The COVID-19 pandemic fundamentally changed the way governments and businesses think about global supply chains.

For decades, manufacturers optimized production by moving operations to lower-cost jurisdictions around the world. The pandemic exposed the vulnerabilities of that model. Shortages of pharmaceuticals, medical devices, personal protective equipment, semiconductors, and other critical products demonstrated that efficiency alone could no longer be the primary objective. Resilience had become equally important.

Today, reshoring and nearshoring have become central components of U.S. industrial policy.

One question remains especially relevant:

What role can Puerto Rico play in rebuilding America’s manufacturing capacity?

That question was the focus of a conversation between Luis Fortuño, former Governor of Puerto Rico (2009–2013) and Partner at Steptoe LLP, and Adam Greenfader, Chairman of AG&T. Their discussion explored Puerto Rico’s unique position within the United States and why the island remains one of America’s most important strategic manufacturing platforms.

A Manufacturing Legacy

Puerto Rico’s manufacturing story began long before COVID-19.

Beginning with Operation Bootstrap in the late 1940s, Puerto Rico became one of the United States’ premier manufacturing hubs. Over the following decades, the island attracted many of the world’s leading pharmaceutical, biotechnology, medical device, aerospace, and advanced manufacturing companies.

At its peak, Puerto Rico produced a significant share of the pharmaceuticals consumed in the United States and became home to one of the highest concentrations of pharmaceutical manufacturing facilities anywhere in the world.

That industrial base continues to represent one of Puerto Rico’s greatest competitive advantages.

Why Puerto Rico Still Matters

Governor Fortuño emphasized that Puerto Rico possesses several unique characteristics that are difficult to replicate elsewhere.

First, the island already has an extensive network of FDA-approved manufacturing facilities, many of which can be expanded or modernized far more quickly than constructing entirely new plants.

Second, Puerto Rico has a highly skilled workforce with decades of experience in highly regulated industries including pharmaceuticals, biotechnology, life sciences, aerospace, and medical devices.

Third, the island’s universities—particularly the University of Puerto Rico at Mayagüez (RUM)—continue to produce outstanding engineers, scientists, and technology professionals who support many of the world’s leading manufacturers.

Combined with Puerto Rico’s status as a U.S. jurisdiction, these assets create a compelling environment for advanced manufacturing.

Lessons from the Past

The conversation also examined the factors that contributed to Puerto Rico’s manufacturing decline.

The expiration of Section 936, increased global competition, the implementation of NAFTA, and aggressive incentive programs offered by countries such as Ireland, Singapore, and China all encouraged manufacturers to relocate production.

At the same time, Puerto Rico faced economic recession, rising energy costs, fiscal challenges, and the devastating impacts of Hurricanes Irma and Maria.

Despite these setbacks, the island retained one of its greatest strengths—its manufacturing ecosystem.

The Reshoring Opportunity

The pandemic fundamentally altered how companies evaluate supply chains.

Today, resilience, geographic diversification, national security, and supply chain reliability have become strategic priorities.

Puerto Rico is uniquely positioned to benefit from these trends.

As a U.S. territory operating under the American legal, regulatory, and intellectual property framework, Puerto Rico offers manufacturers many of the advantages of domestic production while maintaining strategic proximity to major U.S. markets.

Rather than rebuilding manufacturing capacity from the ground up, many companies have the opportunity to leverage an existing industrial base supported by experienced workers, established infrastructure, and decades of operational expertise.

Policy and Investment

The discussion also addressed the importance of public policy in supporting Puerto Rico’s manufacturing future.

At the time, bipartisan legislation introduced by Resident Commissioner Jenniffer González-Colón, together with members of Congress, sought to strengthen America’s critical supply chains while recognizing Puerto Rico’s strategic role in national manufacturing.

Although specific legislation has evolved over time, the broader objective remains unchanged: strengthening domestic manufacturing capacity while reducing dependence on distant supply chains for essential products.

Looking Back

Viewed today, many of the observations made during this conversation proved remarkably accurate.

Reshoring has become a central objective of U.S. industrial policy.

Supply chain resilience now influences corporate site selection decisions.

Federal investment in advanced manufacturing has accelerated, and Puerto Rico continues to attract new interest from pharmaceutical, life sciences, medical technology, and advanced manufacturing companies seeking to expand production within the United States.

The conversation serves as an important reminder that Puerto Rico’s manufacturing potential did not begin with COVID-19—it simply became impossible to ignore.

AG&T’s Perspective

For more than three decades, AG&T has worked at the intersection of economic development, real estate, infrastructure, hospitality, and industrial investment throughout Puerto Rico and the Caribbean.

Our conversations with policymakers, industry leaders, investors, and manufacturers have consistently reinforced one conclusion: Puerto Rico’s future will be built upon a diversified economy. Puerto Rico is uniquely positioned not only to participate in America’s manufacturing renaissance, but to help lead it.