26 January 2012

TEDx San Juan: Marcos Polanco

[Apropos of this interview, Global Voices Online did a review of five Caribbean-area TEDx events, which quote Me. What can I say, except "Thanks"?]

Marcos Polanco was the Speaker Coordinator of the TEDx San Juan event in November, 2011. Our paths have crossed several times in the past decade, not always in positive or even neutral terms. But that day in November, I gave him his due, for the TEDx San Juan speakers were phenomenal. (I will interview the rest of the TEDx Event Coordination superstars in the coming weeks; I know Marcos better than I know the others, so I started with him.)

Marcos is a serial entrepreneur, with Silicon Valley experience, who came back to Puerto Rico after, in his own words, "crashing and burning" in California. Working in start-ups, he made approaches to government agencies and was invited to become a consultant. One of the first lessons he grokked there was that government work was no meritocracy: talent and brains mattered little, if at all. As Marcos pointed out, he'd just come from Silicon Valley, where brilliant ideas rule; in Our government, brilliant ideas were ignored. As Marcos noticed, an idea would make some small measure of progress if the person submitting it had power or leverage to make the listener do something.

After being a consultant, Marcos was asked to help coordinate with McKinsey Consulting on a major report about Our economic present (in 2003) and future. Marcos realized that since China had outsourced manufacturing and India had outsourced services, Puerto Rico had to find a different business model to offer the world. He found one: federal contracts, primarily based on engineering. Puerto Rico's largely-unknown deep pool of top-notch engineers was a resource that We could leverage for federal projects with little or no global competition.

His insight came in September, 2003, barely less than a month after InfoTech had secured a contract with Pratt & Whitney to take on federal defense contracts and set up shop in Mayagüez, a success story that led to several other "reverse brain drain" projects bringing Our engineers back to Our shores. Marcos played pivotal roles in that development, as he entered the Puerto Rico Industrial Company, PRIDCO, to help develop the Information Technology Business Unit.

PRIDCO--My eternal nominee for "Gilded Busted Sump Pump of the Century"--turned out to be a revelation for Marcos.  In his words, it took him "several months" to figure out its complexity and "about a year" to see how "utterly brilliant" PRIDCO was. As an economic attractor, sales arm and industrial developer for Puerto Rico, PRIDCO was "utterly brilliant...for 1955."

(Made Me spit out coffee, he did. Cracked me up.)

PRIDCO was the main agency of the economic miracle that defined Puerto Rico's success from 1947 to 1972.  But Marcos found its indifference to change "heartbreaking," for not only is the model broken, but there's no will to change it at a wide enough level. Therefore politics rule what should be a practical reality. As Marcos said, when an entrepreneur brings a project to PRIDCO, they ask 3 questions: how much are you investing, how many jobs are you creating and how many square feet of space do you need. These 1955 questions were pertinent then, but the current economy, where 2/3 of all new jobs are coming from new companies (mainly Internet-based), these 3 questions are far removed from reality. In addition, for PRIDCO, a job is a job, so 300 minimum-wage jobs with drone workers means more to the agency than 50 high-wage knowledge worker jobs. When salary is not important it means Our public economic policy is short-sighted and self-limiting, tossing away true growth in pursuit of "political numbers."

To describe where We are as an economic entity on the global stage, Marcos used the analogy of being once a major stop on Route 66 and when the interstate was built, you are literally "off the beaten path." To Marcos, Puerto Rico has long been off the beaten path, and yet he firmly believes that We can move Ourselves to get back where We belong, because the "shift" isn't physical, but conceptual.

But to do so, We can't rely on PRIDCO or other government agencies. As Marcos pointed out, some agencies have to look outside to deal properly with their functions (like the Government Development Bank and bond traders in New York, PRIDCO with multinationals or Tourism with the travel industry.) But if PRIDCO is so wrong in outlook, despite almost constant "outside feedback," what can be expected of the other "inward-looking agencies" of Our government? In other words, Marcos thinks Our political architecture--as well as Our economic architecture--need to be fundamentally changed for progress to occur.


Politics rules to an overbearing extent. Marcos notes that with about half Our population is in poverty and nearly 27% of Our workers employed by the government, political leaders spend their 4 years in office trying to get more money from the "Sugar Daddy" up north to benefit the poor and government workers, the biggest voter mass We have. Entrepreneurs and knowledge workers, the key elements of 21st century economic innovation, are a diminishing middle class that means diddly-squat (My term) in terms of votes. Not enough votes means no attention which equals indifference and inertia. A sad formula for getting stuck in neutral.

Along those lines, Marcos is appalled that Our continuing and increasing brain drain is not a national emergency. Almost 100% of Our best-rated engineers leave the Island (other professions are close to that, with nurses leaving at a 55-70% clip, doctors at about 40-50% and lawyers at about a 35-40% rate...so there is a silver lining to this brain drain, I guess.) and the loss of human resources in Our "unreal economy" is a powerful blow. It is an unreal economy since Puerto Rico makes what it doesn't consume and consumes what it doesn't make, so its economy is not "directly affected" by most of Our actions. We have little or no control over speeding up cash cycles, which drives economic growth, so Our only true tool is human talent and drive.

And yet, even today, PRIDCO accounts for about 11% of all jobs in Puerto Rico, so it still has a degree of relevance, aside from it being the precursor agency to other government departments (the Ports Authority, for example). As such, it holds sway over economic development and innovation, currently being ridden by the biotech industry sectors (mainly related to the big pharmaceutical companies here), for although innovation is more than biotech, no one in government seemed to have a clue and the biotech sectors gladly accepted the gift of being able to guide economic policy their way.

Marcos is not a pessimist, though. He believes Puerto Rico can become a global player because the technology for globalization is now in the hands of the individual. Marcos himself works with colleagues in Africa, Europe, Asia and the U.S. of part of A. in his latest start-up. Location doesn't matter, but knowledge, energy and will do.

On the other hand, Marcos thinks that trying to turn Our Island into a Silicon Reef (backhand jab of Mine at the Center for the New Economy and their decade of uselessness) won't work because We aren't early tech adopters (willing to take a risk on the cutting edge), Our venture capital is barely-there and wrongly-focused on spending only for "the big score" (ignoring the more secure and proven course of portfolio growth rather than "lucky hit") and We still see Puerto Rico as "the market." In Marcos' example, if your only focus is on 4 million people, it's like you're trying to sell your company's offer to downtown Los Angeles only.

To counteract that, Marcos believes We need to focus on the monetization capacity of the Web. He pointed out that Groupon set a record by becoming a billion-dollar company in just 2 years; the previous record was four years. It's only a matter of time--pun intended--before a company reaches the billion-dollar mark in one year.

And maybe, just maybe, We could play a major part in it.

As Marcos emphasized, We don't have to wait for permission, We don't have to wait for anyone, no one can stop Us...if We believe We can do it, We focus on the global markets and We decide to do it.

Funny how it comes back to choice...

The Jenius Has Spoken.

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