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Public-Private Partnerships Can Lead to More Local Ownership

Puerto Rico is a case in point

As a rule, partnerships seek to bring different actors together to achieve shared goals. Public-private partnerships are no different: the idea is that when the government, nonprofits, and the private sector target their resources in complementary ways, everyone benefits. But the most successful public-private partnerships go beyond these basics. They capitalize on what makes a place unique. And that’s what brings us to Puerto Rico.

Though Puerto Rico has a relatively long history of public-private partnerships, few have hit this sweet spot. As described in an earlier article in this series, the federal tax breaks for manufacturing plants from the 1950s through the mid-1990s created jobs, but not ones unique to the island or the skills of its workforce. So once the tax breaks disappeared, so did the jobs. The incentive program was essentially a partnership between two groups — the federal government and companies from the US mainland and elsewhere — that had little to no direct relationship with Puerto Rico itself.

“Economic development can go one of two ways,” explained David Baxter, the public-private partnerships advisor to the International Sustainable Resource Center. “You can make everyone poorer by attracting companies based on incentives and cheap wages. Or, you can take another route with a much bigger reward, and that is developing high-value, locally-owned engines of economic growth.”

People on sidewalk in Puerto Rico

That brings us to the climate, an essential — and indeed inescapable — part of any island economy. Puerto Rico is no exception. The Puerto Rico Public-Private Partnerships Authority (known as P3) has launched infrastructure projects to attract private capital support for sustainable public works projects, particularly in energy and transportation. These projects seek to mitigate the impacts of climate change on Puerto Rico, which are most visible in the catastrophic damage wrought by multiple hurricanes, most recently Hurricane Fiona in September 2022.

All of this underscores the importance of the blue economy: it’s a uniquely Puerto Rico resource, and the island’s very survival depends on it. Now, with support from the US Economic Development Agency, led by Juan Bauzá, the nonprofit Bluetide Puerto Rico is taking the lead on sustainable, blue, public-private partnerships that reflect what makes the island unique.

“Juan is willing to say ‘we have to do [economic development] from a completely different perspective,’ and that’s really rare,” said Alice Loy, co-founder and CEO of Creative Startups, a renowned global accelerator program that operates entrepreneurship education programs around the world.

Economic development can go one of two ways. You can make everyone poorer by attracting companies based on incentives and cheap wages. Or, you can take another route with a much bigger reward, and that is developing high-value, locally-owned engines of economic growth.

In April, Bluetide partnered with the San Juan-based Titín Foundation and tech company Wovenware to bring Creative Startups to the island for programming tailored to the needs and nuances of the local entrepreneurship ecosystem. In Puerto Rico’s case, that meant laying the groundwork for locally-led businesses. In addition to two 3-week accelerators for Puerto Rican entrepreneurs, Creative Startups also ran a program to ‘teach the teachers,’ training 8 community leaders on entrepreneurship fundamentals so that they could work from the ground up to drive new businesses. In an interview with local business news outlet NimB, Bauzá described the initiative as a way to “shock the system” and “creat[e] long-term continuity by creating mentors to increase the capacity for social impact.”

Pink decorations on Puerto Rico Street

“There’s a very long shadow cast by the economic interests of the US mainland fueling a drive in Puerto Rico to want to own businesses across the value chain,” explained Loy. “There’s a lot of work to be done around building up entrepreneurs with a growth mentality that’s not exploitative.”

Creative Startups focuses on the creative economy — but they found a lot of overlap with the blue one in Puerto Rico. “You want to build an entrepreneurial ecosystem from place, so that places stay unique,” said Loy. “That lets entrepreneurs create authentic experiences.” Participating startups included ones upcycling plastic salvaged from the local beaches, technology measuring ocean pollution, cultural and creative tourism opportunities, and innovative commercial fishing ventures.

Building a blue economy means taking a less traditional approach to economic development, where typically public investments are repaid by private ones. Instead, the model is designed to attract funding from all sides. “In this situation, the initial investment is made in partnership between the federal government and Puerto Rican government, but eventually the private sector is going to be investing,” explained Baxter. “This works because the public sector is willing to let everyone use their ‘asset’: the natural infrastructure.”

After working with Creative Startups, the entrepreneurs joined in a pitch competition held in conjunction with the Bluetide Caribbean Investment Summit in August and in partnership with ConPRmetidos, a grassroots initiative to leverage the Puerto Rican community, including expats, as a tool for growing the island’s entrepreneurial ecosystem. ConPRmetidos launched its Collaborative Impact Grants (CIG) program to provide capital and technical assistance to help social impact initiatives on the island succeed.

You want to build an entrepreneurial ecosystem from place, so that places stay unique.

Collectively, these partnerships are making sure that the roots of Puerto Rico’s economy are firmly planted in the island’s soil. After decades of decision-making that often left out their voice, the shift to the blue economy is an opportunity for Puerto Ricans to own what makes their connection to the sea so special.

“Using the ocean as economic driver while increasing resilience and sustainability is a somewhat unique model,” said Baxter. “Our goal now is to make sure Puerto Rico has everything they need to take this work forward.”

This article is Part Seven of a series produced by Impact Entrepreneur about current and planned “blue economy” and resilience initiatives in Puerto Rico, the U.S. Virgin Islands, and broader Caribbean. This series is an outreach effort to communicate the Blue Economy Course of Action ECN 10 found in the Economic and Disaster Recovery Plan for Puerto Rico and bluetidepr.org. Other articles in the series are listed below as they appear.

I. A New Framework for Economic Revitalization in Puerto Rico

II. Measuring Impact in Puerto Rico’s Emerging Blue Economy

III. Resilience: Two experts discuss its importance to the impact economy

IV. Restoring Coral Reefs Is One Key to Puerto Rico’s Economic Future

V. Technology and Sustainability: A Way Forward for Puerto Rico?

VI. El Bienestar Común, or How Puerto Rico is Taking Care of Itself

VIII. Puerto Rico’s Place on ‘Hurricane Highway’ Key to Economic Growth

IX. Blue Your Mind: Innovations Feeding the Fishing Industry and Catalyzing the Blue Economy

Meg Massey is a writer and strategist committed to democratizing impact investment. She is the co-author of the 2021 book Letting Go: How Philanthropists and Impact Investors Can Do More Good By Giving Up Control. Her writing has also appeared in Impact Alpha, Nonprofit Quarterly, and Chronicle of Philanthropy.

This article was produced in collaboration with the Magazine's Content Partners.

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