ICT Role in Iran Economy Expanding

EghtesadOnline: The information and communication technologies sector in Iran is, and expected to remain, one of the largest employers in the country. ICT is not only one of the fastest growing industries, but it is also an important enabler of innovation and development.

News ID: ۷۴۲۹۹۰

25 July 2017

With the aim of getting an overview of the Iranian ICT sector and its role in the country’s economic development, Financial Tribune conducted an exclusive interview with Asghar Masaheb, an official with the Ministry of Industries, Mining and Trade, at the 23rd International Exhibition of Electronics, Computer and E-Commerce (aka Elecomp 2017) held by the Iranian ICT Guild Organization at Tehran’s International Permanent Fairgrounds. The exhibition opened on July 21 and concluded on July 24.

Masaheb said that due to its unique nature, the ICT sector can revolutionize employment trends.

“Currently, ICT comprises a remarkable 10.3% share in the total number of employed throughout the country. This is while the figure stood at 0.8% at the beginning of the Fifth Five-Year Development Plan (March 2011-16). Since job creation in the field of information technology depends more on knowledge capital and needs less money resources, planning to use the country’s human assets in creating job opportunities in this area can be greatly effective, an example of which is evident in the technical and engineering services sector,” Financial Tribune quoted him as saying.

He further said ICT presently has a 2.1% share in Iran’s GDP and the share is projected to reach 8% as per the Sixth Five-Year Development Plan (2017-22). In addition, the share of this sector in the value added of the country’s economy stands at 2.12%, including 1.58% for communications technology and 0.54% for information technology.

Citing Nassrollah Jahangard, the head of ICT Organization, Masaheb said the highest rate of growth among nine economic sectors in Iran during the five development plans belongs to ICT and stands at 20%.

The five-year development plans are medium-term roadmaps designed by the government to help achieve sustainable growth, the strategies for which are outlined in its budget for the plan period.

Iran started drafting its development plans after the end of the Iran-Iraq war in 1988 with the first one starting in 1989.

Iran is ranked 89th in the 2016 ICT Development Index with a score of 4.99, up by 1 rank compared to the 2015 ranking.

The IDI is an index published by the United Nations International Telecommunications Union based on internationally agreed ICT indicators. It is a unique benchmark of the level of ICT development across the world. The IDI combines 11 indicators on ICT access, use and skills, capturing key aspects of ICT development in one measure that allows for comparisons across countries and over time.

Integral Part of Every Business

Today information technology has become a vital and integral part of every business plan. From multinational corporations that maintain mainframe systems and databases to small businesses that own a single computer, IT plays a role.

It seems Iranian business managers are now more aware than ever of the impact and necessity of exploiting information and communications technologies in their businesses to grow and succeed.

“Managers are increasingly taking advantage of software technologies in their businesses to ease processes. Investors look for tools for management and decision-making even prior to starting their businesses, which indicates that managers believe that such technologies are now indispensable to business progress,” deputy managing director of Nomatec Company, Mohammad Shams, told Financial Tribune at Elecomp 2017.

Nomatec, a prominent software company in Tehran, offers software solutions, including but not limited to enterprise resource planning, to small-, medium- and large-sized enterprises, and helps them develop their businesses.

ERP is a business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources.

Shams also noted that more and more investors are being drawn to the field of information and communications technologies these days.

Referring to the benefits of using IT tools in companies, Reza Shirazi-Mofrad, the managing director of Web24 Company, specialized in assisting businesses by offering services in digital marketing, web and application design and search engine optimization, said IT tools can greatly reduce the marketing costs for companies as they provide companies with opportunities to easily present products to customers without the involvement of any middlemen, leading to more profit compared to the traditional trend of sales.

The managing director noted that Web24 currently covers 650 active businesses and the number of their customers is on the rise in recent years, as more companies turn to IT for finding business solutions.

“IT has great job creation potential, especially for young Iranians, because all one needs to enter this field is knowledge and just a single computer,” he said.

According to Shirazi-Mofrad, the level of IT knowledge and expertise of Iranian experts is above global average.

Emergence of New Services, Industries

In the present age, technology is playing a very effective role in increasing the rate of economic growth, such that countries consider it as the basic tool of economic development.

International exhibitions like Elecomp can play an important role in this regard, as technology players can showcase their latest achievements in related fields to attract investors or start new businesses. The emergence of new technology services leads to the emergence of new industries and new industries mean more economic activities, which indicate the undeniable influence of IT on economy.

Elecomp welcomes international firms from all over the world. Such an event can be highly beneficial to Iran’s economy, helping domestic companies while drawing foreign eyes onto the Iranian IT market.

“There are millions of small- and medium-sized companies out there. That’s why exhibitions like Elecomp and CEBIT in Hanover exist just to show the people how they can implement IT tools to have better business,” Martina Lubon, the international and partner sales director of CEBIT, said at the exhibition.

CeBIT is the largest and most internationally represented computer expo. The trade fair is held each year on the Hanover fairground, the world’s largest fairground. Organized by Deutsche Messe AG, it is considered a barometer of current trends and a measure of the state of the art in information technology.

In the previous round of Elecomp, more than 360 domestic and 86 foreign businesses from 18 countries participated and 250 local startups showcased their services, while a total of 800 local and international companies showcased their achievements and products in the latest event.