0:00

I'm David Grosso and you're listening to

0:02

Follow the Profit. I'm

0:09

David Grosso here with another episode of Follow

0:11

the Profit. Today, we're going to talk about a US

0:13

territory that has been constantly in the

0:15

news in recent years. I'm talking, of

0:17

course, about Puerto Rico, a beautiful

0:19

island. If you've never been there, I've been there many

0:22

times. I love Puerto Rico. It's a great vacation

0:24

destination. But these days we mostly

0:26

hear about Puerto Rico, unfortunately

0:28

in a negative light, and specifically that's

0:30

because of Hurricane Maria, which devastated

0:33

the island in But

0:36

as with anything else, in crisis, lies

0:38

opportunity. So we're gonna talk to a guy who's

0:41

living in Puerto Rico, and he's the CEO

0:43

of invest in Puerto Rico, an organization

0:45

that has brought thousands of jobs and

0:48

millions of dollars into the territory. And

0:50

if you haven't heard about it,

0:52

Puerto Rico is actually the home to a

0:55

big group of entrepreneurs who are moving there

0:57

for many, many reasons, and we're

0:59

going to talk about that today in our

1:01

episode. So joining me is Roderick

1:04

Miller. How you doing I'm good.

1:06

Thanks for having me. It's good to be here.

1:08

So Puerto Rico. You

1:10

know, we tend to think of Puerto Rico

1:12

as two things. One, of course, one

1:14

of the largest Hispanic groups living in the

1:16

United States and too amazing

1:19

weather and beaches. But for your job,

1:21

you try to entice companies and entrepreneurs

1:24

to move to Puerto Rico. Why Puerto Rico,

1:27

you know, it's it's it's a great question. It's

1:29

it's at the core of what we do day in and day

1:31

out. Our organization invest

1:33

Puerto Rico was set up specifically for the

1:35

purpose of promoting Puerto Rico as a

1:37

destination location for high impact companies.

1:39

In other words, were measured based on our

1:42

ability to bring in quality jobs to the market

1:44

and private investment and h And

1:47

it's very simple. We go out and

1:49

we meet with business

1:51

leaders, decision makers, c suite executives,

1:54

investors to tell the story of Puerto

1:56

Rico. We try to shift the narrative

1:58

of Puerto Rico on a on a noble scale.

2:01

Uh, We're trying to shift it from one of crisis

2:03

to one of opportunity and resilience. And

2:05

and we try to provide quality data and

2:07

access to information for them to make good decisions.

2:10

Well, and and then that and that brings us

2:12

to your question, Rod, you still haven't answered my question.

2:14

Why Puerto Rico. It's a very

2:17

it's very simple. You're talking about a

2:20

place that has the highest concentration

2:22

of women engineers in the entire country.

2:24

You're talking about the sixth largest concentration

2:27

of STEM graduates in the world, uh,

2:29

thirty five by one hundred island that has eighty

2:31

eight universities, uh, the number

2:33

one pharmaceutical manufacturer in

2:36

the country. UM, none of the You

2:38

noticed that we've not talked about tourism or any of

2:40

that stuff. Tourism is only about seven percent of our

2:42

economy. So while many people

2:44

think of to Puerto Rico as a tourism hub,

2:47

we're really, quite frankly, uh kind

2:49

of a business hub, not

2:51

for the region, and we'd like to and we'd like to grow

2:54

business even more. And so we we try to tell the story

2:56

of why one dollar invested

2:58

in Puerto Rico is going to yield

3:00

more than one dollar invested somewhere else. And we believe

3:02

that really comes down to the caliber of the talent that we

3:04

have here. Uh. The Moxinus

3:07

of this of this of this market in terms of trying

3:09

to do something different and and

3:11

of course we've got world class incentives that

3:13

help facilitate those investments. Yeah,

3:17

let's talk about one of those incentives, perhaps

3:19

the most famous one that I hear a lot from these

3:21

crypto millionaires is much

3:24

lower taxes. I mean specifically

3:28

almost no federal tax So can

3:30

you tell me a little bit about that. Yeah, you know, that's

3:32

one of those things where we we we

3:34

um. Puerto Rico recognizes

3:37

some of the challenges that it's had, whether you're

3:39

talking about the storms

3:42

of the past or whether or the financial

3:44

crisis, and unfortunately we're coming out of all of

3:46

that. But one of the things that Puerto Rico has been

3:48

very judicious about is leveraging.

3:51

One of the benefits of it's

3:54

being a territory is some

3:56

control over its tax policy. And

3:58

so in that and in these incentives

4:01

are very clearly to offset, you

4:03

know, uh, perceives challenges

4:05

or in some cases perhaps real challenges

4:08

and really make the market attractive. So anyone

4:10

that moves a business here that's doing

4:12

exporting or exporting either

4:15

a good or a service, the corporate income

4:17

tax rate for those businesses is

4:19

uh four percent uh. And

4:21

then for the individual that moves here

4:23

more than half the year and makes appropriate

4:26

investment, there are caveats all these things, but

4:29

they are personal income tax goes to zero zero

4:31

percent. And

4:34

so that's a compelling that's a pretty

4:36

compelling case to move into Puerto

4:38

Rico by itself, which is, you know, you can

4:40

move to Puerto Rico, make an investment that matters

4:42

in a place that matters, and actually

4:45

be better off from a tax perspective because of

4:47

it. And so we we did. We definitely don't shy

4:49

away from that. But what we find is that while some

4:51

may be attractive because of our tax code, um

4:54

people come and they stay because of the value

4:56

that we offer as a business market. So

5:00

for someone like you, Roderick, when you moved to Puerto Rico,

5:02

do you immediately see a rise in your salary

5:05

because I mean a lot of times federal

5:07

taxes specifically, never mind state taxes

5:10

right in places like New York and California,

5:12

that's that's a big chunk of your

5:15

take home pay. Yes, if

5:17

if one meets the meets the qualifications

5:19

in terms of making the kind

5:21

of investment on the island, etcetera.

