five.
While they may currently be known more for their coffee and pineapples, mark our words; Costa Rica is the next big player in the nearshore advanced manufacturing game.
With so much to offer, you may now be curious if this is the right choice for your company. We’ve put together the flow chart below to help you decide if this is an option worth exploring in more detail.