Economy, Business And Markets

Linking Iranian Entrepreneurs With Foreign Investors

Linking Iranian Entrepreneurs With Foreign InvestorsLinking Iranian Entrepreneurs With Foreign Investors

While millions had their eyes on Berlin as the city hosted the UEFA Champions League final on June 6, the European capital also hosted a three-day conference on high-tech entrepreneurship in Iran, an event estimated by the Financial Times to have been the largest gathering of its kind in more than 30 years.

The so-called “iBridge” conference gathered around 2,000 participants, mostly Iranians from the US, Europe as well as Iran in addition to foreign investors. The event followed a groundbreaking iBridge Berkeley conference last September that brought together thought leaders and experienced entrepreneurs from Silicon Valley and Iran.

Not the first sign of foreign interest in investment in Iran since the moderate government of President Hassan Rouhani took office in 2013, the Berlin event has two main aspects to talk about: firstly, its specified mission of studying opportunities and challenges in high-tech entrepreneurship, and secondly, its political and social implications in a broader context.

As to the first aspect, it is worth mentioning how the event aimed to contribute to high-tech entrepreneurship in Iran. The idea behind iBridge initiated in 2014 as a joint effort by Iranians involved in high-tech entrepreneurship in the United States, with the aim of serving as a “bridge between Iranians inside Iran and the Iranian diaspora as well as with the tech industry in the West”.

The event sought to bring together young Iranians running technology-based startups with managerial mentors as well as potential business partners across borders.

In a developing economy like that of Iran, the importance of high-tech entrepreneurship and the unique opportunities it creates cannot be overstated. Iran’s Internet and mobile phone penetration rates are among the highest in the Middle East. According to Internet World Stats, Iran has more than 46 million Internet users, which makes a 57.2% penetration rate.

On the other hand, unemployment has constantly been a major issue and the largely state-owned economy can do little to mitigate the problem. Almost 75 % of the country’s 80 million population is under 35. While state-owned organizations are facing excess supply in the labor market, many Iranians wish to start their own businesses.

In the past few years, young tech-savvy Iranians did so by establishing their Internet-based startups, and their success stories could encourage more entrepreneurial activity. They enjoy “first-mover advantages” in an untapped market where competition is still not as fierce as it is in developed economies. The Iranian flourishing startup scene is definitely an attractive area for foreign investment and that seems to be what organizers of iBridge and the like have in mind when planning their activities.

The second important aspect of iBridge conference is its broader implications in the current social and political arena. Iran is still suffering from western sanctions related to its nuclear program and the outcome of diplomatic negotiations is still uncertain. However, recent developments have given rise to hopes that a final deal and lifting of sanctions are within reach.

Efforts like iBridge Berlin illustrate the advantages of a final deal and political rapprochement for both Iranian and western businesses. It’s not only the Iranian economy that has suffered from the sanctions, as many European businesses have reported loss of profits after having had to leave the Iranian market.

Mohammad Saleh Farazi is a PhD researcher in Business Administration at Pablo de Olavide University, Spain