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How Iran’s Startup Sector Can Realize its Potential

How Iran’s Startup Sector Can Realize its PotentialExperts agree that the promotion of knowledge-based startups would be a suitable remedy to address the intensifying unemployment in Iran. In fact, with youth unemployment at 27.5%, the Iranian authorities need to look for opportunities to create

By Bijan Khajehpour

Experts agree that the promotion of knowledge-based startups would be a suitable remedy to address the intensifying unemployment in Iran. In fact, with youth unemployment at 27.5%, the Iranian authorities need to look for opportunities to create jobs for the country’s young, educated and tech-savvy population.While in recent years a considerable growth has been recorded in information technology (IT) startups and related investments, the actual level of activity is well below the potential that this sector offers.

To be fair to the Iranian authorities, much has been done in the past few years in order to address the more technical issues faced by IT startups.Higher educational realities have always offered good opportunities in technical fields and in recent years they have been further expanded to address the needs of knowledge-based enterprises.Furthermore, most reputable public universities have engaged in creating incubators and accelerators to promote the establishment of startups.This endeavor has been complemented by private sector initiatives and through various events and programs, both official and business sector entities have tried to create a space for greater interaction between the main stakeholders, i.e., young entrepreneurs, municipal and national officials and potential investors. Nonetheless, shortcomings remain and a failure to address them will undermine the country’s potential in this sector.

An analytical approach to the challenges faced by startups shows that some are general and related to the business and political culture in the country, but some are specific to the field of IT and new technologies.

The first general burden for any new enterprise in Iran remains the country’s business climate.Partly caused by external sanctions, but mainly a consequence of the security driven approach to any business activity, the current rules and regulations for starting an enterprise are a key impediment. Reza Jamili, an official at the Iran Chamber of Commerce, Industries, Mining and Agriculture lists the challenges faced by Iranian startups as follows: Distrust from the traditional business community, officials viewing startups within security parameters, an inefficient and ignorant bureaucracy, filtering of the internet and legal ambiguities.To address these impediments, Jamili suggests to promote the establishment of professional guilds that could support IT startups in the process. However, such an undertaking would also face political hurdles in a country where the government and other state-reliant networks try to control all affairs including professional guilds. One of the most inhibiting factors is the government’s insistence on issuing "licenses” for all business activities.Licenses and the need to extend them regularly have become a stick that the government holds over businesses to control their activities.

(www.al-monitor.com)

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