TEHRAN –The significant and fast-paced growth in the number of knowledge-based companies with over 200 percent increase in their number just over the past year (March 2023 – March 2024), shows the solid foundation, dynamism, and growth of the country in innovation and technology and the productive atmosphere which have been made available in line with the goal of boosting domestic production with public participation.

The current administration underscores the quantitative and qualitative development of knowledge-based companies. The number of companies, which was around 5,000 before the current administration took office in August 2021, has now reached 10,000 with a total value of two billion dollars.

Emergence of knowledge-based companies 

The law on supporting knowledge-based companies and institutions, and commercializing innovations and inventions, was approved by the parliament in Iranian year 1389 (2010 -2011), to achieve a knowledge-based economy.

Throughout these years, administrations have tried to boost infrastructure to support knowledge-based companies' growth.   

These efforts have accelerated recently, especially in the current administration. At the beginning of the administration of President Ebrahim Raisi, there were about 6,474 knowledge-based companies in the country, but in less than two years, their numbers soared and reached 9,215 companies, a testimony of the government's approach to boosting local production in the knowledge-based and private sectors.

Meanwhile, the quantitative development of knowledge-based companies has led to an increase in their employment by 8.4 folds, with more than 420,000 individuals currently working in knowledge-based related jobs.

Knowledge-based companies' products from 1399 (2020-2021) to 1401 (2022-2023) increased by about 100 percent reaching $1,132 million from $296 million. The knowledge-based companies' imports also increased by 50 percent from $1,633 million to $3,855 million.

Innovative companies with a share of about 20 percent of all knowledge-based companies, account for  67 percent of income and more than 75 percent of exports and imports. However, technology companies with a share of less than 7 percent have about 30 percent of revenue and over 20 percent of knowledge-based foreign trade.

Materials and products based on chemical technology have the largest share of exports, at least 50 percent, and this ratio has increased yearly. Machinery, electricity, electronics, and pharmaceutical technologies rank next respectively. Advanced chemicals is the only technology area that has a positive trade balance.

Meanwhile, the export of knowledge-based products has increased by 13 percent, while the import has decreased by 10 percent signifying the increase in the volume of knowledge-based exports.

Exports' destinations

According to statistics, 80 percent of knowledge-based products target Asian countries, and about 90 percent of knowledge-based companies' imports are from Asian countries.

Around 36 percent of imports and 22 percent of exports are related to the United Arab Emirates to be re-exported to other destinations.

Accessing new markets is a newly adopted strategy, that is, deepening trade ties with countries, like Africa, that the country has failed to note before.

Lack of knowledge and sufficient information about a region makes one assume there is no market or that it would be impossible to do business there.

Assessing African countries' market capacities, it was found that there are potential opportunities for market entry and expanding ties. What matters is earning foreign currency revenue not where it comes from, it can be an advanced European country or an African country.

4.5-fold increase in loans

Currently, the average annual payment of loans to knowledge-based companies is 66 trillion rials (some $132 million) which has grown by 4.5 times compared to the figure in the previous administration.

The guarantee sector, which is required by knowledge-based companies, has had a 7.5-fold growth, and the empowerment sector, which includes grants and participation in exhibitions and the development of the companies' markets, has experienced an eight-fold growth.

Supporting  overseas Iranian  experts

The Vice Presidency for Science and Technology provides financial and infrastructure support, via the “Connect” project and platform, for experts abroad who intend to establish a knowledge-based company in Iran.

The purpose of “Connect”  is to design a system for cooperation with Iranian experts abroad, and provide facilities for elites who return to the country. Based on this project, elites and graduates who have already established a company abroad or made a product and want to produce a similar product in Iran or establish a knowledge-based company in Iran will receive technological support.

"Connect" provides the opportunity for implementing post-doctoral projects, conducting research, inviting professors, delivering specialized lectures, holding workshops, establishing start-ups, and working in technological companies instead of military service.

Researchers, experts, and international entrepreneurs registered on the platform can benefit from a 3–10-year residence permit in the country.

More than 8,700 Iranian experts and researchers living abroad have so far applied to join the platform and over 6,500 successful scientific collaborations have taken place.

Many of the applicants are graduates of the world's top universities such as MIT, Stanford, Cambridge, Harvard, Berkeley, Illinois, Sydney, Melbourne, Princeton, Michigan, National University of Singapore, and EPFL Switzerland.

100% growth forecast in capital market

It seems that knowledge-based companies have progressed well. However, with continuously increasing support knowledge-based companies will have a brighter future.

The high number of knowledge-based companies active in the capital market proves they have fully grown.  Currently, there are 108 companies in the capital market, which is anticipated to grow by 100 percent by the end of the current year, March 2025.

exports at $2.5 billion

Iran’s knowledge-based companies exported over 3.6 million tons of products, valued at $2.506 billion, in the previous Iranian calendar year (ended March 19, 2024), according to the Islamic Republic of Iran Customs Administration (IRICA).

Based on the IRICA data, some 1.158 million tons of goods, valued at $5.141 billion were also imported by knowledge-based companies into the country from March 21, 2023, to March 19, 2024.

About 85 percent of the goods imported by the knowledge-based companies came from China, the United Arab Emirates (UAE), Turkey, Germany, and India, IRNA reported.

The domestic knowledge-based companies exported their products to China, Iraq, the UAE, Turkey, and Russia in this period, IRICA said.

In this period, the knowledge-based companies accounted for 2.6 and 5 percent of the country’s total exports in weight and value respectively.

Advanced materials and products based on chemical technologies accounted for about 80 percent of the export value of these companies.

 China was Iran's first buyer of knowledge-based products in this period.

MT/MG