Twenty-five years ago, I could not have confidently pointed to Costa Rica on a map. What I did know—very clearly—was that manufacturing competition had changed. By the late 1990s, we were no longer competing with companies in California or Wisconsin. We were competing with China and Mexico. If we wanted to remain relevant, we had to go somewhere.

In 1997, we began seriously exploring offshore manufacturing. In 1998, a local Costa Rican water heater manufacturer approached us about doing work together. We agreed to install a small, nearly obsolete production line in Costa Rica, fully expecting that we would need to rework most of the output back in the U.S.—and still come out ahead based purely on cost.

At the time, the labor economics were stark. In 1998, minimum wages in Costa Rica were roughly $200 per month—about $0.70 per hour on a full-time basis—while the minimum wage in Florida was $5.15 per hour, before benefits and well below what most manufacturing jobs actually paid. It sounds almost trivial today, but at the time, it mattered. More importantly, it forced us to confront a much bigger question: “Where would the next generation of manufacturing capability come from?”

We Came for Labor—But Stayed for Capability

Over time, another reason quietly became just as important as viability: stability.

Like most manufacturers entering Costa Rica at the time, labor arbitrage was the headline justification. But from the beginning, our concern ran deeper. Our first generation of skilled craftsmen—many of them immigrants from Eastern Europe following World War II—were aging out. Fewer young people in the U.S. were willing to commit to the decade-long journeyman path required to master our trade.

Our model was in jeopardy.

Costa Rica offered something we were struggling to find at home: motivated people, a strong work ethic, and the runway to develop talent patiently. But it also offered something that has only grown more valuable with time—stability.

In an industry increasingly shaped by volatility, Costa Rica taught me the importance of building in a place where institutions hold, where the rules are predictable, and where long-term planning is still possible. That kind of stability is rare today, and it feels rarer by the minute.

We needed that stability to play the long game—to invest patiently, develop people deeply, and build capability that compounds over decades rather than quarters. Early on, we moved lower-risk, labor-intensive products—home safety switches for the HVAC industry. These products were price-sensitive, mature, and process-stable, which made them ideal candidates for early transfer.

I would like to say our strategy unfolded exactly as planned. The reality was less elegant. After 9/11, the automotive industry—where we were heavily invested—suffered a sharp contraction. What had been a five-year transition plan became a five-month necessity. By the end of 2002, the balance of our operations had shifted decisively to Costa Rica.

What followed was a stress test few organizations survive. In a compressed timeframe, Costa Rican teams absorbed three highly complicated, never-before-seen technologies, each requiring precision, discipline, and deep process understanding. That transition succeeded not because labor was cheap, but because capability had been quietly built.

Challenging “Common Sense” Early—and Often

One of the earliest lessons Costa Rica taught us was how unreliable “common sense” can be.

The first two products we moved were for dishwashers and furnaces. Only after six months did we realize how uncommon both products were in Costa Rica. The technicians assembling them had little intuitive familiarity with how they worked, what happened if they failed, or how end users interacted with them. Training had to start at a more fundamental level than we anticipated.

The consequences of assumptions showed up elsewhere as well. Less than a year after opening, I was informed—confidently—that critical material had been air-shipped from Costa Rica to the U.S. at great expense. It turned out the shipment wasn’t needed at all. That single mistake cost more than $30,000.

The lesson was immediate and permanent—everything must be in writing, and everything must be in two languages.

Dual-language documentation was not a courtesy; it was a quality system requirement. It took less than a year to learn that lesson, and decades to appreciate how foundational it was.

Labor Is Easy. Capability Is Not.

One area we underestimated early on—like most newcomers—was people, not in terms of talent, but in terms of interaction. Costa Rica has never lacked capable people. What took longer to understand was how differently those capabilities show up in day-to-day interaction.

As New Yorkers operating in a land of pura vida, we had to recalibrate. The interactions are genuinely positive, respectful, and relationship-driven—but they are not the same as what we were used to. Where I might instinctively take one fast left to get around a problem, Costa Rica often requires three careful rights to navigate the same corner, especially when politics, hierarchy, or harmony are involved.

Costa Rica also shares something with Scandinavian cultures: a deeply egalitarian mindset. That creates strong camaraderie, loyalty, and team cohesion. It is a real strength. But it can also make direct, uncomfortable conversations harder, particularly when clarity is urgently needed.

One of our most important team-building accomplishments has been assembling leaders who are not afraid to call things as they are—respectfully, but plainly. That is not easy to cultivate here, and it does not happen by accident. It requires trust, cultural fluency, and a shared understanding that candor is an act of commitment, not conflict.

Closely tied to that realization was a lesson about learning and development. Early on, I was genuinely surprised to discover nearly 30% of our indirect staff were attending school at night, pursuing advanced technical or professional education on their own time. That level of personal investment forced us to rethink what truly motivates people.

In Costa Rica, opportunity for growth matters as much as compensation—sometimes more. People wanted to know not just what their job was today, but who they could become tomorrow. Once we recognized that, structured learning, career pathways, and visible commitment to development became core parts of our operating model, not optional benefits. What it lacked early on—and what many newcomers still underestimate—was depth of manufacturing experience.