5:24

Then yes, they would, they would see a bump

5:27

in there and then and what they what they take home and

5:29

and it's a great it's a great value

5:31

that the market really really provides. And

5:34

I will say this Puerto Rico, that's just one

5:36

of many incentives. For example, there's a Young Entrepreneurs

5:39

incentive that for entrepreneurs under

5:41

the age of thirty five, the first half

5:43

a million dollars of that they earn an income,

5:45

it's tax free. Uh. And they don't necessarily

5:47

have to be in in in one of the other

5:49

businesses that that's exporting the services,

5:52

just because they're young entrepreneur that's chosen

5:54

to come to the market of Puerto Rico. Um. There's

5:56

also special tax breaks

5:58

for doctors and healthcare professionals

6:00

because we want to make sure that we build up our health care

6:03

system. So Puerto Rico has really tried to leverage

6:05

its incentive code in a very strategic way

6:07

to build an economy that not just you know, allows

6:10

people to earn more money, but builds an economy

6:12

that's competitive in terms of the types

6:14

of talent and the types of investment that

6:17

we have here on the island. So

6:19

what's it like living over there? So, and how

6:21

long have you been there? Tell me about it's a hard job,

6:23

but someone has to do it. Uh

6:27

No, I've been here about three years and I

6:29

love it. I'm also you know, I'm a father with

6:32

four children, uh and and

6:34

my wife, So it's interesting

6:36

bringing our family over here and having them

6:38

actually have a different kind of experience.

6:40

You know. My kids go to school that's a

6:42

bilingual and you know, and they're all

6:44

speaking Spanish at different levels, but they're all

6:46

speaking Spanish and that's great. Um.

6:49

For fun. On the weekend, we might go to one of

6:51

the charcoals or watering holes, you know, ten

6:53

or fifteen minutes from our house, or we may go hiking

6:55

in the mountains. So the lifestyle

6:57

is a lifestyle that's very attractive as well. Um.

7:00

You know, Puerto Rico is one of those places

7:02

that most people, but

7:04

for a conversation with me or someone unlightning,

7:07

often doesn't think of it as a place to live. But it's

7:09

an absolutely fantastic

7:12

place to live because, uh,

7:14

you have five different ecosystems

7:16

in thirty five square miles,

7:18

you have easy access to the United States,

7:20

and you have a warm uh

7:23

culture and and and and with friendly people.

7:25

So Puerto Rico is a great

7:27

option. So

7:30

what happens so I

7:33

come from You know, I've recently moved away

7:35

from their Orlando. We have

7:37

half a million Puerto Ricans living in Central

7:39

Florida now. In fact, I used to work for the

7:41

Telemundo affiliate there and they recently announced

7:44

that they're going to start sharing the Orlando

7:46

News in San Juan and vice versa.

7:48

Because these communities are so connected,

7:51

it's part of your work trying to attract the diaspora

7:54

back because as we know, there are

7:56

more Puerto Ricans in the living in the

7:58

United States than on the actual island.

8:01

So a big part of what the way we see

8:03

our value. We're not just trying to bring

8:06

jobs we're trying to bring We're trying to build

8:08

an economy strategically, and there are several pillars

8:10

of that, but one of the most important pillars

8:13

is really smart people. Uh. The

8:17

number one driver of investment decisions by

8:19

companies is can I find people

8:21

with the capacity, with the skills with it

8:23

to help my company be more innovative and

8:26

be more productive. And one

8:28

in Puerto Rico, unfortunately, our number one export

8:31

is really smart people. I mentioned

8:33

the AD eight universities earlier. I could

8:35

also talk about, you know the fact that

8:37

we've got the leading number of the astronauts

8:40

or scientists working at a

8:42

NASA, their whole varide of things where Puerto

8:44

Ricans have been able to gain world

8:47

class education on the island or

8:49

or go state side for these this education,

8:51

and we struggle to gain that talent back

8:54

because by and large, salaries are about

8:56

thirty percent less than the island. And so

8:58

you tell any young persons this actually, uh,

9:00

coming out of school, just by hopping

9:03

on the front plane and going to Florida, your salary

9:05

is gonna take at bump. Uh.

