Knowledge-Based Firms to Expand Overseas

EghtesadOnline: Aiming to curb Iran’s overreliance on oil revenues and increase the share of knowledge-based firms in the national economy, President Hassan Rouhani’s government has established centers which are dedicated to promoting such companies and paving the way for them toward a stronger presence in foreign markets.

News ID: ۷۴۵۸۶۶

13 August 2018

Vice President for Science and Technology Sorena Sattari says they have activated more than 50 centers across the country to aid knowledge-based firms’ expansion both at home and abroad, IRNA reported.

During his one-day trip to Markazi Province, southwest of Tehran, and its capital Arak on Tuesday, Sattari said the government has been investing heavily to boost the export of knowledge-based companies’ products.

The centers, titled Tech-Export Services Corridor (TESC), aim to facilitate the export process by offering marketing and consultancy services and initiating dialogue between Iranian and foreign companies, Financial Tribune reported.

The vice presidential office is making use of the Export Readiness Assessment (ERA) system, to choose which companies to support. ERA is designed to determine a company’s strengths and opportunities when approaching the decision to actively seek international business opportunities.

The assessment will gauge a company’s readiness to sell goods overseas based on four criteria: export resources, marketing methods, management commitment and product potential.

Growing Field

Sattari cited concrete numbers which validate the claim that Iran’s transition from an oil-based economy to a knowledge-based one is making headway.

The official says there are currently 3,700 knowledge-based companies operating across the country, 70% of which are newly founded.

He added, “Last year, these companies generated 600 trillion rials ($14.28 billion) in revenue.”

During Rouhani’s tenure as president, which started in 2013, Arak’s knowledge-based firms have increased from a mere three to a noteworthy 76, which according to Sattari is a sign the province is developing in both academic and economic sectors. In recent years, the University of Arak has also been able to improve its role in Iran’s academic arena playing a more significant role.

Sattari is firm in his decision to support these companies’ global expansion.

Startups

The vice president also took the time to discuss the startup ecosystem in Iran and dispel the common misconception regarding the funding of these nascent companies.

According to the official, since startups normally do not generate income in their first few years of inception, they cannot and must not be funded via loans, but they need to attract investment from venture capitalists.

Following a significant boom in Iran startup ecosystem, in an effort to support such companies, the government started granting them loans. In recent years they have adopted a more pragmatic approach and are encouraging venture capitalists to invest in the fledgling businesses.

In order to further support startups, the ICT Ministry has drafted a bill which calls for tax exemption and insurance coverage at lower rates for a window of three to five years for newly established startups.

The bill has been already approved by the Economy Ministry and is awaiting approval by the Cabinet.

Sattari says Iran’s economic culture is changing, adding, “The culture of using and supporting startups have turned into a trend, and the people have incorporated it into their daily routines.”

While the government is determined to support the new businesses, certain startups say all they ask for is for the administration not to interfere with their activities and impede their progress.