Cuba works to join the global economy, and IT sees a golden opportunity

Cuba works to join the global economy, and IT sees a golden opportunity
By Rebecca Gatesman
Computerworld | Jun 2, 2016 3:30 AM PT

Ask IT hiring managers and tech executives what they think about the 6
million educated adults in Cuba, many of whom have an interest in IT,
coming online in the near future. Then tell them that Cuba's National
Statistics Office reports those citizens currently make an average
salary of just $20 to $30 per month, and statistics from the United
Nations show that over a fifth of them have technical degrees from
reputable universities. It's enough to make hearts race.

After decades of isolation and more than a half-century of strained
relations with the U.S., Cuba is now working to re-establish diplomatic
relations with the U.S. and lift the Cold War-era trade embargo in order
to open tourism and commerce between the two countries.

In 2012, the Castro regime began slashing government jobs and promoting
the public sector in an effort to create a more capitalist-compatible
economy, while still preserving its communist and socialist government
structure. In May, that effort was enhanced with the announcement from
the Cuban Communist Party Congress that small, midsize and "micro"
private businesses would be legal to operate going forward. Increasing
the island nation's Internet access and opening up its borders is a
continuation of those efforts, and one of the most critical steps in
restoring Cuba's economy.

Warming relations between the two countries could be a boon to the tech
industry here in the U.S., giving companies looking to add to their IT
staffs access to highly skilled, inexpensive labor and offering tech
vendors a fresh crop of customers eager for the latest gadgets and services.

Eleven technology company CEOs accompanied President Obama on a visit to
the island nation in March, including Google, PayPal, Airbnb and Stripe,
all of which have started offering services to citizens there.

The president made it clear that increasing Cuba's access to technology
and the Internet would be the most powerful way to end the embargo, as
it would solidify mutually beneficial relationships. Said Obama, "If we
start seeing those kinds of commercial deals taking place and Cubans are
benefiting from greater access to the Internet [...] that builds a
constituency for ending the embargo."

A growing Cuban community of software, Web and mobile developers, as
well as entrepreneurs in a variety of industries, have added their
voices to citizens' demand for legal, modern Internet access. Many
millennial Cubans own devices such as smartphones, tablets and even
Apple products, but must resort to contacts in other countries to ship
them in.

And finding an Internet connection that makes these devices useful is an
everyday struggle. The government has begun installing public hotspots,
but the small increase in accessibility has mainly served to whet the
appetites of potential broadband users.

"Things like Internet access have an immediate, dramatic impact. The
pent-up demand for anything having to do with Web applications, the use
of the Internet, communication, sharing and the shared economy — any of
that — the demand is monumental," says Pedro Freyre, a lecturer of law
at Columbia University and chairman of International Practice at the law
firm of Akerman LLP in Miami.

"It's a balancing act between liberty and control. The Cuban government
is very concerned with security and keeping control of the political
process, but at the same time I think there's a clear realization that
if Cuba is going to move forward, it needs to join the 21st century,"
says Freyre, who is a Cuban expat and frequent visitor to the island.
"[Cuba] needs to have a robust Web, it needs to have access to the
world, it needs to respond to business instantly, [and] you need to have
the ability while you're in Cuba to communicate quickly."

While Internet access is readily available to only about 5% of the
population, Cuban citizens enjoy a high level of education — completely
state-funded — that has equipped them with the ability to create their
own technological workarounds to the massive restrictions that very same
government has placed on them, according to Martin Carnoy, a professor
at Stanford University and author of Cuba's Academic Advantage.

Literacy is at 99%, higher than almost every other nation, and college
enrollment across Cuba's 47 universities is at a steady 400,000
students, according to Alan Saidi, senior vice president and chief
operating officer at Academic Credentials Evaluation Institute Inc. And
according to the United Nations Educational, Scientific and Cultural
Organization's Global Education Digest, as of 2009, an estimated 22% of
Cuban adults hold or are pursuing a higher education degree in a
technical field.

Currently, Cubans with technical knowledge are often employed remotely
or trade their skills with neighbors; non-technical Cubans can become
entrepreneurs, often unofficially, by running private restaurants or
renting their homes to tourists. "This growing number of middle-income
people who have their own small businesses or work for tourism companies
means that an increasing amount have been able to travel abroad or save
money," says Jorge Duany, director of the Cuban Research Institute at
Florida International University in Miami.

