The Iranian government’s policy shift to transform its oil-based economy to a knowledge-based one since the start of President Hassan Rouhani’s first tenure in 2013 has fostered the expansion of technology ecosystem.
The Vice Presidential Office for Science and Technology has published an infographic, depicting the status of knowledge-based companies and startups from March 2013 till June 2021, Tasnim News Agency reported.
According to the infographic, only 55 tech companies were operating nationwide in 2013-14, with an average yearly revenue of 2 trillion rials ($8.3 million).
The domestic technology ecosystem has grown tremendously, thanks to official backing and private investment, to 6,030 tech entities registered till June 2021.
According to the data, knowledge-based enterprises registered a 450-fold increase in revenue throughout the period, reaching 900 trillion rials ($3.75 billion).
Despite the fact that tech units have expanded into a wide range of fields, statistics show that their top three interests are information and communications technologies, power, electronics and machinery.
Regardless of the ecosystem's interests and preferences, startups specialized in ICT, computer software development and chemical materials have earned the highest income. The least has been earned by tech companies engaged in the food and biotech industries.
The infographic also indicates that the capital city of Tehran is home to the largest share of tech units, followed by Isfahan, Fars, Khorasan Razavi and East Azarbaijan provinces.
According to the vice presidential office, these tech firms have helped bolster domestic production, curb the impact of sanctions and bridge the demand-supply gap in the local market.
The office declares that 2,988 firms are growing into major producers of technological items and 616 firms have produced outstanding prototypes of tech items by seeking financial resources and marketing support.
Share of GDP
Mohammad Sadeq Khayyatian, an official with Iran’s National Innovation Fund, affiliated to the vice presidential office, earlier said the share of tech firms in Iran’s GDP has grown exponentially and is projected to reach 10% in the near future.
“Funding should be extended to accelerators and innovation centers to help expand tech units,” he said, calling on officials and private investors to boost the contribution of tech ecosystem in the country's revenue.
“Iran’s technology ecosystem is growing fast and so will its share in GDP. In fact, Iran’s first science and technology park was launched 10 years ago in Isfahan Province. Today, 46 tech parks are operating nationwide,” he said.
Because of Iran’s dependence on oil revenues, the government did not seek to generate income from the knowledge-based sector in the past.
Khayyatian stressed that the government’s policies have changed, such that Iran is increasingly counting on technology ecosystem for wealth production and the state is extending more support to knowledge-based companies.
“The government is planning to provide tech firms with tax and customs exemption, ease commercial license issuance, cut social security fee, reduce military service and extend business empowerment consultancy,” he said.
Export Promotion
Tech experts and officials believe greater financial support should be directed to boost knowledge-based exports and make domestic tech industries more self-sufficient.
INIF is planning to achieve the goal by designing a scheme that offers tech firms four kinds of support, namely loans, warranties, investments and empowerment services.
Siavash Malekifar, a deputy at the fund, said tech firms undertaking international trade can receive financial support, foreign leasing and other services to expand their export market.
“Offering grants worth 800 million rials [$3,300] to firms for attending foreign expos is one of the other services offered by the fund to help tech firms develop foreign business ties,” he said.
According to the official, export centers have been established in China, Azerbaijan, India, Iraq and Kyrgyzstan last year, which show the high capacity of Iranian knowledge-based in marketing high-tech products to the target markets.
“After opening a tech hub in Kenya in late January and later in Syria, officials are holding talks to open similar centers in Afghanistan, Qatar and Oman,” he added.
Malekifar said export centers provide tech firms with shared workspace, the opportunity to employ local professionals for marketing their products in small-scale exhibitions, market analysis and sales consultancy, in addition to deploying commercial teams for publicizing the firms and attracting customers.
INIF Loans
State-backed institutions, including INIF, never miss an opportunity to name the startup ecosystem as Iran’s major business of the future, which would help curb the country’s reliance on the sale of natural resources.
They say fiscal support to tech companies will continue to help convert the conventional domestic economy to a knowledge-based one.
According to the media, the fund has lent 50 trillion rials ($208 million) to knowledge-based businesses in the current Iranian year.
Ali Vahdat, the head of INIF, said depending on the scale and field of activity of startups, low-interest loans worth 500 billion rials ($2 million) were paid, according to the fund’s website.
“These firms have matured to the point that they know how to invest the money into their development,” he said.
“INIF also held weekend events, during which startups introduced their products and achievements to attract private investors. If they raise 20% of the money they need, the fund pays the remaining 80%.”
According to the INIF chief, the strategy would curb the government’s role in financing the startup ecosystem and help firms become more independent of state support.
