Iran’s vice president for science and technology is of the opinion that local startups can help develop and transform the local industries saddled with low productivity, depleted machinery, poor management and the inability to compete in global markets.
“We must accept our mistakes and learn from our failures. We need to redefine our approach towards economy and industry. The economy must be reconstructed with innovation and science as its key pillars ,” Sorena Sattari said on his website.
“Startups and knowledge-based firms can deliver the renovation and the knowhow industries need,” he added. However, the process should be regarded as a two-way road and “companies should also invest in startups.”
According to Financial Tribune, startups are playing a key role in bringing innovation faster and cheaper into the markets across continents. For instance, in order to make use of the growing sector major carmakers like GM, BMW and Volvo have launched startup incubators, signed deals with such firms and are investing in them.
Drawing parallels with leading automotive companies, Sattari singled out local carmakers and said they should establish close ties with startups. “This would enable them find new and better ways to meet market demand.”
He encouraged automotive companies to increase their R&D investment. The car industry in Iran is the second biggest after oil and gas.
Sattari is not alone in calling on carmakers to embrace the need and significance of R&D. last October the Ministry of Industries issued a mandate that requires local carmakers to invest 1.5% of their total revenue in R&D. As per available data, local automakers invest 0.5% of their income in research and development.
The ratio of R&D spending to GDP in Iran stands at 0.4%. According to UNESCO, the Iranian government provides 89% of the investment and the share of the private sector is 11%.
In recent years, startups have grown in Iran, both in terms of number and variety of services. Catering to the needs of the market, they have also changed it.
The retail sector has been affected by startups. For instance, currently, most Iranian youngsters rely on online shops like Digikala and Bamilo for purchasing goods.
For instance, ride-hailing startups like Snapp and Tap30 have redefined urban transportation. The services offered by the companies are much closer at hand and cheaper compared to traditional taxi services. This pushed Tehran Taxi organization to launch its own ride-hailing service.
Another example is Internet-based delivery services like AloPeyk which have changed parcel delivery services so profoundly that the state-owned Iran Post Company has announced plans to follow their example and launch similar services.
The same applies to the global arena. Startups like Uber and Amazon have changed business and market profoundly and in the process evolved into multinational conglomerates.