9:08

That's uh, that's becomes very attractive

9:10

and part of what we were trying to do and in best Puerto

9:12

Ricos figure out how do we actually push

9:15

the quality of jobs on the island

9:17

up so that there so that we can attract

9:19

more people and bring

9:21

many of the people who have left back home. We find

9:24

by and march um that people

9:26

that are from the island want to come back um,

9:28

but when they leave, many times they maintain

9:30

the familiar relationships that struggle

9:33

to have the business ones. So there are variety of efforts

9:35

across the island. Uh, from our

9:37

partners that like, for example, there's a group called Complimentiels

9:40

and they've got a major diaspora initiative

9:43

trying to bring um bring folks

9:45

back. I when I took this job

9:48

three years ago, I was there

9:51

were Puerto Ricans that reached out for me from place as

9:53

far away as Thailand, Sweden,

9:56

just around the globe. And part of what we recognize

9:59

is that that talent, we

10:01

need that talent in Puerto Rico. We need that investment

10:04

in Puerto Rico. So we're trying to figure out how do we do

10:06

that. Part of the work that's really interesting is

10:09

we've opened up an office in New York and we've also

10:11

opened up an office in San Francisco, and

10:13

in both of those places, we've got a

10:15

significant number of Puerto Ricans

10:17

who have left the island who are now in senior leadership

10:20

positions in tech and pharma, et cetera,

10:22

who are all aged and want and

10:24

they're asking us for ways of how to

10:27

work with us to help bring new attract

10:29

new investment to the island. So that's it's very

10:31

exciting. So you've been

10:33

doing this for three years. What type of businesses

10:35

have you brought to the island. One

10:39

of the things that we've uh we we

10:41

brought quite a few business is one of the businesses that very

10:43

excited about as biosimilars in side.

10:46

I mean, as I mentioned, Puerto

10:48

Rico has the largest pharmaceutical manufacturing

10:50

sector in the country, with fourteen billion dollars in

10:53

exports all last year, ninety

10:55

thousand jobs in that sector on the island. Um

10:58

And but traditionally it's been the very

11:00

big companies. We've got fourteen of the twenty largest

11:02

pharmaceuticals in the world that have have manufacturment

11:05

here. Uh And so what

11:07

we've seen as of late is we've been able to

11:09

bring in more on the research

11:11

and development side of that and

11:13

uh and specifically in new technologies.

11:16

We have a history, deep history and pills generic

11:19

some of those things, and we'll continue to work in those.

11:21

But for example, this company, but

11:23

these companies are gene self

11:25

therapy is more like personalized medicine,

11:27

so they figure out how to actually use

11:30

gene cells to solve for issues ranging

11:32

from blindness to cancer, uh

11:34

to to other major challenges. Another

11:36

good company that that that we recently

11:38

brought here was called seven Eagle, and seven

11:41

Eagle is a company and the

11:43

tech based cyber security company,

11:45

and we worked on that with but

11:48

our partners at the Department of Economic Development, but

11:50

also with the poly Technic. I wanted as any

11:52

ray see that it's poly Technic and one of the universities here

11:55

and uh, that company is

11:57

training veterans and their spouses in

11:59

cyber security and they also provide

12:01

cybersecurities consulting services. So

12:04

those are the kinds of things that we're doing, uh,

12:06

and we're excited this this past year,

12:08

we were able to bring five thousand new jobs

12:11

to the market with an average

12:13

wage of those jobs of sixty six thousand

12:15

a year. So we want to bring more jobs,

12:18

jobs with better wages and ideally

12:20

higher quality investment that repositions

12:23

Puerto Rico. We're kind of the long term,

12:25

long term economic sustainability.

12:37

Most of the time I spend my time Roderick

12:39

trying to explain to people that government isn't

12:42

as large as a force as people think. But

12:44

I think Puerto Rico is one of those counter examples.

12:46

Right. It's in a weird political

12:49

situation with the mainland United States,

12:51

and additionally, a lot of the recession in Puerto

12:54

Rico, which has been ongoing really for

12:56

more than a decade, has a lot to do with Congress

12:59

and expiring X credits and the

13:01

pharmaceutical industry leaving, etcetera.

13:04

What part of your job is political to make

13:06

sure that in Washington they're paying

13:08

attention to Puerto Rico, because

13:10

a lot of Puerto Rico's problems, contrary

13:13

to popular belief, are political.

13:16

They're made up by Washington politicians.

13:19

Yeah. I think that the two

13:21

hundred year history of Puerto Rico as

13:23

a territory of the United States and

13:25

the five hundred year history of Puerto Rico

13:28

as a territory or colony in general

13:30

has has been one that's really the

13:33

island of Puerto Rico has struggled to

13:35

um really drive

13:38

its own fate and determine its own

13:40

path. Uh. And of course, currently

13:42

the federal government makes

13:45

a lot of those decisions regarding

13:47

kind of policy as it relates to investment

13:49

policies that relates to opportunity in Puerto Rico.