The flash drive revolution

"The Cubans working in the tech field are having to find really
innovative ways to get around the system," says Alana Tummino, director
of policy and head of the Cuba Working Group. "They're creating these
not-so-legal Internet connections or workarounds for homes, or
circulating El Paquete, so they have to be very enterprising and
innovative right now if they want to try to be more connected."

El Paquete Semanal (The Weekly Package) is a terabyte of downloaded
Internet content distributed throughout the country each week for the
equivalent of $2 per person. It includes everything from new smartphone
applications to TV. Users can download as much content as they want, and
it's common for customers to download the entire package every week.

That operation is run by Elio Hector Lopez, one of a group of
twenty-something, tech-savvy professionals helping to bring Cuba into
the 21st century. Others include Luis Mazorra, currently living in Spain
and founder of CiberCuba, a news aggregation site; Robin Pedraja, a
Cuban resident and founder of Vistar Magazine, an arts and entertainment
publication; and Hiram Centelles, currently living in Spain, who
operates Revolico, which functions similarly to Craigslist.

El Paquete, combined with the new hotspots, has already allowed this
tech and entrepreneurial community to strengthen their relationships
with U.S. citizens and companies, as well as form new bonds.

"There are already a lot of connections between Cubans and global app
developers and engineers," explains Tummino. "The Miami tech community
and the Cuban tech community, they're able to get around [government]
restrictions in certain ways."

"From the policy and [regulations] standpoint of the U.S., everything is
wide open and can be done as long as you follow normal boundaries and
restrictions," adds Freyre. This means getting approval from more than a
dozen agencies just to ensure that the person you're looking to hire
will have access to the Internet, as well as acknowledgement of all
regulations, rules and areas in which the government will have control.

While the Communist nation does have many hurdles to overcome regarding
technology and communication, Freyre says by following in the footsteps
of similar countries — Vietnam, Chile and China — the Cuban government
will evolve to accommodate the increased demands of today's business.

The wheels start turning

Last June, the Cuban government published a plan of development for the
telecommunications infrastructure of the island, including a goal of
offering broadband access to at least 50% of homes, while keeping costs
to 5% or less of the average salary.

The following month, the government installed the first of 65 broadband
hotspots, mostly in Havana. These hotspots have made it possible for
Cubans to use videoconferencing to speak with relatives long-distance,
as well as to send and receive assignments from remote employers.

"Our [workers] in Cuba are all early adopters, and access to broadband
has allowed them to regularly send us work," says Mazorra, who runs
CiberCuba. "We hope that by the end of 2016 or early 2017, we'll start
to see broadband throughout the country. We have plans to set up offices
in Cuba as soon as permitted."

In March, Verizon Communications announced that it had signed a direct
interconnection agreement with ETECSA, the government-run Cuban telecom
provider that holds a monopoly on the market. Google announced during
President Obama's visit that it is in the early stages of providing
high-speed Internet to Cuba. (Read opinion columnist Mike Elgan's view
of what Google is really accomplishing in Cuba.)

And Sprint signed a roaming data agreement in November with the Cuban
provider — at the same time that Chinese company Huawei partnered with
ETECSA to sell and service smartphones.

As the country opens up, global companies have taken note, especially
technology and tourism leaders, both as a source of human resources and
a new consumer market that is largely untapped.

Airbnb, for example, opened up its listings to a global audience, and
Stripe Atlas announced in mid-March that it would enter the country to
provide its "business-in-a-box" service to allow entrepreneurs to
incorporate, receive payments and open a U.S. bank account.

According to Mazorra, the Cuban technology sector is ripe for joining
the global freelance economy. Millennial Cubans are anxiously awaiting
the Internet not only so that they can satiate their curiosity, he says,
but also improve their quality of life and expand their professional
potential.

"With thousands of computer science graduates and more enrolling every
year, along with a very creative ecosystem of designers, photographers
and video-makers, we anticipate that freelancing will have a boom in
Cuba once the technology to pay and communicate is in place," says Mazorra.

Rebecca Gatesman

Rebecca Gatesman is a freelance writer in Boston, covering technology,
finance and marketing.

Source: Cuba works to join the global economy, and IT sees a golden
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