Engineering talent surprised us in positive ways. Adaptability, analytical thinking, and ownership came naturally. What took far longer to develop were toolmakers, process engineers, and automation specialists with judgment forged by repetition and failure.

Some skills transferred well from the U.S. Others did not. Tooling intuition, in particular, resisted classroom learning. It required years of hands-on exposure and responsibility. Sending people abroad for training helped—but only when they returned empowered to make decisions, not just follow instructions.

This is where many new entrants struggle today. They see the ecosystem that exists now and assume it has always been there. It hasn’t. It was built deliberately, patiently, and at times painfully. Day by day, year by year.

Tooling: The Gap That Never Fully Disappears

Tooling remains one of the most misunderstood aspects of manufacturing in Costa Rica.

In the early years, nearly all tooling came from the U.S. Attempts to localize tooling too quickly led to predictable outcomes: missed schedules, quality issues, and false economies. The mistake was not localization itself—it was trying to do it before the surrounding ecosystem was ready.

What ultimately worked was a hybrid model: experienced external toolmakers paired with developing local teams, transferring not just designs but decision-making logic. True capability came not from machines or software, but from judgment and a safe and overdone transfer of knowledge. Even today, anyone who believes Costa Rica offers a fully plug-and-play tooling ecosystem is confusing progress with maturity.

The Shift to Medical Devices

The move into medical devices was not part of our original plan. For years, we were heads down building Micro Costa Rica to compete in the global automotive manufacturing ecosystem. Precision, automation, and execution under pressure were table stakes, and the automotive industry has a way of hardening those skills quickly.

While we were focused there, the medical device community grew up around us. We began receiving frequent requests—initially for tooling repairs and process help rather than full programs. At one point, we were repairing a large share of the molds used by early medical device manufacturers in Costa Rica. Those requests came not because we were pursuing the medical market, but because automotive-forged skills—precision, repeatability, and discipline—translated naturally.

Over time, the consistency of that demand forced a reassessment. We realized we could meaningfully support the industry’s growth, and we also recognized that Costa Rica’s success as a medical device hub mattered to us. The opportunity was abundant, but more importantly, it aligned with capabilities we had spent years building. So, we made a deliberate shift—not away from our roots, but by applying the rigor earned in automotive to a regulated environment that demanded it.

Advice Most People Learn Too Late

There is another reality that is rarely discussed openly, particularly by those of us who have been in Costa Rica long enough to build close relationships across the ecosystem. The free zone regime has been a powerful catalyst for Costa Rica’s growth, and it has enabled many companies to get started more quickly than they otherwise could have. For new entrants, however, it is important to understand what you are—and are not—buying. In practice, you are often buying speed to entry: a fence, a gate, and a compliant structure that helps you get operational. What it does not automatically provide is insulation from complexity, risk, or operational responsibility. The sense of security can feel stronger on paper than it does in day-to-day execution. None of this is a criticism of developers or the system itself. It is simply a reminder that incentives and infrastructure do not replace leadership, presence, and judgment. Those still have to be built patiently, inside the fence.

The biggest mistake new entrants make in Costa Rica is assuming speed equals success. Everyone is in a rush to receive a payback. In reality, the first 24 to 36 months are often more expensive than remaining in the United States. Looking back, I would have baked that math in from the beginning and built accordingly—slower, deeper, and with greater focus on training, culture, and shared judgment.

Conclusion

If I had to summarize Costa Rica manufacturing in one sentence, it would be this: “The opportunity is real, but it is not a shortcut.” What do we do today that only 25 years of experience enables? We adapt faster because we’ve seen failure more times than I care to remember—and we’ve learned to be discerning about what to preserve and what to discard. We know where investment pays off and where it doesn’t. Most importantly, we understand manufacturing excellence is not transplanted. It is grown.

Today, that discernment matters more than ever. Some knowledge must be deliberately passed forward—the fundamentals of process discipline, tooling judgment, and quality intuition that only experience teaches. At the same time, we actively encourage younger, local talent to challenge the old models, discard what no longer serves us, and fully embrace new possibilities.

As we push deeper into digital manufacturing every day, that balance—respecting hard-earned lessons while making room for reinvention—has become one of our greatest advantages. That is the lesson Costa Rica teaches best, if you stay long enough to learn it.

Throughout his career, Michael Tucci has succeeded by redefining the rules of the game. After completing his education by designing his own NYU course of study, he earned a combined degree (magna cum laude) in business and Eastern philosophy. Today, as CEO of Micro Technologies, he has transformed the company into an innovative digital venture delivering high-consequence-of-failure sub-components to demanding technology OEMs in the medical device and other markets. He is also a driving force behind the YPO ImpactXcellerator, a first-of-its-kind initiative to link the most disruptive technologies designed with passionate business leaders to affect massive global change. Tucci and his family reside in the beautiful mountains of Costa Rica, where he cultivates his own life as a martial arts instructor, motorcycle adventurer, and paddle surfer.