Tech Firms, State Entities Sign 12 Contracts Worth $24 Million

EghtesadOnline: Iranian tech firms signed 12 agreements worth 3.21 trillion rials ($24.3 million) with state institutions during the Second Testa Reverse Exhibition held at Tehran's International Fairground in late December.

News ID: ۷۸۵۱۹۳

01 January 2020

Testa (a Persian acronym meaning "demand for Iran-made products") reverse exhibit, as the name suggests, is a reversal of the traditional trade show format where companies and institutions present their demands while the supplier tech firms walk the floor.

Over 20 large domestic enterprises set up pavilions in the event and representatives of 360 knowledge-based companies and startups, along with numerous tech aficionados, researchers and experts, visited them, Iran National Innovation Fund, a co-organizer of the exhibition, reported.

According to Siavash Malekifar, an INIF deputy, tech firms and startups signed agreements with Iranian Space Agency, Payam and Kish airports, Mahan Airlines, Iran Drug Control Headquarters, Headquarters for Combating the Smuggling of Commodities and Foreign Currency, West Asia Steel Company and Tehran Urban Innovation Center, Financial Tribune reported.

The deals were the result of over 170 B2B meetings between exhibitors and tech-based companies held at the event.

Malekifar said such events can strengthen ties between the technology ecosystem and conventional industries, bolster the move for the realization of a knowledge-based economy and curb the country's reliance on oil revenues.

"The move also helps tech units expand their activities and enter into larger markets," he said.

Extending support to new startups and technology firms has been on the government's agenda since 2013 when President Hassan Rouhani began his first term in office.

INIF, affiliated to the Vice Presidential Office for Science and Technology, and other tech authorities have played a major role in extending vital resources.

The Rouhani administration established the fund with an initial investment of 30 trillion rials ($227 million). As per the law, the government is required to allocate 0.5% of its annual budget to INIF.

The fund’s officials say INIF will continue to give financial support to fledgling tech firms.

Speaking at a meeting with Khorasan Razavi's tech park managers recently, Malekifar said the fund is to offer 10 trillion rials ($75.7 million) as loans to fledgling startups and tech firms in the next Iranian year (starting March 20, 2020).

"The money is to be paid to tech units requiring financial aid to the tune of 5 billion rials [$37,800] through INIF's 38 provincial branches."

Opponents

Officials believe financial facilities can help motivate tech firms to work harder and the government highlights its lending to tech firms as an "attainment".

However, some experts believe offering loans and grants are the worst kind of help that can be offered to them.

Iran E-Commerce Guild Organization is strongly against “cash handouts and loans”, stressing that government-sponsored loans will only divert startups from the path of innovating and standing on their own feet.

Experts at the organization believe that over time, they will get deep in the red and instead of relying on their resources and capabilities, they will seek more and more of the same.

They urge the government to focus on taming the bloated bureaucracy, cut insurance costs and offer tax holidays to startups.

Tech Units in Provinces

Malekifar said the share of Khorasan Razavi Province from the budget will be 710 billion rials ($5.3 million), ISNA reported.

Some 4,000 people in 340 tech units and knowledge-based companies are currently active in the province's tech park.

Mehdi Ghaffari, the director of Golestan Tech Park, said tech-based units in Golestan Province will get 200 billion rials ($1.5 million) from INIF's budget.

“The amount of budget to be allocated to tech units in the park will depend on their level of progress,” he said.

"Teams in idea development stage, companies working on technological prototypes and those about to enter the domestic market will need different amounts of money."

Besides, the park also plans to hold training courses and workshops on marketing and commercialization of products, legal consultancy and know-how to help tech firms forge ties with investors.

Ghaffari said 108 knowledge-based companies and startups are currently active in the park.

The continuing trend of extending loans to tech firms and startups shows neither the Vice Presidential Office for Science and Technology nor the state-affiliated Iran National Innovation Fund care two hoots about concerns aired by the Iran E-Commerce Guild Organization.