IT Outsourcers, Get Ready for the Castro Dividend

Beyond the allure of Cuba's shabby-chic hotels and the prospect of improving the island’s decrepit roads, there is huge prize for investors with vision: Cuba possesses immense STEM talent.

Western firms are nibbling at Cuba, long considered the forbidden fruit of the Americas. Currently, most are eyeing the tourism industry, while others are cozying up to Havana in hopes of signing a deal to improve the country’s ailing infrastructure. Recently, for instance, the German engineering firm Siemens signed a deal to upgrade Cuba’s utilities infrastructure.

Then there are a few brave companies that are getting in now even though any revenue will be a long-time coming. Given that less than 5% of Cubans have Internet at home, Netflix’s 2015 announcement that it will offer its video streaming service there appears to be an attempt to build brand recognition for the day when Cuba finally enters the twenty-first century.

The Castro government is managing the transition, of course. So, despite the urgent need to attract foreign investment, further economic reforms in Cuba will be short-lived if it shows signs of stoking calls for democracy. Cuba is moving back into the Western fold, but progress will continue to be fitful.

Yet, beyond the allure of Cuba’s shabby-chic hotels and the prospect of improving the island’s decrepit roads, there is an even greater prize for investors with vision: Cuba possesses immense STEM talent. Today, physicians, thousands of whom are sent abroad to friendly countries in exchange for foreign aid to Havana, are probably the most prominent part of this group, but this is only one segment. There are tens of thousands of IT professionals on the island.

History of STEM Incubation

Since 1959, the Castros have focused on improving access to education and healthcare, requiring that Cuba’s universities train thousands of physicians, nurses, and, over the past decade, computer scientists. Meanwhile, because of the Castro government’s provocative foreign policy, the island has endured isolation from the West. The ongoing demands of infrastructure, healthcare, and feeding those in the Caribbean’s largest island have spelled a healthy dose of self-reliance for communist Cuba. This initially warranted the STEM- heavy approach to education.

From the perspective of a young and ambitious Cuban, STEM fields allow easier access to technology and, crucially, fewer topics are taboo. Existentially ponderous fields like philosophy may beg calls for democracy, but for Cuba’s inquiring minds questioning the limits and applications of artificial intelligence is surer footing. This fuels the popularity of computer science among Cuba’s best and brightest. “In Cuba, there is a cultural/intellectual movement when it comes to software development,” says Yusnier Viera, a 2005 computer science graduate of the University of Havana.

As a result, quite unlike America where liberal arts make up the bulk of college majors, in Cuba Information Technology is the most popular field of university study after healthcare. Across Cuban universities more first-year students declare IT as their major as those who pick Physical Education, Agricultural Sciences and Education, combined. Still, the communist economy has done a poor job of leveraging that talent in the digital age.

Barriers for IT Graduates

In the early 2000s, based on the “Battle of Ideas,” a reform agenda encouraged by the father of the Revolutionary child-hero Elián González, Cuba established a specific IT university, Universidad de Ciencias Informáticas (UCI). UCI has now graduated nine classes of computer scientists, but while some undoubtedly have become professors, or monitors for the government, many graduates end up working at the Office of National Statistics or a similar assignment that only draws on a sliver of their skills. And even among the lucky few who get their dream job in, say, academia, the realities of the Internet in Cuba bite hard. Computer science professors typically do not respond to emails at night or on the weekends, not out of some curious code of ethics but because even they do not have Internet at home.

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Because there are not many IT jobs in the country, Viera says that many programmers are forced to leave the island if they are serious about pursuing a tech career. Many end up in Florida. Viera left for Miami a few years ago. Since then he has become known as “the human calendar”—winning multiple Guinness World Records for his rapid-fire mental math computations—while teaching math at Miami-Dade College and setting up his own math consulting firm.

Smaller communities of Cuban IT professionals have taken hold in Spain, as well as the capital cities of Ecuador and Chile. Others though are staying put, forming proto-corporations called grupos. Already 51% of Cuban IT professionals have experience working for foreign corporations, according to a survey conducted last year by Nearshore Americas.

Hope for Cuba’s IT Potential

For now, Cuban software developers who have left the island are establishing operations that serve as a bridge between Western software firms that outsource programming work and teams of programmers on the island. One such outfit, CubaOutsource.com, was set up by Alejandro after he moved from Cuba to South America last year. “There is an increasing number of self-organized, private teams in Cuba,” says Alejandro. He is impressed with how rapidly some of these teams of programmers are responding to the global business environment. “Some are pretty sophisticated,” Gil explains: “They send invoices, have an enterprise-like structure, with accountants and the like, and they are starting to take on bigger projects, not just small clients.”

The rapidly advancing business acumen of Cuban programmers is not only evidenced by groups in Havana, but it is already spreading out to other hubs of Cuban tech talent like Santa Clara, Santiago de Cuba, and Holguin. It has become something of an open secret in the South Florida software community that part of the coding work done in the area is actually being outsourced to these groups in Cuba.

The Castro government has held back the Cuban economy for more than fifty years, even as it succeeded in creating a strong STEM educational system. Now, the mismatch between high skills and poor job prospects is coming to an end. Expect Cuba’s software programmers and tech entrepreneurs to be at the forefront as the island inches into the global economy.

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