2575. Cuba: A Leader in Informatics in the Americas

By Nora Gámez Torres, Miami Herald, February 27, 2017

In Havana’s iconic Bacardí building, teams of computer programmers are working for U.S. companies with the tacit permission of the Cuban government.

Could the island become the next international hotspot for software development?

That’s not far-fetched, says John McIntire, chairman of the Cuba Emprende Foundation, which has been working with the Catholic Church to train entrepreneurs and private business owners on the island.

“It’s already happening. I know of half a dozen companies, all based in Miami, that already have software development teams in Cuba and there are probably more that I don’t know about,” McIntire told el Nuevo Herald.

“I also know some big outsourcing companies, based in the United States, that are looking to establish operations” in Cuba, he added. “Until now, they have only been visiting Cuba, establishing relations and starting … relations with programers.”

Most of the U.S. companies hiring computer engineers and programmers in Cuba put them to work programming or designing applications for cell phones and Internet sites, as well as more complex coding with open source software, added McIntire, pointing out that Cuba has many highly educated programmers who are currently “underemployed.”

With salaries of approximately $5 per hour — a more “competitive” rate than at other programming centers in the region — and in the same time zone as the United States, contracting Cuban programmers “looks very promising,” McIntire told a recent conference organized by the Americas Society/Council of the Americas and the Andean Development Corporation.

A 2015 report, produced by the market research firm Nearshore Americas to assess Cuba’s prospects as a destination for investment in the information technology sector, concludes that “Cuba offers the lowest wages with the highest concentration of professional grade software developers anywhere in the Americas … Cuba’s large and multiskilled pool of software programmers and Internet researchers represents perhaps the largest pool of untapped IT talent in the Americas.”

The report, obtained by el Nuevo Herald, was based on interviews with dozens of Cuban entrepreneurs and government officials in several ministries, official documents and a survey of 317 Cuban IT professionals conducted during May 2015.

The study notes that “there is a strong appetite among outsourcing professionals to engage with Cuba” and predicts the expansion of exported professional services, especially if the Cuban government continues with the modernization of its IT infrastructure.

Kirk Laughlin, founder and managing director of Nearshore Americas said that “there is a lot of justifiable reasons for this excitement because of the quality of the Cuban workforce,” adding that many multinational companies would “very much like to tap into that workforce.”

Half of the respondents to the Nearshore Americas’s survey said they were freelancing for foreign companies at the time of the study.

For now, Laughlin said, “there are some projects going quite well,” including “a couple of projects in the Bacardí building but they are small-scale.”

Formal office spaces like the Bacardí building are expensive (with rents as high as $400 for a space that measures about 65x65 feet), and so many teams of programmers work from their homes, in rented apartments or even from their office in government agencies and companies.

The people working in the Bacardí building probably also work for Cuban state enterprises, McIntire told el Nuevo Herald. “The government is fully aware that those are programmers working for foreign companies. They are in the stage of allowing it, but not promoting it,” he said.

The private production of software for export is a unique enterprise in Cuba, where the government holds a monopoly on all imports and exports and the vast majority of private businesses are limited to the tourism industry.

The former Obama administration, as part of its campaign to ease sanctions on Cuba, allowed U.S. companies to hire Cuban programmers in late 2015. But the Cuban government has not said whether programmers can legally work for foreign companies, leaving the issue unclear.

“You can get a personal license as an applications developer and pay taxes … but you cannot operate as a business,” said Víctor Manuel Moratón Hernández, a computer engineer who with Fabián Ruiz Estévez co-founded NinjaCuba, a web page for people offering or seeking employment in technology.

“I developed software with U.S. and French companies. They usually go to Cuba looking for programmers for mobile apps or web pages, but if you’re not part of the network of contacts, you don’t have access” to those jobs, Hernández said in an interview from Twitter headquarters in San Francisco.

Hernández is among the most recent winners of the 10x10KCuba contest, who participated in seminars at Stanford University and Miami Dade College and visited the headquarters of Google, Facebook, Twitter and Airbnb. The contest was sponsored by the Cuba Emprende Foundation, as well as #CubaNow and other organizations, to promote exchanges between island programmers and leading-edge U.S. companies.

Estévez said the exchanges have been “very important for relationships and knowledge, to give some direction to what we are doing, and to learn how to value what we’re doing in Cuba.”

Janse Lazo, a computer engineer and executive director of MiKma, a mobile app to advertise houses for rent on the island in national currency, said he hopes those types of exchanges continue.

“We want to start to transmit the know-how acquired here to the start ups in Cuba,” he said. “Sometimes there are good ideas, but you don’t know the business side. We want to boost the culture of entrepreneurship on the island.”

Despite the enthusiasm of Lazo and the other pioneers, one of the principal obstacles to Cuba’s rise in the world of offshore programming is the island’s limited access to the Internet.

ETECSA, the government’s telecommunications monopoly, is slowly modernizing the country’s infrastructure. As of January, it had reported 328 WiFi access points in parks, plazas and other public places. The agency also has started an experiment with home access to the Internet — now unavailable to all but a few Cubans.

“It’s complicated, with the lack of access to the Internet because you have to search for information and then integrate all that coding into a remote depository,” Hernández said.

He said he often uses the limited access offered by ETECSA through its Nauta accounts on cell phones and WiFi hotspots. “It’s expensive, it’s awkward because you’re connecting to the Internet in a park, but for the time being, that’s all there is,” he said.

“The only major problem — if we assume the Cuban government will continue to allow it — is the infrastructure, the connectivity,” McIntire said. “The government should allow either foreign investments or offices” for teams doing that type of work.

Laughlin added that the embargo and legal uncertainties also hold back multinational companies for immediate investment. Cuba, he said, “is still more complex than many of its neighbor countries that offer incentives for investors” and where widespread connectivity is available.

“The talent is there,” said Ric Herrero, director of Cuba Now, one of the organizers of the 10x10KCuba contest. Several accelerator programs that participated in the contest “highlighted the quality of the entrepreneurs that we selected.”

“The principal obstacle now is the current administration and mood in the United States, which offer fewer incentives for taking risks,” Herrero said.