The share of tech firms in Iran’s GDP has been increasing exponentially and is expected to hit 10% in the coming years, an official with Iran’s National Innovation Fund said.
Mohammad Sadeq Khayyatian added that the government must continue to support startups, accelerators and innovation centers to increase this contribution, INIF’s website reported.
“Iran’s technology ecosystem is growing fast and so will its share in GDP. In the 2000s, there were only 52 knowledge-based companies in Iran, which figure today stands at 5,700. For that matter, 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 noted that the policies have been changed, such that Iran is increasingly counting on the 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.
The official noted that the revenues of Iranian tech firms and knowledge-based companies have exceeded 1.2 quadrillion rials ($4.67 billion) in the first 10 months of the current fiscal year (started March 20, 2020).
“The figure observed a year-on-year rise of 40%. The companies’ annual revenue is expected to surpass 1.5 quadrillion rials [$5.83 billion],” he said.
“Surveys have shown that out of 5,700 knowledge-based companies in Iran, 1,418 are working on information and communications technologies, 1,267 on machinery and equipment, and 1,111 on electric and electronic products.”
Khayyatian noted that work is on track to navigate the ecosystem towards international tech trends, including artificial intelligence, big data, internet of things and gene therapy.
Export Promotion
Tech experts and officials believe more 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, loans for foreign customers and other services to expand their export market.
“Offering grants worth 800 million rials [$3,100] 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 were established in China, Azerbaijan, India, Iraq and Kirgizstan last year, which turned out to have high capacity for introducing Iranian high-tech products to the target market.
“After opening a tech hub in Kenya in late January, officials are holding talks to open similar centers in Afghanistan, Qatar and Oman,” he added.
Malekifar said export centers provide tech firms with shared working space, the opportunity to employ local professionals for marketing, promoting their products in small-scale exhibitions, market analysis and sale consultancy, in addition to deploying commercial teams to introduce the firms and attract customers.
Government Loans
Government officials never miss an opportunity to name the startup ecosystem as Iran’s major business of future, which would help curb the country’s reliance on the sale of natural resources.
They say fiscal support to tech companies will continue for converting the conventional domestic economy to a knowledge-based one.
The government is regularly offering loans to startups and tech firms to support the sector. Iranian knowledge-based companies and tech firms received 191 trillion rials ($743.19 million) in loans during the first nine months of the current Iranian year, the Central Bank of Iran said.
Based on a recent CBI report, the amount has increased by 128% compared with the same period of last year.
CBI Governor Abdolnasser Hemmati had earlier said Iran has over 10,000 startups and knowledge-based companies, and if they receive sufficient support and attention, they will yield valuable results.
Hemmati stressed that state support for the tech units will continue to ensure their constant growth.
“The technology ecosystem is on its way to flourish further and will soon claim a large share of the domestic economy,” he said.
NDFI Resources
In mid-December 2020, the Vice Presidential Office for Science and Technology said it gave 18 trillion rials ($70 million) in cheap loans to 166 knowledge-based companies from the resources of the National Development Fund of Iran.
Based on a decree issued by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, the office is authorized to tap into the sovereign wealth fund to support knowledge-based companies.
Vice President for Science and Technology Sorena Sattari said the loans were taken by companies operating in the agricultural, industrial and mining sectors of rural areas.
“Thanks to the assistance, the companies have made noteworthy progress and grown,” he said without elaboration.
Sattari said the tech ecosystem has high potential for supporting the economy and transforming it into a “smart economy”, albeit with effective government backing.
Besides state support, private companies are also funding startups and tech firms.
“Venture capital funds are growing in Iran and becoming popular with investors. This should help underpin the work of startups and help them grow,” he added.
Sattari noted that nine venture capital funds are now active and the number is expected to grow.
