analysis of human capital development in puerto rico

8/2/2019 Analysis of Human Capital Development in Puerto Rico

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Analysis of human capital development in

Puerto Rico: summary and conclusion

How is Puerto Rico retraining its workforce to

meet the demand of global competition?


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Human Capital Development

Deming (1982) in Out of the Crisis said:

The wealth of a nation depends on its people,

management, and government, more than its

natural resources

Adam Smith (1776) in Wealth of Nation said:

The wealth of a nation depends on its people


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Human capital describes the education, skill

levels and problem-solving abilities that

enable an individual to be a productive worker

in the global economy

Failure to develop human capital can lead to

high levels of poverty, unemployment,

illiteracy and other social ills


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Human Capital Development -

Problem

Demographic shifts will cause labour shortage

by :

The retirements of the baby boom generation

A younger workers who may lack adequate

education and experience to replace baby

boomers


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Solving Problem

Many develop country that lack of naturalresources emphasis on their workforce

Example : Japan

In 1950, the country had a reputation for inferior andcheap goods but now, the countrys products aresynonymous with quality and Japanese economy is oneof the largest in the world (Deming 1982)

Example : Singapore

Singapores success is often attributed to

a strong emphasis on developing and investing in itshuman capital (McLean 2004)


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Solving Problem

The well-being of nations depends on theknowledge and skills of its people.

Maintaining national and organizational well-

being continually depends on human capitaldevelopment.

However, successfully developing human

capital presents challenges to all nations,particularly Caribbean countries such asPuerto Rico


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Puerto Ricos economic and

workforce history

One of the worlds most developed Latin

societies

Transform from an agricultural to an industrial

and now a knowledge-based society.

Three aspects contributing to Puerto Ricos

development

Plans

Policies

Organizations.


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Puerto Rico 2025A comprehensive long-term

vision and strategic plan.


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Puerto Rico 2025 - Plan

Puerto Rico 2025 addresses all aspects of

economic, social, environmental and

infrastructure development.

Strategic goals with an emphasis on

innovation and enterprise

human capital productivity

job creation

small business development and support

greater government agility


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Puerto Rico 2025 - Plan

Economic Plan 2006 emphasis on:

Advancing infrastructure

Creating a centre of excellence in biotechnology,

engineering and computing

Promoting local enterprise

Transforming the tourism industry

Reducing dependence on petroleum

Transforming government operations.


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Puerto Rico 2025 - Policies

Offer an aggressive tax incentives to foreign

investors 100% exemption on pioneer

industries

Education Investment

Developed ViTec, the University of Puerto Ricos

incubator programme

Industry University Research Consortium

(INDUNIV), a joint private and public consortium

with a mission to award research grants


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Education Investment

invested 9.6% of its GDP in the University of

Puerto Rico system and placed emphasis on

science and technology


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Developing human capital

Government-sponsored employment training.

These programmes offer wage subsidies or

reimbursements of up to 100%.

As an example, the department of education offers a High

Skills Programme that provides specialized training to

intermediate management, supervisors, instructors and

technical workers.

Puerto Ricos citizens have access to on-the-job training,

vocational education, apprenticeships and customized

training


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Puerto Rico 2025 - Organizations

Puerto Rico Industrial Development Company

(PRIDCO)

A government-owned organization, promotes Puerto Rico

as an ideal investment location for industrial development.

Emphasis is placed on promoting high technology

industries among sectors such as the life sciences,

renewable energy, technology, computing and services.

It offers services for corporations including developingbusiness strategies and providing industrial buildings.


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Puerto Rico 2025 - Organizations

Puerto Rico Technoeconomic Corridor, Inc.

(PRTEC)

A conglomerate of public and private entities with

common economic and social interests, united to facilitateand enable Puerto Ricos economic development.

PRTEC focuses on the commercialization of new and

innovative technologies. The goals of this organization

include promoting Puerto Rico as a centre of high-techexcellence and improving the quality of life for citizens by

attracting new businesses, job creation and retention and

supporting entrepreneurism


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(Puerto Rico) Challenges and Obstacles

Globalization creates new competitors.

Reduce in competitive advantage such asmanufacturing and pharmaceuticals.

Social problems such as illiteracy, inadequate

K-12 education, skills migration andgovernment dependency purportedly increase


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Puerto Rico 2025

Reskilling Efforts


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HCD - (Puerto Rico 2025)

Reskilling Efforts

Barriers

High cost of energy

The bureaucratic process

Lack of accessibility to people who need reskilling

Trouble in maintaining a skilled workforce

And adherence to certain US regulations.

As a US territory, Puerto Rico cannot act on its own in

certain areas.


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Reskilling Efforts

Enablers

Interesting Tax Incentive attract a highly skilled

workforce and a quality higher education system.

The entrepreneurship focus at the community

level, reduction of government jobs and sharing of

employees across private companies.

By entrepreneurship helps citizens realize theircreative potential


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Reskilling Efforts

Initiative

In private sector they emphasising on R&D.

Within the manufacturing industry, efforts to

reskill the workforce have been in the areas of

Total Quality Management (TQM), process

management, Six Sigma and Lean


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Reskilling Efforts

Initiative

In the Government level, they introduceWorkforce Investment Act (WIA)

WIA aims to induce displaced employees intoentrepreneurships.

WIA partnered with the Department of Labor (DOL)and SHRM to develop mentorship modules such asinterviewing skills and business acumen.

Government hosts workshops for people on how to set-up a small business. These workshops support thegovernments emphasis on entrepreneurship.


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Reskilling Efforts

Initiative measurement :

WIA is not working very well because fail to fulfilexisting workforce needs

Not enough initiatives in place to reskill themanufacturing workforce

Fail to measure the effectiveness of the programeven after getting Phillips ROI certification

Lack of any long-term systematic partnerships fordeveloping the biotechnology and aerospaceportions of the workforce.


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Puerto Rico - Finding

Puerto Rico are often challenged by economic and

social issues compounded by high migration rates of

skilled workers.

Barriers to Puerto Ricos reskilling efforts include an

inadequate K-12 public education system,

government bureaucracy, inadequate needs

assessment and analysis for training initiatives andlack of collaboration between government and

businesses to address workforce needs.


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Puerto Rico - Finding

A number of enablers for Puerto Rico to reskill itsworkforce. The island possesses a highly skilled andexperienced workforce, quality higher education and

appealing tax incentives to attract businesses. Studies show the probability of biotechnology and

aerospace technology absorbing the number ofindividuals trained for such jobs are very low.

These efforts could result in an unnecessarily highnumber of people prepared for jobs that may notexist


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Puerto Rico - Recommendations

Need to conduct proper needs assessments.

Otherwise, Puerto Rico will train individuals

for jobs that do not exist and will never exist

Needs to encourage a spirit of collaboration

and cooperation. There appears to be a need

for systematic coordination of programmes

among the private and public sectors


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Puerto Rico - Recommendations

Shared partnership between educational

institutions, government, community agencies

and the private sector to develop policies and

programmes that will benefit both the employeeand the organizations for which they work

Implement a system for measurement and

evaluation such as Phillips ROI Methodology toquantify the effectiveness of training

programmes


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Thank you!

analysis of human capital development in puerto rico

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