Dominican Republic: The Next Startup Hotspot?
The Dominican Republic has increasingly signaled its ambition to become a global hub for entrepreneurs and innovation. The question is: can the nation be the ‘Silicon Beach’ of startup culture? The answer might be yes, but it’s a complex picture.
The Dominican Republic’s efforts in this area date back nearly a decade. In 2022, the Ministry of Industry & Commerce (MICM) launched RD-Emprende (DR does Business), modeled after the U.S. Small Business Administration (SBA). According to the MICM, RD-Emprende consolidates 38 entities to support new company development. RD-Emprende is part of a decade-long entrepreneurial movement initiated in 2016 with the enactment of Entrepreneurship Law No. 655-16. This and other subsequent legislation have put into place a comprehensive legal structure designed to facilitate foreign business operations within the DR, aiming for greater economic expansion and development. The Dominican president himself, Luis Abinader, has even thrown his hat in the ring by coining the term “Silicon Beach”.
President Abinader announced the urban development of 8.5 million square meters in Puerto Plata, where new world-class hotels and the “DR Silicon Beach” will be built, as part of a 2021 press release. This project aims to create an “ecosystem of creativity and innovation where technology companies, national and international universities, research centers, corporations, and manufacturing will come together, and they will be able to set up shop and have all the facilities to develop their products and services.”
While the DR has made considerable legislative and promotional progress, it still hasn’t produced a tech startup that has achieved widespread economic success, nor a startup culture that can compete with Puerto Rico, which is home to Parallel 18, one of the largest international startup accelerators south of the United States.
So, what’s missing from the Dominican Republic’s startup ecosystem?
In a larger perspective, some essential ingredients seem to be lacking:
- Effective startup programming
- A strong mission, leadership, and vision
- Improved collaboration within the corporate sector
In other words, startup acceleration needs modernization.
The incubation and accelerator scene in the DR, while still relatively small, is expanding. Key accelerator programs include BOOST Acceleration Camp, CREE Banreservas, and Impúlsate Popular. However, the majority of these organizations accept SMBs in addition to tech startups. In our analysis of these acceleration programs, the emphasis is placed on mentorship, resource allocation, and company formation. Yet, most of the industry leaders that mentor these startups come from established domestic industries, possessing considerable expertise in enterprise-level business but lacking valuable experience in startup growth.
For a startup in the Dominican Republic to thrive, revenue operations, in addition to practical support, access to world-class vendors, and experienced talent capable of bringing startups to market, are still absent from the local ecosystem. It’s worth asking: is that the recipe for success?
Consider how influential tech startups worldwide, such as Google, Amazon, and Uber, have internal innovation centers. The purpose of these innovation centers is threefold:
- Strategically and effectively invest in venture capital, which then bolsters the company’s productivity, competitiveness, and market share.
- Use industry-specific technology from the most talented people who are innovating in that field.
- To stay on the leading edge of market developments (remember Blockbuster vs. Netflix?).
Large Dominican companies, such as Arajet in aviation or NewTech in software, do not currently deploy venture capital initiatives to invest in or incubate beneficial startup technologies for tourism or nearshoring industries, respectively.
In 2024, the #ProvokeVisibility Campaign was nominated by the United Nations World Summit Awards in the Dominican Republic. This campaign aims to empower entrepreneurs’ economic growth while increasing visibility on the Dominican startup scene. By fostering a sense of community around startup culture, budding entrepreneurs will be more effectively nurtured to attain world-class, economy-transforming status. At the same time, those same entrepreneurs offer modern resources, capital, and leadership to startups in the Dominican Republic.
Many Asian nations have given their startups a celebrity status, which has led to rapid economic growth, industrialization, and national pride. Until now, no single figure has galvanized Dominican startups like Steve Jobs did in the United States.
The Dominican Republic is already implementing strategic national interests, including infrastructure improvements, cybersecurity, and talent nearshoring. With increased collaboration and transparency among leaders in the startup and innovation sectors, it may very quickly surpass Puerto Rico to become the region’s leading startup hub. For a resourceful startup willing to take those extra steps, the Dominican Republic is now a great destination for digital nomads and startup founders.
