Industry Clusters – PR Aerospace Technology Consortium

Industry cluster’s popularity can be partly attributed to the effort of Michael Porter. Porter’s clusters definition, namely

the geographical concentration of firms and institutions in a domain, including suppliers and OEMs, as well as governmental agencies, universities, research centers, technical colleges, and trade associations.

The analysis of recent developments in the aerospace cluster reveals that the primary centripetal force has been the regional pool of skilled and semiskilled labor. This trend was evident by global outsourcing from OEMs [original equipment manufacturers] and other large US manufacturers that gave rise to new poles of growth in China, India, Mexico and elsewhere, but recently, US national security issues and trade war with China has flipped the cluster model on its head.

PRATC is an industry-led partnership that defined itself as a “strategic think tank” that brings together “all the major decision-makers in Puerto Rico’s aerospace sector, including companies, academia, research institutions, associations, and government.

Reduced transportation costs used to be one of the more obvious benefits of a cluster, but with the global emergence of low-wage economies, this is no longer valid. Puerto Rico has a unique niche for Defense-related work vis-à-vis other US states: it is the lowest wage jurisdiction with ITAR permission.

Prior to 2007, Puerto Rico lacked the traditional makings of an aerospace cluster. Notwithstanding that, the industry grew in manufacturing, engineering, software development, and supply chain services from 500 jobs in 2007 to nearly 6,000 by the end of 2019. With a skilled workforce – as we continue to graduate bilingual engineers in Puerto Rico – growth in the market appears to be on a sky-high trajectory, so keeping and attracting the brightest minds is always a noteworthy objective of the cluster.

The challenges and issues [besides the Covid-19 Pandemic] of the global aerospace industry — and PR is not the exception — can be described in a continuous loop (see Diagram 1):

[yprm_heading content_aling=”tac” uniqid=”5f36c77deae22″ heading=”The challenges and issues of the global aerospace industry” heading_fs=”{“xs“: {“value“: “20“, “size“: “px“}}” sub_heading=”Diagram 1:”]