13:52

From from from my share, uh, we

13:55

work with whatever administrations

13:57

in office to make sure that they have good, good

13:59

information about the market. In many

14:01

cases, while Puerto Rico is part of the United

14:03

States, it seems otherworldly

14:06

to Washington politicians, and it becomes, uh,

14:09

it becomes a talking point versus actually

14:11

a meaningful discussion. So a lot of

14:13

my job is spending time with the

14:16

legislators and and the

14:18

executive branch as well to make sure that they

14:20

understand, uh,

14:22

what the economy of Puerto Rico looks like

14:24

and why Puerto Rico's in many cases a

14:26

solution for many of the challenges on the

14:28

mainland. Last year, when the pandemic happened,

14:31

of course we were all flored, but our

14:33

economic development strategy at that time was

14:35

not really focused in terms

14:37

of attracting more pharmaceutical companies because

14:39

we didn't see a path prior to the pandemic

14:42

of those companies choosing to move back

14:44

towards the mainland or near shore because

14:46

the cost differential was just too great. But

14:49

when it became evident that American

14:51

citizens were not going to have access to

14:53

the needed um equipment

14:56

and then needed a medical UH supplies,

14:58

they needed Puerto Rico springing action and

15:01

have been able to actually be part of the solution

15:03

ensuring of the supply chain in the

15:05

pharmaceutical sector. So it's a

15:07

very interesting dance that we're on one

15:10

hand, um, many Americans,

15:12

mainland people and politicians don't

15:14

know a lot about Puerto Rico. But on the other

15:17

hand, Puerto Rico plays such a big role

15:19

in providing needed medical

15:22

equipment as well as a

15:24

as a medical pharmaceutical

15:26

products to support the mainland. And

15:29

and that's a point of pride here on the island. Yeah.

15:32

I have a friend who owns the pharmacy in Miami and

15:34

when her came Maria hit, her number one complaint

15:37

was I'm out of I v s, I'm out of fags,

15:40

I'm out of generics. And it was a lot

15:42

because those products come from Puerto Rico,

15:44

and a lot of the things you see in hospitals and

15:46

in pharmacies or sourced from the island. So

15:49

I want to talk about one very specific political

15:51

issue because a lot of times politics we

15:53

speak in you know, generalities

15:55

and you know whatnot. But there's a specific

15:58

law on the book. So I'm referring to the Jones

16:00

Act of nineteen seventeen. And

16:02

if people don't know what that is, it's basically

16:05

that, you know, you have to use an

16:07

American ship to ship

16:09

things inside of the United States, which really doesn't

16:11

matter for most of us. Right. But for Puerto

16:14

Rico, that means if you have Dominican sugarcane,

16:17

right, you have to put it on an American

16:19

boat most of the time, take it to Jacksonville,

16:21

Florida, and then bring it back

16:23

to Puerto Rico. So Puerto Rico

16:26

has higher costs across the

16:28

board because of this antiquated law.

16:31

And I think it's really nonsense that

16:33

that still exists, or at least why isn't there

16:35

an exemption for Puerto Rico. So are you

16:37

guys working to try to repeal the Jones Act?

16:40

No, and yes, and so

16:42

I'll answer that very carefully. The

16:45

know is that we do not do any lobbying.

16:48

Um we have given our status. We really

16:50

focus on educating about different about

16:53

different policies in their impacts, so we don't

16:56

really address things from a political lens.

16:59

That said, the Jones

17:01

Act, you you summarized

17:03

it very well, and it creates an

17:05

unequal opportunity for Puerto Rico

17:07

to participate in the global economy because

17:09

of goods being higher costs

17:12

coming into the island. And they also represent

17:14

a challenge in terms of Puerto

17:17

Rico's ability to compete even in terms of

17:20

as a Logistics Hub. Given our

17:22

strategic location there there

17:24

our port and our three international

17:26

airports. There are some things that where we could be completing

17:28

on the global scale, uh that

17:31

that are also inhibited by the Jones

17:33

Act. But from the from the port perspective

17:35

and then from the air perspective of the

17:37

air transhipment issue, and we were able to fortunately

17:40

recently get a waiver, a

17:42

two year waiver UH so that goods

17:44

coming in through the air would not have to

17:46

pay uh exorbitant fees

17:48

for loading and unloading goods and cargo and

17:50

people. And so we've had we've had very

17:53

bad policy, uh

17:55

that in terms of its economic impacts, both

17:57

in terms of the Jones Act as well

17:59

as UH prior restrictions regarding

18:01

air cargo. Yeah,

18:04

and I hate this a lot of times. You know, really,

18:06

if you want to think about poverty in Puerto Rico,

18:09

the cost of living is an invisible

18:12

tax on everyone. So I

18:14

I would be highly for maybe not repealing

18:17

the Jones Act, but maybe you know, giving Puerto

18:19

Rico a break they've been throwing up. So

18:22

how about debt in Puerto Rico.

18:24

So a lot of the initiatives, I imagine your

18:26

initiative and I haven't asked you. This comes

18:28

out of the restructuring of the

18:31

massive amounts of debt. I think last time I checked

18:33

it was in the mid eighties of billions

18:35

of dollars, almost the same as the state

18:37

of New York, which is of course a much larger

18:40

economy. So what is Puerto Rico doing,

18:43

uh, you know, politically and economically

18:45

to solve its debt problems and to build the economy

18:47

of tomorrow. Yeah, very

18:50

good question. I mean one of the things is so one

18:52

of the things that happened is initially, uh,

18:54

Puerto Rico wanted to go through bankruptcy project

18:57

process internally, and

18:59

that was vetoed by Congress. But ultimately

19:02

there was a solution that was reached through the Fiscal

19:04

Oversight and Management Board. And so now there's

19:06

a Fiscal Oversight and Management Board that's in

19:08

place that has been in charge

19:10

of figuring out how to restructure the debt

19:13

and how to ideally make

19:15

sustainable investments. One of the one

19:18

of the uh, one of the tension points

19:20

that we navigate with

19:22

the with the group such as the Fiscal

19:24

Oversight and Management Board. And I think they made some very good

19:26

decisions regarding kind of reallocation of assets

19:30

and restructuring the

19:32

debt. But there's a tension between

19:34

the idea of cutting um

19:36

of of cutting programs and cutting

19:40

things, and and the idea of investing. And

19:42

I think that's a kind of a dance that Puerto Rico

19:44

is going to continue to need to navigate. Uh.

