The Role of the Apparel Industry in Puerto Rico's Economic Development

THE BOLE OF THE APPABEL INDUSTRY IN PUERTO RICO'S ECONOMIC DEVELOPMENT Robert J. Tata Puerto Rico's program of planned economic development has achieved outstanding success. The widely-acclaimed "Operation Bootstrap " has transformed the island from abject poverty to its present status as Latin America's wealthiest region. Governmental planning and economic stimulation have been key parts of the development process. Recognizing the island's limited potential for agriculture, mining, and service activities, government planners since 1948 have promoted manufacturing as the vehicle for economic progress. The Puerto Rican Industrial Development Company, Economic Development Administration (Fomento), and several other Commonwealth government agencies devised a variety of services to attract manufacturers to the island. These services have included tax exemptions, loans, buildings, labor training, management and engineering consultation , industrial and economic research, special incentives for particular industries and particular locations, assistance in obtaining utilities, and consultants for special problems. (1) These incentives eliminated many of the risks of initial investment and enhanced the possibilities for profitable operations. Specific goals of the industrialization program were: 1) maximize national income; 2) abolish poverty; 3) prevent excessive urbanization; 4) aid especially depressed towns; and 5) increase revenue for the Commonwealth treasury. (2) The apparel industry has been promoted as a manufacturing type wellsuited to Puerto Rican economic conditions and as one which can help to achieve national goals. The objectives of this study are to describe the structural and locational characteristics of Puerto Rico's apparel industry and to assess the role of the apparel industry in the island's economic progress by comparing the statistics from regression analyses for 1950-1960 and 1960-1970. THE APPAREL INDUSTRY. In 1973 the apparel industry (SIC category 23) employed more people, produced more income, and Dr. Tata is Associate Professor of Geography at Florida Atlantic University in Boca Raton, FL 33431. 126 Southeastern Geographer APPAREL INDUSTRY, 1964 Puerto Rico ARECIBO CULEBRA PONCE HOUSiNDS OF PAYROLL S Figure 1. Locations of Puerto Rico's Apparel Industry: 1964. contributed more to the value of exports than any other industry in Puerto Rico. (3) Precursor to the modern apparel industry was the impoverished needlework industry. In 1940, the needlework industry was the island's third largest industry after sugar refining and tobacco. It was a cottage industry and workers were paid only a few cents per day. Apparel today is a thoroughly modern industry, and such wellknown firms as Jantzen, BVD, Maidenform, Van Raalte, Kayser-Roth, Bali, Equisite Form, Lovable and many others have large plants in Puerto Rico. Most plants produce women's, misses', children's, and infants ' undergarments. Women's and juniors' outerwear and men's and boys' suits, coats, work clothes, and furnishings are other important products. Apparel firms are located in most of Puerto Rico's 76 municipios. Comparison of the locations of the apparel industry in 1964 and 1973 indicated that it had remained concentrated in the San Juan metropolitan area and in Mayagiiez (Figs. 1 and 2). Whereas the industry was found in more municipios in 1973 than in 1964, the dominance of San Juan and Mayagiiez had also been strengthened. The San Juan concentration can be explained largely by the capital city's role as a dominant primate city in the island's economy. Because apparel is a "footloose" industry, however, it would seem that a more even spatial Vol. XVII, No. 2 127 APPAREL INDUSTRY, 1973 Puerto Rico ARFCIBU¦ PUNCF Figure 2. Locations of Puerto Rico's Apparel Industry: 1973. distribution of the industry should exist, especially in view of the government's goals to avoid excessive urbanization and to aid depressed towns. Mayagiiez was a center for the old needlework industry and perhaps this provided a base for the city's development as a leader in modern apparel production. Fomento has been moderately successful in providing most municipios with some apparel production. With some notable exceptions in the southern and central parts of the island, most municipios have made large gains in apparel payroll (Fig. 3). The apparel industry comprised some 650 plants in 1973, about 75 percent of which were promoted by Fomento. "Promoted" means that Fomento spent scarce resources to entice the firms to start operations on...