Opinion - U.S. News

Puerto Rico is in turmoil. Here's how business on the island is being whipsawed

Alberto Lugo, founder and CEO of INVID
Key Points
  • Governor Ricardo Rossello of Puerto Rico is expected to resign on Wednesday, July 24.
  • Thousands of Puerto Ricans have taken to the streets in massive demonstrations to protest political corruption.
  • Business leaders on the island are trying to cope with the political and economic uncertainty.
Union workers join with other protesters as they demonstrate against Ricardo Rossello, the Governor of Puerto Rico on July 19, 2019 in Old San Juan, Puerto Rico. There have been calls for the Governor to step down after it was revealed that he and top aides were part of a private chat group that contained misogynistic and homophobic messages.
Joe Raedle | Getty Images News | Getty Images

SAN JUAN — It's been difficult this week to step outside my office and venture into the financial district in San Juan. Given the massive demonstrations calling for Gov. Ricardo Rossello to resign, it's been hard to pretend to conduct business as usual. It is a situation at a tipping point, and the governor just might hand in his resignation today.

No one in the business community is surprised that the protests erupted, given the events we've seen in recent weeks. The latest development — the leak of Gov. Rosello's controversial private chat messages with members of his administration — followed the indictment earlier this month of officials, including the former Education Secretary and former executive director of the Puerto Rico Health Insurance Administration.

Meanwhile, President Donald Trump has been calling Rosello "terrible governor" and has been vocal about inappropriate federal funds management by our governor. Trump has been saying on TV that Congress is not willing to release more funds for Hurricane Maria relief because of corruption on the island.

These events are just too big to ignore. For decades people suspected there was corruption in the government, but the chat scandal lit the fire and killed all hope and trust in the actual government cabinet. Also, the main officials of the majority of government agencies have resigned, leaving an unstable territory in all aspects.

No one knows when the turmoil will end. Business leaders on the island have to figure out now how to deal with the lingering uncertainty that's sure to follow, given that Puerto Rico is a small territory and the government is one of the biggest clients for many companies. On top of all this, many businesses are still recovering from the devastation wrought by Hurricane Maria in September 2017.

My company, INVID LLC, was among the few businesses that weren't devastated by the hurricane, but most of our clients were shut down for weeks. It was a big wake-up call.

Since opening our doors in 2003, we mostly provided our software development services to companies based in Puerto Rico, but in 2017 we expanded by opening an office in Washington, D.C., to make it easier to go after both corporate clients on the mainland and government business. It was a strategy I had learned in a program I once joined with the U.S. Small Business Administration but had never gotten around to trying until then.

Business leaders on the island have to figure out now how to deal with the lingering uncertainty that's sure to follow.

We also took the SBA's advice and started marketing our services in English—something we hadn't done before. Why limit ourselves to the local market when we can sell our software development services anywhere in the world? We now bring in almost 20% of our revenue from outside of the island, and we are ready for more!

That strategy helped us double our revenue since then and, at the same time, double our workforce to 35 employees.

Many of my fellow entrepreneurs have a much tougher road ahead. Either they run hyper-local businesses, like restaurants, which will have to tough it out, or don't have the technical expertise to expand to markets outside of the island.

Because no one knows how long the turmoil will continue, I would recommend that business owners on the island look hard for opportunities to market themselves outside of Puerto Rico, starting today. Those who wait until the trouble simmers down may find it's too late to turn their situation around.

Advertising in English is the first step. There are specialized public relations firms that can help.

But we can't diversify to other markets alone. Since the turmoil erupted, I've been hearing from business owners on the mainland who have seen our ads and want to hire us to help the economic recovery. One owner who called from Arkansas said he was seeking out a firm on the island for that specific reason.

If more businesses on the mainland consider this option, it will help the business community in Puerto Rico recover from this latest blow. The government isn't likely to help us out of this situation, but with many businesses here ready, willing and able to serve distant customers, giving us a chance will help us do our part to turn things around.

— By Alberto Lugo. Mr. Lugo is the founder and CEO of INVID, LLC, a full-service IT company specializing in software development. Follow him on Twitter at @albertol.