19:47

You can't cut your way out of the out

19:49

of some of the pain that we're in. Some of it

19:51

is actually you have to grow your way out of it, invest

19:53

your way out of it. And that's an ongoing

19:56

challenge. For example, we we launched something called Impeller

19:58

recently, which is the program aimed to

20:01

bring more private investors to invest

20:03

in projects on the island because

20:05

we know that there needs to be kind of private

20:07

investment on the island, that needs to be smart

20:10

public policy on the island, and

20:12

there needs to be kind of a thoughtfulness about where

20:14

we want to go. Uh. In terms of

20:16

the type of economy we want long term, I would

20:19

say historically, I don't think there's

20:21

been enough force sight around

20:23

thinking what kind of economy do we want

20:25

five and fifteen years? And

20:27

I think you know, the process of restructuring the dead

20:30

is actually creating that room for Puerto

20:32

Rico for the first time in a very long time to look

20:34

out into the future and say, how do we build

20:36

where we want to be? Well,

20:38

I think you're absolutely correct that Oversight Board

20:41

is also you know, finally bringing much

20:43

need to change to politics, which is

20:45

funny because Puerto Ricans are

20:47

are a group that are highly studied

20:49

by political scientists because on

20:51

the island they have some of the highest

20:54

turn out rates in the world for

20:56

elections. You know, anything about Puerto

20:58

Rican culture. Politics is the now sational pastime

21:01

in Puerto Rico. But for some reason,

21:03

when Puerto Ricans migrate to the United

21:05

States, they don't vote in

21:07

these large numbers as they do on

21:10

the island. So I think what you're saying, the fiscal

21:12

Oversight Board, you know, finally trying to

21:14

sway politics towards long term thinking,

21:17

is a very positive development in Puerto Rico.

21:19

So and speaking of long term development, I want to ask

21:21

you about the grid in Puerto Rico because we saw

21:23

Elon Musk, you know, talking about how

21:25

he was going to help Puerto Rico after Hurricane

21:28

Maria. People were without power

21:30

for months. I have a friend who spent

21:33

over a year working on the grid

21:35

and you know, helping people in Puerto Rico.

21:38

How how is that going over there?

21:40

Are the lights on? Do they stay on? Do

21:42

they still need investments in their grid? I

21:44

mean, I would tell you what's really exciting.

21:46

We've got over eighty billion

21:49

in federal investment coming down

21:51

the pipe in the island to rebuild

21:53

the entire infrastructure,

21:55

not just the electrical side of things,

21:58

but also the road infrastructure,

22:01

the schools, uh and so I think

22:03

that's what's really exciting is that we're

22:05

at a place where we're seeing the kind

22:07

of investments needed to sustain and make

22:09

the economy competitive over time. The

22:12

realities, you know, there are always ups and

22:14

downs in these but there's a partnership between

22:16

the prep of the islands utility as

22:19

well as LUMA, a private

22:21

firm, to try and figure out how to you know, get

22:23

to the generation levels that we need to

22:25

be as well as to get to the distribution at

22:27

level we need to. There's been a goal set

22:30

that by the island would be renewable

22:34

and so that's been a very

22:36

aggressive law and we're seeing

22:38

activity not just from the private

22:41

side where from or from the from

22:43

the utility side, but we're seeing a lot of private

22:45

activity. We run an energy

22:47

committee that has over thirty different U

22:50

alternative energy companies from around

22:52

the globe that are working with Puerto

22:54

Rican businesses, working with Puerto Rican Residential

22:57

prop UH project, working with Puerto

22:59

Rican and sopalities to figure out how do

23:01

we actually provide a level of continuity,

23:03

resiliency, redundancy in

23:06

terms of the power supply. So those are

23:08

things you know that that are are part

23:10

for the course after a major UH,

23:13

after a major disaster such as you know,

23:15

earthquakes or hurricanes. But I'm

23:18

optimistic that we're moving down the right path.

23:22

So how do you end up in Puerto Rico? We've talked

23:24

a lot about your job and the organization.

23:27

I know we went to the same school. We both studied

23:30

government. How did you, your wife

23:32

and your four children end up

23:34

leaving the mainland for paradise? What's

23:37

your secret? You know? There

23:39

I was for the last twenty years, I've

23:41

been working on economic development,

23:44

led the recovery of New Orleans

23:46

after Hurricane Katrina, led

23:48

the recovery of Detroit during the bankruptcy

23:51

of the city. And when this opportunity

23:53

emerged, I was at the place personally

23:55

where I wanted to actually be

23:57

able to provide my family with the with the global

24:00

a different experience, and so it was the right opportunity

24:03

at the right time, and my background

24:05

ground happened to a line with where this

24:07

organization was trying to go. Um it's

24:10

been a great journey. Uh.

24:12

You know, doing economic development

24:14

is there's not really anything

24:16

I'd rather do because part of part

24:19

of what I love about it is the breath

24:22

of the skills, whether we're

24:24

working on an issue related to workforce development

24:27

or a marketing campaign to attract new companies,

24:29

or working with or working with our

24:32

energy committee to figure out how to help a new

24:34

facility, a new manufacturer

24:36

that's coming to town have the level of backup

24:39

support they need. Um. This,

24:41

this, this field is

24:43

really a field that I enjoy doing,

24:46

and they have the opportunity to doing it in

24:48

such an amazing place that has such

24:50

tremendous promise, smart people,

24:53

a beautiful landscape, a

24:55

rich history and culture, a bilingual

24:58

mark, a bilingual workforce,

25:01

and the list goes on and on and on and on. There's

25:03

really a dream country country. So I love what I do.

