Monday, November 30, 2015

Cuba - Infrastructure, Information & Inspiration

Cuba: Infrastructure, Information & Inspiration
Kevin O'Marah

Opinions expressed by Forbes Contributors are their own.
I just spent a week on an educational tour of Cuba that bounced through
social, cultural, artistic, and economic institutions all poised to
change radically as the possibility of an embargo-free relationship with
the United States looms in the near future. The bottom line is one of
great opportunity, but with deep caveats in emotional and philosophical


As of November 2015 Havana is both bursting with tourist spending and
creaking under the weight of consumer need. The inflow of foreign cash
crashes on the rocks of inadequate plumbing, telecommunications,
refrigeration and transport infrastructure. Tourists are generally
happy, but mostly because they accept compromised living conditions in
return for enchanting historical depth and a magnetic host population.

The colonial, art deco and soviet-heroic building stock are extensive
but almost all in a state of grim decay. The city had 96,000 residents
in 1810 which was then identical to New York and nearly three times
Boston. By 1950 it had grown nearly tenfold. Its historical district
is no mere quaint square but an entire city that was once among the
biggest and richest in the new world. Buildings spanning these eras are
everywhere and all in need of repair.

Imagine combining the tourist cravings, amazing architecture and unique
skill sets of Havana with the supply chains of Home Depot, Lowe's and
Grainger? An economic boom is ready to happen.


Much of Cuba's history is about agriculture, especially sugar. Today
the country can't even feed itself. Looking ahead to a revitalized
economy however has nothing to do with rebuilding an export-oriented
agricultural sector. The future is about information industries.

The first and for some time probably largest is tourism. Combining
colonial Caribbean attractions with a communist curiosity factor Cuba
will draw adventure tourists for decades. Stealing a page or two from
the likes of Disney could monetize what's there without destroying its
allure. The key will be pricing which should be kept high to constrain
demand within bounds that the infrastructure can support.

Related to tourism is a content business built around the arts. Music,
painting, sculpture and more are everywhere in Havana and most is
idiosyncratic enough to be refreshing to a largely saturated global
market from established arts hubs like Los Angeles, London and Paris.
Check with Google, Amazon and Nike for outlets to leverage this resource.

Bigger still, and potentially unique is the information intensive
biopharmaceuticals sector which includes some 60 laboratories around the
country that develop medicines including for example an 80% effective
cure for diabetic foot called Heberprot. In addition, dozens of
vaccines and medications that are made only in Cuba suggest a wealth of
new knowledge that could contribute meaningfully to the global
healthcare sector.

Medical services sold or traded to customers in the Amazon, sub-Saharan
Africa and central America are in fact the second biggest export earner
after tourism in Cuba. Add the large number of trained medical
professionals working domestically and the country looks like a
potential partner for global pharmaceuticals makers as a contract
development and manufacturing hub for everything from clinical trials
and laboratory work to API production.


Cuba is a sensitive topic for many people around the world. Its
inspiration is proudly linked to the Revolution and icons like Che
Guevara and Fidel Castro. The economic decisions made by this group of
leaders were unequivocally disastrous in terms of efficiency and output.
They are also still very much linked to a legacy of nationalization of
assets that left many furious and bitter. And yet, the confidence,
equanimity and initiative of today's Cuban people suggest that some
things worked out well enough.

The path forward will demand great generosity of spirit and a lot of
humility on all sides. Legal battles await on the road to normalized
relations and some, like Bacardi still deserve compensation.

Source: Cuba: Infrastructure, Information & Inspiration - Forbes -

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