After decades of isolation and more than a half-century of strained relations with the U.S., Cuba is now working to re-establish diplomatic relations with the U.S. and lift the Cold War-era trade embargo in order to open tourism and commerce between the two countries.
In 2012, the Castro regime began slashing government jobs and promoting the public sector in an effort to create a more capitalist-compatible economy, while still preserving its communist and socialist government structure. In May, that effort was enhanced with the announcement from the Cuban Communist Party Congress that small, midsize and "micro" private businesses would be legal to operate going forward. Increasing the island nation's Internet access and opening up its borders is a continuation of those efforts, and one of the most critical steps in restoring Cuba's economy.
Warming relations between the two countries could be a boon to the tech industry here in the U.S., giving companies looking to add to their IT staffs access to highly skilled, inexpensive labor and offering tech vendors a fresh crop of customers eager for the latest gadgets and services.
Eleven technology company CEOs accompanied President Obama on a visit to the island nation in March, including Google, PayPal, Airbnb and Stripe, all of which have started offering services to citizens there.
The president made it clear that increasing Cuba's access to technology and the Internet would be the most powerful way to end the embargo, as it would solidify mutually beneficial relationships. Said Obama, "If we start seeing those kinds of commercial deals taking place and Cubans are benefiting from greater access to the Internet [...] that builds a constituency for ending the embargo."
A growing Cuban community of software, Web and mobile developers, as well as entrepreneurs in a variety of industries, have added their voices to citizens' demand for legal, modern Internet access. Many millennial Cubans own devices such as smartphones, tablets and even Apple products, but must resort to contacts in other countries to ship them in.
And finding an Internet connection that makes these devices useful is an everyday struggle. The government has begun installing public hotspots, but the small increase in accessibility has mainly served to whet the appetites of potential broadband users.
"Things like Internet access have an immediate, dramatic impact. The pent-up demand for anything having to do with Web applications, the use of the Internet, communication, sharing and the shared economy — any of that — the demand is monumental," says Pedro Freyre, a lecturer of law at Columbia University and chairman of International Practice at the law firm of Akerman LLP in Miami.
"It's a balancing act between liberty and control. The Cuban government is very concerned with security and keeping control of the political process, but at the same time I think there's a clear realization that if Cuba is going to move forward, it needs to join the 21st century," says Freyre, who is a Cuban expat and frequent visitor to the island. "[Cuba] needs to have a robust Web, it needs to have access to the world, it needs to respond to business instantly, [and] you need to have the ability while you're in Cuba to communicate quickly."
While Internet access is readily available to only about 5% of the population, Cuban citizens enjoy a high level of education — completely state-funded — that has equipped them with the ability to create their own technological workarounds to the massive restrictions that very same government has placed on them, according to Martin Carnoy, a professor at Stanford University and author of Cuba's Academic Advantage.
Literacy is at 99%, higher than almost every other nation, and college enrollment across Cuba's 47 universities is at a steady 400,000 students, according to Alan Saidi, senior vice president and chief operating officer at Academic Credentials Evaluation Institute Inc. And according to the United Nations Educational, Scientific and Cultural Organization's Global Education Digest, as of 2009, an estimated 22% of Cuban adults hold or are pursuing a higher education degree in a technical field.
Currently, Cubans with technical knowledge are often employed remotely or trade their skills with neighbors; non-technical Cubans can become entrepreneurs, often unofficially, by running private restaurants or renting their homes to tourists. "This growing number of middle-income people who have their own small businesses or work for tourism companies means that an increasing amount have been able to travel abroad or save money," says Jorge Duany, director of the Cuban Research Institute at Florida International University in Miami.
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"The Cubans working in the tech field are having to find really innovative ways to get around the system," says Alana Tummino, director of policy and head of the Cuba Working Group. "They're creating these not-so-legal Internet connections or workarounds for homes, or circulating El Paquete, so they have to be very enterprising and innovative right now if they want to try to be more connected."
El Paquete Semanal (The Weekly Package) is a terabyte of downloaded Internet content distributed throughout the country each week for the equivalent of $2 per person. It includes everything from new smartphone applications to TV. Users can download as much content as they want, and it's common for customers to download the entire package every week.
That operation is run by Elio Hector Lopez, one of a group of twenty-something, tech-savvy professionals helping to bring Cuba into the 21st century. Others include Luis Mazorra, currently living in Spain and founder of CiberCuba, a news aggregation site; Robin Pedraja, a Cuban resident and founder of Vistar Magazine, an arts and entertainment publication; and Hiram Centelles, currently living in Spain, who operates Revolico, which functions similarly to Craigslist.
El Paquete, combined with the new hotspots, has already allowed this tech and entrepreneurial community to strengthen their relationships with U.S. citizens and companies, as well as form new bonds.
"There are already a lot of connections between Cubans and global app developers and engineers," explains Tummino. "The Miami tech community and the Cuban tech community, they're able to get around [government] restrictions in certain ways."
"From the policy and [regulations] standpoint of the U.S., everything is wide open and can be done as long as you follow normal boundaries and restrictions," adds Freyre. This means getting approval from more than a dozen agencies just to ensure that the person you're looking to hire will have access to the Internet, as well as acknowledgement of all regulations, rules and areas in which the government will have control.
While the Communist nation does have many hurdles to overcome regarding technology and communication, Freyre says by following in the footsteps of similar countries — Vietnam, Chile and China — the Cuban government will evolve to accommodate the increased demands of today's business.
Last June, the Cuban government published a plan of development for the telecommunications infrastructure of the island, including a goal of offering broadband access to at least 50% of homes, while keeping costs to 5% or less of the average salary.
The following month, the government installed the first of 65 broadband hotspots, mostly in Havana. These hotspots have made it possible for Cubans to use videoconferencing to speak with relatives long-distance, as well as to send and receive assignments from remote employers.
"Our [workers] in Cuba are all early adopters, and access to broadband has allowed them to regularly send us work," says Mazorra, who runs CiberCuba. "We hope that by the end of 2016 or early 2017, we'll start to see broadband throughout the country. We have plans to set up offices in Cuba as soon as permitted."
In March, Verizon Communications announced that it had signed a direct interconnection agreement with ETECSA, the government-run Cuban telecom provider that holds a monopoly on the market. Google announced during President Obama's visit that it is in the early stages of providing high-speed Internet to Cuba. (Read opinion columnist Mike Elgan's view of what Google is really accomplishing in Cuba.)
And Sprint signed a roaming data agreement in November with the Cuban provider — at the same time that Chinese company Huawei partnered with ETECSA to sell and service smartphones.
As the country opens up, global companies have taken note, especially technology and tourism leaders, both as a source of human resources and a new consumer market that is largely untapped.
Airbnb, for example, opened up its listings to a global audience, and Stripe Atlas announced in mid-March that it would enter the country to provide its "business-in-a-box" service to allow entrepreneurs to incorporate, receive payments and open a U.S. bank account.
According to Mazorra, the Cuban technology sector is ripe for joining the global freelance economy. Millennial Cubans are anxiously awaiting the Internet not only so that they can satiate their curiosity, he says, but also improve their quality of life and expand their professional potential.
"With thousands of computer science graduates and more enrolling every year, along with a very creative ecosystem of designers, photographers and video-makers, we anticipate that freelancing will have a boom in Cuba once the technology to pay and communicate is in place," says Mazorra.