25:15

So what parallels do you see? Because I've been to New

25:17

Orleans in Detroit. I especially like New

25:19

Orleans. Who doesn't like New Orleans beignets

25:22

and good music and fun. What parallels

25:24

do you see from places in the United

25:27

States that are actually pretty economically

25:29

competitive. You're talking about three places that

25:31

where the cost of doing business is fairly low.

25:34

There's a lot of culture, there's a lot of existing

25:36

infrastructure, and there's a lot of untapped talent.

25:39

So is it an easy cell? But

25:41

I think they also have one negative thing

25:43

in common, which is, uh, what's

25:45

the polite way to say this, uh, corruption,

25:49

low levels of you know, economic

25:51

development that exists. So how

25:53

do you how do you market these type of places that

25:55

are not, you know, historically

25:58

associated with wealth like New

26:00

York and San Francisco. Will say, it's

26:03

it's an interesting quandary. I would I

26:05

would say, you know, these are places that

26:07

have have have struggled

26:10

and and and part of the struggle have been

26:12

there a few things that you find in common in

26:14

these kinds of markets that there

26:16

is a some sort of precipitous event

26:19

that kind of pushes them over. And

26:21

and but if you look at the history,

26:24

uh of these places prior to that

26:26

that have been occurring, they were already

26:28

down a path where there was challenging porter. New

26:31

Orleans back in nineteen fifty

26:33

was probably I don't now close

26:36

to a million people. Um. Detroit,

26:40

excuse me, Detroit in the early fifties

26:43

and ninety four had about two million people.

26:46

Puerto Rico and two thousand and ten had three

26:48

point eight million, and now they have and then we have three

26:50

point two. Uh. So what you see

26:52

is that there's this path of population

26:55

decline. UM. There's also

26:57

kind of this idea of over dependent

27:00

on one industry or one or two industries.

27:02

In Detroit, it was, of course the automotive

27:04

industry. In the case of New Orleans,

27:06

it was a combination of tourism and

27:08

and uh and the and the and

27:11

the oil sector. Uh and so what

27:14

what so over dependence on

27:16

one industry UM, population

27:19

decline and kind of an unwillingness

27:21

to accept changes that are happening in the global

27:23

economy and really kind of moved to those changes.

27:26

In Detroit, it was kind of, we make

27:28

big cars. It doesn't matter that there is going

27:31

to be more uh

27:33

fuel efficient cars coming out of Asia or

27:35

more luxury cars coming out of Europe. We make big

27:37

cars. And that's what we're gonna do. So we're gonna turn

27:39

our head to the kind of the changing global

27:42

tide um. In the case

27:44

of Puerto Rico, you've

27:47

got a place that has a lot of great

27:49

stuff going for it, but has had

27:51

had a policy I would

27:53

say, as it relates to developing

27:55

the economy that was solely reliant on incentives

27:58

and where we've tried to ship. The conversation is

28:00

that incentives are great, but you actually have

28:02

to have a value proposition that means

28:04

that the market is going to make more sense. So

28:06

those types of things are kind of the things

28:08

that you see as trends in common of

28:11

these different markets. Uh what

28:13

what Why I am bullish on these markets

28:15

is because I also believe that there is an

28:17

inherent bias and racism in our

28:20

society where we look at communities

28:22

of black and brown people and we tend to see

28:24

those as deficits versus being

28:27

places that are assets. And the number one

28:29

driver of investment decision by companies

28:31

is having access to smart people. And

28:34

so we take investment thesis that if you invest

28:36

in people and actually elevate

28:38

people and and see them as assets versus

28:41

as versus liabilities, you can

28:43

actually create something that's different. So I would

28:45

say in New Orleans that the same funkiness,

28:47

the sexiness, and the cool that you see in the food,

28:50

uh translates into innovation

28:52

in companies when people are giving the right

28:55

skills to actually be able to apply that that

28:57

that that flavor that makes New Orleans New Orleans.

29:00

In Detroit, we would say, you know, the same ability

29:02

to be able to make a really cool

29:04

Cadillac translates into

29:06

the ability to be able to make a really cool Shino or

29:08

watch UH. In the case of

29:11

Puerto Rico, that innovation that

29:13

we've seen in that moxie that's allowed this

29:15

community to thrive despite natural disasters,

29:18

governmental challenges, and other things, is

29:20

the same thing that will allow us to reposition

29:23

our economy for the next generation

29:25

of pharmaceuticals

29:28

and the next generations of crypto and other other

29:30

innovations. That's the that's the opportunity

29:33

that we have. Yeah,

29:35

I guess these types of places you I go

29:38

back to the beginning of the conversation.

29:40

I think they are very competitive, and I think

29:42

what you're saying is true. It also has a lot to do with

29:44

the people who are making these investment decisions.

