2022-01-18-UNDP-Mapping_of_the_Existing_Innovation_Ecosystem_in_the_I.R._of_Iran_17页_3mb

Summary of "Mapping of the Existing Innovation Ecosystem in the I.R. of Iran"

Core Content

This report, prepared by UNDP Iran, provides a comprehensive analysis of the innovation ecosystem in Iran, focusing on the development of startups, government support, digital infrastructure, and the impact of sanctions. It aims to support data-driven decision-making for UNDP's interventions in the innovation sector.

Main Points

• Innovation Ecosystem Components: The report outlines the essential components of an innovation ecosystem, including investment, networking, training, and supporters. These elements are crucial for the creation, growth, and development of startups.

• Support Structures: Various support centers, such as incubators, accelerators, science and technology parks (STPs), and innovation centers, play a key role in nurturing startups. These structures are often affiliated with universities, government bodies, and private entities.

• Government Initiatives: The Iranian government has implemented several policies and financial instruments to support innovation, including the "Knowledge-Based Firms" plan and the Iran National Innovation Fund (INIF). These initiatives have helped in the growth of startups and the establishment of innovation infrastructure.

• Sanctions Impact: The imposition of sanctions, particularly after the US withdrawal from the JCPOA in 2018, has had a dual effect. While it created challenges in accessing international technology and investment, it also spurred the development of localized solutions and increased self-reliance among Iranian startups.

• Digital Economy Growth: The digital economy in Iran has shown steady growth, with the share of digital economy in GDP increasing from 3.8% in 2016 to 6.9% in 2020. The e-commerce sector has also seen significant expansion, with online purchases reaching USD 42 billion in 2020.

• Startup Ecosystem Development: The Iranian startup ecosystem has evolved through three waves. The first wave started in 2012, the second in 2016, and the third began in 2018. Despite challenges, the ecosystem has continued to grow, with over 1,600 startups registered by 2021.

Key Information

Internet and Smartphone Penetration

• Internet subscribers in 2020: 70.6 million (84% penetration rate)
• Smartphone penetration rate in 2020: 69% (58.2 million users)

Global Rankings

• Network Readiness Index (NRI): Ranked 79th out of 130 countries in 2021, up from 92nd in 2016
• Global Innovation Index (GII): Ranked 60th out of 132 economies in 2021, second in Central and Southern Asia
• Global Entrepreneurship Index (GEI): Ranked 64th in 2019, showing a stable upward trend since 2015

Digital Economy and E-Commerce

• Digital economy share of GDP increased from 3.8% in 2016 to 6.9% in 2020
• E-commerce transactions in 2020: USD 42 billion (34% of country's liquidity)
• E-commerce units in Iran: Estimated at 350,000
• e-Namad license: Required for e-commerce in Iran; only 24% of applicants were accepted in 2021

Startup Demographics

• Founders' Age: 62% of founders are aged 25–35
• Education Level: 40.6% have a Master's Degree; 92% have a university degree; 12% have a Ph.D.
• Gender Distribution: Only 10% of founders are female

Startup Growth Stage

• 40% in growth and revenue generation stage
• 14% in MVP development stage
• 3.5% in mature or after-growth stage
• 8% of startups are less than 3 months old

Financing Sources

• Founders' personal resources are the most common
• Venture capital (VC) is the second most common
• Other sources include donations, equity crowdfunding, government support, and bank loans

Challenges Faced by Startups

• Rules and regulations are the most significant challenge
• Raising funds and governmental policies are also major obstacles
• Only 25% of startups received government support

Startup Support Centers

• Science and Technology Parks (STPs): 49 across the country; 12 in Tehran
• Venture Capital (VC) Firms: 85 in total; 61 are Research and Technology Funds (RTFs)
• Co-working Spaces: 56 independent spaces
• Incubators: 240 in total; 61% affiliated with STPs, 25% with universities
• Accelerators and Innovation Centers: 162 in total; 69% are specialized

Sanctions and Local Innovation

• Sanctions led to reduced foreign investment and access to international technology
• Encouraged the creation of local alternatives and localized versions of international platforms
• Increased the role of domestic players and self-sufficiency in the tech sector

Conclusion

The Iranian innovation ecosystem has shown significant development, particularly in the digital and e-commerce sectors. Despite challenges posed by sanctions, the ecosystem has adapted and grown through localized solutions and increased government support. The report highlights the potential for UNDP to contribute to the ecosystem through targeted interventions, leveraging the existing structures and addressing the challenges faced by startups.