TEHRAN – Iran has developed plans to support and empower knowledge-based companies as a step forward to materialize the goal of a surge in production, as the economy is grappling with the coronavirus predicament.

Leader of the Islamic Revolution Ayatollah Ali Khamenei has named the current Iranian calendar year, 1399, as the ‘Year of Surge in Production', aiming to create a tangible change in people's lives.

A total budget of 63 trillion rials (nearly $1.5 billion at the official rate of 42,000 rials) is proposed to be allocated to support the knowledge-based companies leaping for production, Rouhollah Zolfaghari, deputy head of the Innovation and Prosperity Fund said.

“Last year, our performance in the implementation of innovative projects was 10 times more than last year,” he said, adding, “over the previous year, some 13 trillion rials (about $309 million) provided to knowledge-based companies, besides, various loans amounting to 25 trillion rials (around $595 million).”

Some of the activities had instant results last year, and companies were able to play a good role in the country, while some of them will come up with good results in the coming year, and a significant rise in production will appear, he explained.

Despite the work done last year, in the coming year, detailed plans have been prepared to support knowledge-based companies, through which 45 trillion rials (about $1 billion) in the form of loans will be considered for the production.

This year, the Fund will also invest some 3 trillion rials (about $71 million) in sectors at risk and we will be able to manufacture new products along with minimizing the investment risks through insurance coverage, he stated.

Also, a total budget of 600 billion rials (nearly $14 million) in the form of non-repayable loans has been earmarked so that the companies can commercialize their products, and if they are in the research and development phase, proceeds in collaboration with universities, scientific and research centers, he added.

He went on to state that more than 15 trillion rials (nearly $358 million) have been allotted for the issuance of guarantees for knowledge-based companies, which will lead to the conclusion of contracts with state-run centers, agencies, and large industries, adding, this part will play a significant role in the production next year.

$48m earmarked to support firms in fight against COVID-19

Elsewhere in his remarks, Zolfaghari said that since the onset of coronavirus outbreak in the country, the Innovation and Prosperity Fund has approved 5 trillion rials (around $120 million) for the production of anti-corona products, which has been able to so far provide 2 trillion rials (around $48 million).

This amount was paid to manufacturers of sanitary ware, disinfectants, medical and pharmaceutical equipment, and even companies that were affected by the outbreak of coronavirus in the country, he highlighted.

The Fund has sent requests to receive more financial assistance to support knowledge-based companies operating to combat the epidemic, he noted.

He went on to say that these facilities are either for knowledge-based companies whose businesses are damaged during the coronavirus crisis or for those manufacturing disinfectants, medicine, masks, COVID-19 diagnostic kits or software capable of detecting the virus.

At the beginning of the outbreak, a call was issued in which about 500 projects were sent to the Innovation and Prosperity Fund, he said, highlighting, some of the selected projects are currently running.

“Of course, we are still on negotiations with companies and are reviewing their plans to combat the pandemic,” he concluded.

Vice Presidency for Science and Technology unveiled the first production line of serology-based tests for COVID-19 on Saturday, which is producing 400,000 test kits monthly and is expected to reach up to 2 million, being produced by knowledge-based companies.

Serology testing for coronavirus better quantifies the number of infected cases, including those that may be asymptomatic or have recovered. Serology tests are blood-based tests that can be used to identify whether people have been exposed to a particular pathogen by looking at their immune response.

Major step toward surge in production 

Regarding the unexpected events that inevitably happen in the world much like the coronavirus epidemic, all the countries may be better to focus on the private sector and empower knowledge-based companies to easier survive.

To tackle the ups and downs of economic growth, it is time for Iran to highlight the role of the private sector and definitely the production process.

currently, there are some 5,000 knowledge-based companies and 4.5 million students at different academic levels and graduates that are potentially talented to help cure the economy and pace up economic growth. However, it requires the focus of government officials and policymakers.

Production jumps happen when the three main aspects of government, educational system, and youth are functioning accurately; eliminating bureaucracy, smuggling, creating transparency and emphasizing innovation, focusing on the empowerment of knowledge-based companies are some of the issues that can pave the way for a surge in production. 

Knowledge-based companies must be supported to improve the quality of goods to reach international markets.

Although the plan should be completely implemented to determine its effectiveness, supporting the private sector is a way of economic growth which has been considered by many countries around the world years ago, and it seems to be a good step toward economic growth.

FB/MG