29:47

Literally don't go to these places. So

29:49

it's also it's also a cultural thing beyond

29:51

you know, institutional bias. The

29:54

favorite thing to do, our favorite thing to do

29:56

at invest Puerto Rico is the good

29:58

group of five to seven and asters who

30:00

know very little about the island and take them for

30:02

two or three days around the island to allow

30:04

them to eat. Business leaderships see what's happening in

30:07

their sectors, and without a doubt eight

30:09

out of nine times once once we do that, companies

30:12

are like, ah, we think we probably need to come here

30:14

and actually do something. Yeah, well it's

30:17

nothing like the reality. Yeah,

30:20

I guess over time, people,

30:22

so Detroit was once the wealthiest city in the world,

30:25

as you well know, and you know, over time

30:27

it developed this reputation for just falling

30:30

behind. And it seems like in today's world falling

30:32

behind but gets more falling behind,

30:35

but gets more falling behind. And

30:37

as you were saying, these events kind of nudge

30:39

these whole regions into just oblivion,

30:42

economic oblivion, and sometimes it

30:45

takes concerted efforts to kind of,

30:47

you know, put the train back on track. But

30:49

I think in an era of such high costs

30:52

in places like where I'm sitting in Los Angeles

30:54

and New York, you know, and other

30:56

places. It only seems natural

30:58

for companies to want to ensure

31:01

the low cost markets like New Orleans,

31:03

Detroit and Puerto Rico. That's that's

31:05

absolutely right, and you know, we we

31:08

the idea of that

31:10

these markets have significant

31:12

investments coming into them to kind of

31:14

rebuild and restructure also

31:17

creates an opportunity for innovative

31:19

companies that say, oh, I can actually be

31:21

a part of the decision making framework

31:24

and pushing this economy towards something

31:26

where it can leap for all others in terms of technology

31:29

access and and those types

31:31

of opportunities. So we we you know that that

31:33

this idea of

31:35

of Puerto Rico, New Orleans, Detroit

31:37

having these challenges is very real. But I also think

31:39

because of those challenges, the opportunity

31:42

is greater to actually build something distinct,

31:45

different and new. Um One of the things

31:47

that the pandemic really underscored was that

31:49

if your market hasn't had a shock yet, at will

31:52

UH and and a lot of the A

31:54

lot of times in meeting with companies,

31:56

it's about the markets that know how

31:58

to respond to show places like

32:01

Puerto Rico, UH that are able

32:03

to kind of uh navigate their

32:05

way through kind of the economic turmoil

32:08

that we all know it's pending. A

32:10

lot of times I'll tell companies, I say, you know, there's

32:13

this idea about what Puerto Rico is, but

32:15

you know you've got fires in California, You've got

32:17

hurricanes in Florida. UM, there

32:20

are challenges everywhere. Wouldn't you want

32:22

to be somewhere that knows how to actually deal with

32:24

those things and keep on going. We've got some of the highest

32:26

levels of worker loyalty in the entire

32:29

country. You're talking to three. You

32:31

know, I was here when the earthquakes happened

32:33

the other year, and literally two days

32:35

later, everybody was back out working, kind

32:37

of like we took a licking, but we're gonna

32:39

keep on kicking. And I think that's a big part

32:41

of the big beauty of Puertolico.

32:45

Yeah, I guess I want

32:47

to end with this. I'm surprised.

32:49

You know someone I've interviewed a lot, and I'm sure you know who

32:52

she is, A Stacey Plaska. She is, you know,

32:54

the non voting member of Congress from the US

32:56

Virgin Islands right there next door. Also

32:59

a very beautiful play. I'm surprised

33:01

that all the US territories haven't

33:03

come together to kind of present

33:06

their value proposition because we don't really

33:08

think about them, right. I mean, I'm someone

33:10

who grew up in Florida, so i grew up going to the Virgin

33:13

Islands in Puerto Rico all the time. But

33:15

they're not really on our political radar. We

33:17

seem to be distracted with other

33:19

sorts of you know, political division. We

33:22

don't really think about, you know, Guam,

33:24

the Northern Mariana Islands,

33:26

you know, uh, the US Virgin Islands,

33:30

Puerto Rico, and they all seem to have similar

33:32

problems, which is of course that

33:35

you know, they're they're blessed to be part of

33:38

the United States, but that gives them some strategic

33:41

economic disadvantages compared

33:43

to countries with much weaker

33:46

currencies. Right Like, if you're

33:48

in Mexico or Honduras, you

33:50

have a much weaker currency than the dollar, and

33:52

that makes you much more cost competitive. But

33:55

on the other hand, we live in an era where

33:58

offshoring is under five because,

34:00

as we saw, supply chains are a mess and

34:03

we can't really depend on pixie dusts

34:05

and cargo ships to power our

34:07

economy. So I guess my question

34:10

is, how are we not hearing about

34:12

this more in the mainstream news right now? Are we not connecting

34:14

the dots that you know, the reason why our

34:17

shelves are empty is because our territories

34:19

are underdeveloped. You know, you

34:21

you made some very great points

34:23

there. I would say, you know, it's a very

34:25

it's very hard to cut through, uh,

34:28

cut through the noise and actually be able to

34:30

to get the kind of audience

34:33

I would say in mainstream media around

34:35

many of the things that we're doing here in Puerto Rico.

34:37

It's just you know, it's it's just tough.

