Iran Gov’t Invests $225m in Innovation Fund

EghtesadOnline: The Iranian government has agreed to invest 26 trillion rials ($225 million) in Iran National Innovation Fund to support knowledge-based companies and startups.

News ID: ۷۸۴۸۴۲

07 September 2019

INIF invests in startups and knowledge-based companies and acts in line with the Iranian government’s agenda of curbing reliance on oil reliance and boosting digital economy.

During a gathering of tech officials and industrial units in Tehran on Tuesday, Iran's Presidential Chief of Staff Mahmoud Vaezi told ISNA that INIF will help distribute state support among talented tech companies.

“The Iranian economy has been overly reliant on the sale of natural resources like metals and oil. These resources are finite. It would be wise to invest in human resources and tech companies. Younger generations’ innovative ideas and smart solutions can create wealth and boost Iran’s economy,” Financial Tribune quoted him as saying.

The gathering reviewed the activities of Iranian startups and tech firms. For instance, Vaezi said over 520 tech firms in central Isfahan Province have employed 7,000 talented people.

"In the last Iranian year [ended March 2019], 520 companies succeeded in earning 15 trillion rials [$130 million] by offering services in the domestic market and raising their export value to $4.7 million," he added.

Downside

While the Iranian government highlights its financial support for local tech firms as an “achievement”, some experts believe offering loans and grants are the worst kind of help that can be offered to them.

Iran E-Commerce Union is strongly against “cash handouts and loans”, rejecting such a policy as the “worst nightmare for Iran’s startup ecosystem”.

Shayan Shalileh, secretary of the union, says "Government-sponsored loans will divert startups from the right path. Over time, they will get deep in the red and instead of relying on their own resources and capabilities, they will seek more and more of the same."

“Instead of generous financial aid, the government should focus on taming the bloated bureaucracy, cut insurance costs for startups and offer tax holidays,” he added.

The latest report published by the Central Bank of Iran on unpaid loans of knowledge-based companies has revealed startling data, which support Shalileh's arguments and raise concerns among experts.

On its website on Feb. 24, CBI said unpaid loans of knowledge-based companies until Dec. 21, 2018, amounted to a staggering 70.1 trillion rials ($607 million), of which 18% (13.1 trillion rials/$113.4 million) constitute bad debt.

ICT Exhibition in Iraq

Besides such investments, Iranian knowledge-based companies and tech firms are also backed by ICT authorities for attending international tech events.

The Vice Presidential Office for Science and Technology has recently joined INIF in granting financial aid to tech firms willing to participate in the First International Exhibition of Information and Communications Technology slated for October 1to 4 in Karbala, Iraq.

The exhibition will be jointly organized by Iran's ICT Ministry, the Vice Presidential Office and INIF, Mehr News Agency reported.

According to Siavash Malekifar, an official with INIF, 70% of the participants' expenses, amounting to 250 million rials ($2,100), will be borne by the organizers.

Officials believe the event will be an opportunity for ICT companies to launch enterprises or invest in relevant fields in the host country.