Tech Chief Says Economic Direction Must Change

EghtesadOnline: In a dormant economy where the educated see little or no hope for their future, helping startups seems to be a logical way to motivate them to forsake dreams of migration and if possible reverse the brain drain Iran has been grappling with for decades.

News ID: ۷۴۴۵۸۴

20 December 2017

Many qualified and skilled Iranians who go abroad for higher studies are not interested in coming back due to the dismal job prospects  and the rising unemployment rates (officially 11.7%). As a result, most prefer not to return and look for work in other countries, namely in the western world.

Iran’s vice president for science and technology, Sorena Sattari, is of the opinion that “the economy must be remade to meet the needs of modern day life,” so as to give the young and talented hope and provide them with better living standards.

His website quotes him as saying that “The modern economy is intertwined with startup culture, and to help the startups prosper we need a comprehensive overhaul of the education system. Indeed, there is a crucial need for overhauling the government’s support policies.”

According to Financial Tribune, Sattari is of the opinion that nurturing startup culture and development of knowledge-based companies can help create jobs for university graduates and reverse the brain drain.

Currently an estimated 4.7 million Iranians study in local universities and 74,000 in foreign higher education institutions. “Unlike the developed and even developing countries, Iranian universities make no significant contribution to the economy,” Sattari said, and urged policymakers to take action to set things right.

He reiterated that the role of universities and the government in supporting startups is in urgent need of revision.

Echoing the views of respected experts, academia and observers, Sattari said  universities should be encouraged to establish their own sources of revenue.

“Sharif University of Technology is gradually moving toward economic self-reliance and generating wealth. Other centers of higher education should do likewise.”

Sharif has made significant moves in the ICT sector. Hundreds of startups are currently supported by the university’s incubators and accelerators.

Government Support

Knowledge-based companies and startups are among President Hassan Rouhani’s pet projects and are seen, understandably, as a policy to curb the risky overreliance on oil export earnings.

Sattari said to help the sector, government should take proper actions to “create infrastructures and get rid of cumbersome regulations instead of just handing out money in the name of financial support.”

The head of the Telecoms Ministry’s Innovation Center,  Hamidreza Ahmadian, is also of the opinion that such ‘support’ can have adverse results.

“Loan is not what startups need. Giving money to novices without providing proper education and support will hinder not help,” he says.

Another hurdle in the way to the growth of startups is the bloated government bureaucracy. Market observers and business insiders frequently have routinely called for deregulation saying that the government should support startups by removing unwanted and unnecessary regulations and help train newcomers, not just inject money into a handful of businesses.

Even senior officials acknowledge that the overbearing regulations have hindered the sector. Telecoms Minister Mohammad Javad Azari Jahromi says, “To enable decent levels of growth, government oversight should be reduced.”

Drawing parallels, he says, “In a place like Germany, in a few hours a business gets registered and starts operating. A similar procedure in our country takes over three months!”