34:40

Um. Part of part of what we've done. Of course,

34:42

we've got a major PR

34:44

firm representing us out of New York, and we've

34:46

got a and we've got uh, we've

34:49

got about seven million dollars in one time

34:51

funding to actually promote the island

34:53

that we've got to spend in the next six months. But

34:56

we're trying to ring the ball as loudly as we

34:58

can. A big reason why

35:00

you know, many don't hear about us in the mainstream

35:03

is because our organizations

35:05

have relatively small budgets, so

35:07

we have to be quite surgical with

35:09

our investments and media. So for example,

35:12

we've got a we did a campaign in ten

35:14

cities last year's social media campaign

35:16

in ten city cities, but it was really

35:18

around pharmaceuticals and the in the

35:20

value proposition for Puerto Rico as

35:22

relates to pharmaceuticals. Will be launching a greater

35:25

value proposition campaign shortly where

35:27

we'll you'll see us in some of the major airports

35:29

around the United States talking

35:31

about why Puerto Rico UM And

35:34

so we're very surgical in terms

35:36

of going after specific demographic

35:38

of companies UH and specific

35:40

markets that are high costs, high tax

35:43

markets so that we can tell our story

35:45

there to to those that can actually

35:47

help make these investments.

35:49

But I encourage everyone to, you know,

35:51

visit our site investpr dot org as

35:54

well as as well as share the word.

35:56

If you've not len to Puerto Rico yet, now is

35:58

a great time to come. Well,

36:01

you know, hopefully one day I have a revenue

36:04

problem so bad and you know my

36:06

businesses are so booming that

36:08

I can call you up, Roderick can say, you know what

36:11

I'm thinking about moving to Puerto Rico

36:13

because you know, between the incentives,

36:15

the culture, the language that's near and

36:17

dear to my heart as my film

36:19

is from a neighboring island of Cuba. Which

36:22

is another podcast for another

36:25

day. That seems like that need would need ten

36:27

podcasts. But I really

36:29

appreciate your time, Roderick, and I'm really glad we connected.

36:32

David, please hand me back. I enjoyed this.

36:34

This was a hoot,

36:38

which I could ask you. So

36:43

that was a really fun conversation. I always

36:46

think of Puerto Rico because it's a place

36:48

that's really close to me. You know, my brother's partner,

36:51

she's from Puerto Rico, and it's a place that I've

36:53

really liked going to growing up, especially

36:55

since we didn't have the habit of going to Cuba,

36:57

so instead we went to Puerto Rico, where I had a lot

37:00

of family. You know, I speak the language,

37:02

and I'm very close to the issue. And I want to thank

37:04

Roderick for really walking us through the

37:06

value proposition that Puerto Rico has. But

37:08

I want to remind our audience that Puerto Rico

37:11

is a painful reminder of how

37:13

a lot of times, Congress is

37:15

the problem. The laws on the books

37:17

are the problem. The work Roderick is

37:20

doing is very important. The tax incentives

37:22

will help Puerto Rico enormously,

37:25

but Puerto Rico needs a fair shake

37:28

in Washington. They need to repeal laws

37:30

that are increasing the cost of living in

37:33

a territory that has lower incomes in our

37:35

poor estate, which if you don't know, that's Mississippi,

37:37

and they're significantly lower in Puerto Rico. We

37:40

don't really need to add to the cost of living.

37:43

And then we wonder why the territory is so

37:45

far into debt and why so many Puerto

37:47

Ricans migrate to the mainland. They're voting with

37:49

their feet because it's just simply too expensive

37:52

and the economics don't work. But this

37:54

is a man made creation. It can

37:56

be changed. Something called the Jones

37:58

Act can be repealed, and every now and

38:00

then it comes up in the news, but we don't hear about

38:02

it enough. And really I understand

38:05

the value of the Jones Act. It really protects

38:07

American shipping interests and American

38:10

shipmakers, and I'm fine with that,

38:12

but there should be a waiver for Puerto Rico. Puerto

38:15

Rico has been through a lot, a Category

38:17

five hurricane, earthquakes,

38:20

the expiration of tax incentives

38:22

that you've probably never heard of, and a NonStop

38:25

recession and emigration of

38:27

millions. So I really

38:29

really want to promote

38:31

the idea that the situation in Puerto

38:33

Rico is solvable, like anywhere

38:36

else. A lot of times we have to look

38:38

at all of the tools available to

38:40

us, and in a lot of those cases,

38:42

the problems are political, not

38:45

just economic. So thank you to

38:47

all of you for joining me for this episode. I

38:49

love Puerto Rico and I love talking about it,

38:51

and that's the whole point of Follow the Profit is

38:53

for you to learn more about what's

38:56

causing our economic and social

38:58

problems and of course our political problem

39:00

in today's world. I'd like to thank Roderick

39:02

again from invest Puerto Rico. You can check out his

39:04

work just google him. I'd

39:06

like to thank our hard working team of producers,

39:08

Rob Scott Cheyenne, as well as

39:10

our executive producers New Gingrich

39:13

and Debbie Meyers. I'm your host, David Grasso.

39:15

If you like the show, give me five stars and leave

39:17

a review. We read those reviews and we would

39:19

love to hear your feedback. Follow the Prophet

39:21

as a production of GINGRAS three sixty and I Heart

39:23

Radio. For more podcasts from my Heart Radio,

39:26

visit the I Heart Radio, app, Apple Podcast

39:28

or wherever you get your podcast. Part

39:34

of the Gingwich three six network