Representative-at-large Governor Aníbal Acevedo Vilá has a well-defined high-tech future in mind for the US Commonwealth of Puerto Rico, which is home to about four million residents. His vision departs sharply from the typical perception of Puerto Rico as a tourist playground and laid-back US province. The governor sees the commonwealth as a hub for biotechnology/life sciences and aerospace ventures that will enrich the island while maintaining its pristine beauty.

Mr Acevedo Vilá currently governs Puerto Rico and is up for re-election this year, following the US election cycles. He spoke to fDi from his offices in San Juan, the capital and Puerto Rico’s largest city.

“We’re moving to a knowledge-based economy. While Puerto Rico is known for its beautiful beaches and climate, not many people are aware of the impact of pharmaceuticals and other high-tech industries on this island,” says Mr Acevedo Vilá.

Indeed, the governor has made ‘Bio Island’ a top priority in his administration. Recognising his efforts, the Biotechnology Industry Organization, a global association of biotechnology companies, named him Bio Governor of the Year in 2006.

Political distractions

But it is not business as usual on the scenic island striving to be a bio-hub. In the midst of his economic development pursuits and an election year, the governor has become embroiled in charges of campaign violations. News has broken in the US and Puerto Rican media that he may face indictment, though no such action had occurred at the time of press.

Mr Acevedo Vilá has contended in press conferences and in public that he is the unjust victim of a political prosecution from two sides – Republicans in Washington who control the justice department and his local political rivals in the pro-statehood New Progressive Party.

“There is an investigation into alleged violations of campaign contributions. The officials from the governor’s political party and his campaign have been fully co-operating with investigators while he keeps his focus on what is important for the people of Puerto Rico – that being economic development, his major priority,” says Juanita Colombani, the governor’s press secretary.

She says the governor continues to focus on promoting biotech manufacturing and R&D activity on the island.

In the pipeline is an ambitious 20-year development project called Science City that brings together the academic, medical and scientific communities. The medical campuses and botanical gardens of San Juan’s University of Puerto Rico and its Mayagüez campus will be central to development of the island’s life sciences sector (see In Focus, below).

Clear potential

Puerto Rico has established itself as a manufacturing powerhouse over the past 40 years, helping it lure leading-edge pharmaceutical and technology-based companies to the island. In total, 164 Fortune 500 companies and 62 Fortune 100 companies operate in Puerto Rico, says a government spokesperson. Currently, 15 of the 20 top-selling drugs sold in the US are produced in Puerto Rico, as are 50% of pacemakers sold in the US. At least 18 major pharmaceuticals, organised into 34 manufacturing operations, have a business presence in Puerto Rico.

Foreign and US investments in the commonwealth remain one of its strong points. Puerto Rico is a gateway to South America, the Caribbean islands and even Africa. Major trading partners include the Dominican Republic, Germany, Ireland, Japan, the Netherlands, the UK and the US.

Investment in biotechnology has grown to more than $4bn from companies such as Amgen ($2bn) Eli Lilly Co ($1.2bn), Abbott Laboratories, Merck and Bristol-Meyers Squibb.

The aerospace and computer science industries also have increased their presence, with more than $123m in recent combined investments from Microsoft, Hamilton Sundstrand, Honeywell Aerospace, Infotech Aerospace Services and Lockheed Martin, says a spokesperson for the governor’s office.

Big investment

Major investment in the island’s future comes from the Puerto Rico Science, Technology and Research Trust. This public-private group is developing a one million square-foot life-sciences corridor as part of the area’s universities. The governor has signed off on a 20-year master transformation plan.

The idea is to create a knowledge corridor to tie together research facilities now being constructed and the education, medical centres and medical science campus of the University of Puerto Rico and its extension campuses.

The plan includes transferring the 83-acre Oso Blanco state penitentiary into a four-phase biotech corridor to expand the island’s life science industry beyond its reputation for pharmaceutical manufacturing. The first construction phase of the project, dubbed ‘Science City’, is set to begin once the prison site is transferred.

Puerto Rico is home to 12 major agriculture-biotech companies, says Luis Rodriguez-Rivera, the trust’s executive director. The island wants to expand that specialty further and become a tech incubator.

“We’re looking to serve as the host to all types of small-scale research activity in order to spin off those companies. Given the synergies that are going to be developed in this corridor, we’re also gong to have institutional companies wanting to have lab space there,” says Mr Rodriguez-Rivera.

One pilot project at the Anderson Cancer Center involves extracting compounds from tropical coral that are believed to help ward off cancer. The first phase would consist of infrastructure as well as incubator space that the group will operate with the University of Puerto Rico and other institutions, he adds.

The attraction

What is spurring the high-tech migration to Puerto Rico? “It is a productive, very business-friendly environment,” says Mr Acevedo Vilá. As a US commonwealth, the tax structure is also business friendly because Puerto Rico falls outside the US tax requirements.

“It’s what we have some leverage on,” he says. “[Investors] get American security and intellectual property laws along with controlled foreign corporation status. Because of its commonwealth status, Puerto Rico can offer investors US regulatory standards and protection along with offshore tax benefits. It’s a combination that can’t be matched anywhere.”

“Companies that locate here have the same offshore benefits as they would in Singapore, South America and Ireland, but they also have the legal protections and intellectual property rights offered on the US mainland because they are on American soil,” he adds.

“We’re in the top 15 in the nation for graduating engineers at every level. Recently we were number one in chemical engineering graduates in the US.”

Nonetheless, unemployment on the island is high because technology initiatives are still relatively new and skill levels must rise. Current data shows unemployment at about 11%, even with a well-educated, bilingual workforce.

To build infrastructure and talent to support business, Mr Acevedo Vilá says the government must make sure interest in life sciences and technical skills starts at K-through-12 education levels, and continues through college.

“We are going to create the infrastructure for research and create synergy between basic scientists, clinical scientists and private entities right in the middle of the city,” he says.

IN FOCUS:

LIFE SCIENCE DEVELOPMENTS

A 20-year knowledge corridor plan in Puerto Rico aims to complete the first 250,000 feet in the first five years. Construction of the life sciences corridor will increase in phases of 250,000 square-feet in each five-year period. Luis Rodriguez-Rivera, the Puerto Rico Science, Technology and Research Trust’s executive director, says implementation could vary depending on the speed with which projects develop.

Of the 1000 acres needed, the government is contributing an 83-acre former penitentiary site to launch the four-phase biotech campus that will help broaden the island’s life science industry beyond just pharmaceuticals.

The University of Puerto Rico (UPR) and its Rio Piedras campus, a Medical Sciences Campus, Botanical Garden and University Medical Center will be linked with current and future projects, including a 90,000 square-foot molecular science facility slated to be completed in August 2009; a 40,000 square-foot expansion of the Puerto Rico Cancer Center; a 5000 square-foot Botanical Garden to conduct research on medicinal and poisonous tropical plants; and a 17,000 square-foot building dedicated to research for UPR researchers, bioprocessing facilities and a training area at the UPR campus in Mayagüez.

CURRICULUM VITAE

ANÍBAL ACEVEDO VILÀ

2004

Commonwealth of Puerto Rico

Governor

2000

US House of Representatives

Resident commissioner

1997

Popular Democratic Party

President

1992

PR House of Representatives