Cuba's nascent tech industry is growing fast
As icy U.S.-Cuba relations begin to thaw, Cuba's knowledge economy is
waking up. But it's a delicate process
Like many Cubans, Ubaldo Huerta left his homeland during a time of deep
economic crisis following the dissolution of the Soviet Union in 1989,
which decimated Cuba's economy and sent tens of thousands of Cubans
looking for better opportunities abroad. The 47-year-old electrical
engineer quickly found his way to Silicon Valley, where he worked as a
software developer for numerous startups and gained his U.S.
citizenship. Later he relocated to Barcelona, founded a Craigslist-like
online classified website and sold his venture to eBay in 2005.
But despite these accomplishments, Huerta never lost sight of his
homeland. He began splitting his time between Spain and Cuba and three
years ago co-founded Fonoma.com, a small startup that enables people
outside of Cuba to make payments to prepaid cell phone and WiFi accounts
used by friends and family in Cuba. The business employs 15 people,
including seven in Havana.
"I want to be in Cuba," Huerta told Salon. "I cannot find better
developers than the ones that I've found here. I used to work in Silicon
Valley so I don't really need the money. I'm doing this because it makes
economic sense, and it's fun."
Cuba is in a better economic position today than it was when Huerta left
25 years ago. Huerta said that he amount of cell phone and WiFi account
deposits Fonoma processes grew by 40 percent last year amid Cuba's
nascent WiFi revolution. Today, the startup handles hundreds of
thousands of dollars' worth of transactions, half of them from the
United States — an online venture that would have been unheard of a
Huerta isn't alone. Last year, computer engineer Bernardo Romero
González came up with an idea to develop an online ordering system that
allows people outside of Cuba to pay for gifts purchased from local
Cuban businesses to be delivered to friends and relatives on the island.
"This platform helps other entrepreneurs in Cuba to grow their
market," Romero told Salon. "Businesses in Cuba are limited to their
town or city because they don't have access to e-commerce. This creates
the financial platform that allows them to put their products on the
Expected to go live before the end of the year, Cubazon will process
credit-card payments outside of Cuba and then wire money through the
same network used by Cubans abroad to send money to relatives back home
to pay the local Cuban business, such as a flower shop or bakery, to
make and deliver the gift. This system legally circumvents current U.S.
Treasury Department restrictions on payment processing in Cuba. Romero
expects 80 percent of his business to come from consumers in the United
Romero was one of 10 winners of last year's 10x10kCuba, a contest
sponsored by U.S. groups promoting Cuban tech innovation that includes
the University of Stanford's School of Engineering. The 33-year-old
programmer recently completed an intense two-week program at Colorado's
Boom Town Accelerator, a Boulder-based tech innovation incubator
participating in the program.
Planting seeds for success
Since Cuba and the United States began the process of thawing their icy
Cold War-era relations, highly educated Cubans like Huerta and Romero
have become two of a small number of tech-industry pioneers cautiously
planting their stakes on their country's future relations with the
United States. Former U.S. President Barack Obama's efforts to promote
private-sector engagement, along with a series of reforms in Cuba that
allows small businesses to operate, has made it easier for Cuba's
tech-startup economy, though many challenges still remain.
Proponents of normalizing relations between the U.S. and Cuba argue that
promoting the tech industry in Cuba would unlock a lot of unused
potential, and help prevent Cuba's young tech talent from leaving the
island. Cuba needs these innovators at home to help figure out a way to
support its increasingly aging population.
Tres Mares Group, a Miami-based private equity investment firm that
follows business activity in Cuba, estimates that about 3,000 Cubans
currently work as freelancers in the local knowledge economy — many of
them doing work for companies in Canada and Spain — and as many as
50,000 qualified university-trained computer science engineers are
sitting on the bench, unable to fully utilize their skills. Most of
these computer science degree holders are graduates of the University
Campus José Antonio Echeverría (CUJAE by its Spanish acronym) or the
Universidad de Ciencias Informáticas, which is often compared to MIT.
On the U.S. side, companies are also starting to pay more attention to
the potential pool of Cuban talent.
"There are at least a half dozen firms [in the U.S.] who are working
with Cuban coders and programmers already," James Williams, president of
Engage Cuba, a Washington D.C. nonprofit coalition of private companies
working to normalize U.S.-Cuban relations, told Salon. "The challenge is
that since we're in this new period, they're not promoting these
activities yet and keeping them quiet until this becomes more normalized
and routine. But it's something that's already happening."
Indeed, there is still a lot to be done, and a lot that can be undone,
which is why many stakeholders on both sides of the Florida Straits are
being cautious about promoting their activities.
On the Cuban side, many hardliners in Cuba's Communist government are
suspicious of U.S. efforts to promote greater Internet access,
suspicions that were confirmed in 2014 when reports emerged that the
U.S. Agency for International Development was secretly funding a project
that used social media to try to foment an Arab Spring-like revolution
in Cuba. Though the failed project ended in 2012, whispers among people
who declined to speak to Salon on the record because of the sensitivity
of the issue claim similar efforts persist through other web-based front
organizations backed by the U.S. government.
On the U.S. side is an 800-pound gorilla in the White House known as
President Donald Trump. On the campaign trail Trump criticized Obama's
Cuba policy and promised to terminate his predecessor's efforts to
normalize relations with Cuba. The president also installed Mauricio
Claver-Carone, an active supporter of the 56-year-old U.S. embargo
against Cuba, to his transition team. Congress, too, is still reticent
to remove the embargo that would be perceived to empower Cuba's
authoritarian regime with a history of human rights violations — despite
the glaring fact that Congress accepts trade and diplomatic ties with
other authoritarian governments like China and Saudi Arabia. Another
concern among proponents of closer U.S.-Cuba trade ties is the fact the
China and Cuba trade ties are growing.
Many, including Huerta and Romero, are watching to see the direction the
president will take, and they're hoping that his business-focused
disposition will encourage him to avoid disrupting efforts to promote
Romero said he hopes that at worst Trump doesn't upend efforts begun by
Obama three years ago to help him and other Cubans grow a local tech
industry. At best he said he would like to see better access to U.S.
banking services and to be able to market his apps on sites like the
"After December 2014, when closer relations began between both
countries, I had the opportunity to come to the United States to make
connections and find people to help me to develop my ideas," he said. "I
think that the United States is naturally the country that should do
this work with Cuba."
Source: Cuba's nascent tech industry is growing fast - Salon.com -