SMEs Exports Rise to $1.7b

EghtesadOnline: Small- and medium-sized businesses, affiliated with Iran Small Industries and Industrial Parks Organization, exported $1.74 billion worth of goods during the first half of the current Iranian year (March 20-Sept. 21) to register a 16.7% growth compared with the similar period of last year.

News ID: ۷۵۱۱۹۷

06 October 2020

Asghar Masaheb, the deputy head of ISIPO, told IRNA that the main export destination of these SMEs was Pakistan with around $1 billion, followed by Iraq with $364 million, Afghanistan with $83 million, the UAE with $50 million, Turkey with $36 million, Azerbaijan with $26 million, Armenia with $25 million and India with $20 million.

“The main exported goods were foodstuff, 20-liter steel containers, plastic products and chemicals that prevent gas hydrate formation,” he added.

Masaheb noted that 430 SMEs across the country exported their goods during the six-month period.

“Khorasan Razavi with $343.9 million, Tehran with $133.7 million, East Azarbaijan with $123.2 million, Fars with $88.7 million and Yazd with $83.7 million topped the provinces with the highest volume of exports in H1,” he said.

With a total of 500 industrial parks, 322 industrial zones, three special economic zones, 65 specialized industrial and economic zones, six science parks, 37 centers for technological and business services, two telecommunications and software service complexes, 45,912 production units and 3,058 workshops, ISIPO has so far created 935,868 jobs in Iran.

“Small- and medium-sized manufacturers located in Iranian industrial estates exported $2.4 billion worth of goods in the last fiscal year that ended on March 19, 2020, accounting for 5.8% of Iran's total non-oil exports [$41.37 billion],” Deputy Industries Minister Mohsen Salehinia was quoted as saying by ILNA.

He added that 27 industrial estates will be inaugurated in the current Iranian year (March 2020-21), stressing that the share of SMEs in exports is expected to increase.

According to the official, Iran’s industrial estates host 44,892 industrial units, of which 34,814 units (78%) are operational while 10,078 units (22%) are inactive.

Revival of Recession-Hit SMEs

Iran Small Industries and Industrial Parks Organization plans to revive 1,500 inactive small- and medium-sized enterprises in the current fiscal year (March 2020-21).

According to Masaheb, 1,444 SMEs were revived in the last Iranian year (March 2019-20).

More than 767 SMEs located in Iran’s industrial parks and estates were revived since the beginning of the current fiscal year (March 2020), according to ISIPO.

“By reviving these SMEs, more than 13,500 jobs were created or secured,” Masaheb said in an interview with Iran Chamber of Commerce news service.

He explained that the revived units had been either partially or completely shut down due to the lack of working capital, loss of markets, inability to update technology and lack of investment.

ISIPO Definition

Each country has its own definition of what constitutes a small- and medium-sized enterprise.

According to Iran Small Industries and Industrial Parks Organization, enterprises run by 50 workers or less, and 100 workers or less are considered small- and medium-sized enterprises respectively.

In the United States, there is no distinct way to identify small and mid-size enterprises. The European Union offers clearer definitions, characterizing a small-sized enterprise as a company with fewer than 50 employees and a medium-sized enterprise as one with fewer than 250 employees. In addition to small and mid-size companies, there are micro-companies, which employ up to 10 employees.

SMEs' share in Japan’s exports is at 60%, Taiwan’s is at 70% and Singapore’s is at 90%.

Though small in size, SMEs play an important role in the economy. They outnumber large firms, employ vast numbers of people and are generally entrepreneurial in nature, helping to shape innovation.

Small- and medium-sized enterprises constitute 92% of Iran’s 85,000 manufacturing enterprises.

Many people in emerging economies find work in small- and medium-sized enterprises. SMEs contribute roughly 45% of total employment and 33% of GDP in these countries, according to the Organization for Economic Co-operation and Development.