Entrepreneurship edited-v2

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Entrepreneurship edited-v2

  1. 1. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 2 Table of Contents EXECUTIVE SUMMARY................................................................................................. 5 CHAPTER ONE- BACKGROUND..................................................................................... 6 1-1 Introduction...................................................................................................... 6 1- 2 Research Question and Necessity.................................................................. 6 1-3 Entrepreneurship Concept and Literature with an Ecosystem Approach.......... 7 1-3-1 Ecosystem Concept .................................................................................. 7 1-3-2 Entrepreneurship Concept ........................................................................ 7 1-3-3 Entrepreneurship Ecosystem Approach and Concept ............................... 8 1-3-4 Entrepreneurship Ecosystem Indices........................................................ 9 1-4 General Portray of Entrepreneurship in Iran .................................................. 10 CHAPTER TWO- ENTREPRENEURSHIP ECOSYSTEM PLAYERS ...................................... 12 2-1 Government................................................................................................... 12 2-1-1 Ministry of Cooperatives, Labor, and Social Welfare ............................... 12 2-1-2 Directorate of Science and Technology of the Presidential Office ........... 14 2-1-3 Ministry of Science, Research and Technology....................................... 16 2-1-4 Ministry of Education............................................................................... 17 2-1-5 Ministry of Jihad and Agriculture ............................................................. 17 2-1-6 Municipality ............................................................................................. 18 2-1-7 University Jihad....................................................................................... 19 2-2 Educational and Research Institutions........................................................... 19 2-2-1 Entrepreneurship Education Centers ...................................................... 19 2-3 The media ..................................................................................................... 21 2-3-1 Tafahom Newspaper............................................................................... 21 2-3-2 Business Weekly..................................................................................... 22 2-3-3 Labor Market Weekly .............................................................................. 22 2-4 Financing Centers ......................................................................................... 22 2-4-1 Interest-free Funds.................................................................................. 22 2-4-2 Financing Companies and Private Venture Capital Investors.................. 22 2-4-3 Governmental Funds............................................................................... 23 2-5 Non-Governmental Organizations.................................................................. 25 2-5-1 Chamber of Commerce........................................................................... 25 2-5-2 Iran Entrepreneurship Association .......................................................... 26 2-5-3 Association of Women Entrepreneurs ..................................................... 26 2-5-4 Women and Youth Entrepreneurship Development Foundation.............. 26 2-5-5 Iranian House of Entrepreneurs .............................................................. 26 2-6 Incubators and Accelerators .......................................................................... 26 2-7 Development Centers and Parks of Science and Technology........................ 27 2-8 Entrepreneurship Festivals and Events.......................................................... 27 2-8-1 Sheikh Bahaei National Festival of Technology Creation ........................ 27 2-8-2 Start-up Weekend in Iran ........................................................................ 28 2-8-3 Sharif Festival of Entrepreneurship and Business Development ............. 28 2-8-4 Hazrat Ali Akbar Festival......................................................................... 28 CHAPTER THREE- ENTREPRENEURSHIP ECOSYSTEM IN FOUR LARGE CITIES ............... 29
  2. 2. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 3 3-1 Mashhad Entrepreneurship Ecosystem Analysis ........................................... 30 3-2 Esfahan Entrepreneurship Ecosystem Analysis............................................. 33 3-3 Ahvaz (Khuzestan) Entrepreneurship Ecosystem Analysis............................ 34 3-4 Shiraz Entrepreneurship Ecosystem Analysis................................................ 37 3-5 Comparison of Entrepreneurship Ecosystem in the Large Cities under Study (Entrepreneurship Ecosystem Challenges of Each City)...................................... 39 CHAPTER FOUR- CHALLENGES.................................................................................. 42 CHAPTER FIVE- CONCLUSION.................................................................................... 44 REFERENCES............................................................................................................ 49
  3. 3. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 4 List of Figures and Tables FIGURE 1-1 COMPLEXITIES AND DEPENDENCIES OF ENTREPRENEURSHIP ECOSYSTEM... 9 TABLE 3-1 MASHHAD ENTREPRENEURSHIP ECOSYSTEM ANALYSIS............................. 31 TABLE 3-2 ESFAHAN ENTREPRENEURSHIP ECOSYSTEM ANALYSIS.............................. 33 TABLE 3-3 AHVAZ ENTREPRENEURSHIP ECOSYSTEM ANALYSIS.................................. 35 TABLE 3-4 SHIRAZ ENTREPRENEURSHIP ECOSYSTEM ANALYSIS................................. 37 TABLE 3-5 COMPARISON OF ENTREPRENEURSHIP ECOSYSTEM IN FOUR LARGE CITIES 40 TABLE 5-1 INDICES AND CHALLENGES OF ENTREPRENEURSHIP IN FOUR LARGE CITIES 44 TABLE 5-2 CODING SYSTEM OF CHALLENGES ............................................................ 48 TABLE 5-3 RANKING OF CHALLENGES BASED ON RESEARCH FINDINGS ...................... 48
  4. 4. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 5 Executive Summary A lot of reports have been published on the global state of Entrepreneurship. Comparing Iran with other countries, and monitoring the descending key entrepreneurship indices in Iran in recent years, clearly demonstrates that all the players in this field need to show more determination to improve the existing state of entrepreneurship in Iran. For this reason, the Iranian Entrepreneurship Association (IEA) conducted a study about the situation of entrepreneurship ecosystem in Iran, taking into account the international successful patterns and the importance of an ecosystem approach to the issue of entrepreneurship. The results of the study may provide a road map for the IEA and other players in the area. The importance of this research is that despite numerous studies conducted in the area of entrepreneurship in Iran, none of them has had an ecosystem approach to entrepreneurship, and none have studied it in detail. IEA has studied the ecosystem players and their roles in four large cities of Mashhad, Esfahan, Shiraz and Ahvaz, and furthermore has identified and prioritized five main challenges by comparing it with Tehran and the overall country. These challenges are: 1) Lack of a coherent communication network between players and entrepreneurs; 2) Almost no success stories about accomplished entrepreneurs; 3) Large number of policy making institutes and organizations; 4) Inefficient entrepreneurship education; and 5) Inability to identify the real entrepreneurs. All the entrepreneurship players are required to try to overcome these challenges through gaining knowledge about their capacities and removing ineffective and repetitive measures. This will become possible by studying the successful patterns in the world and localizing them.
  5. 5. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 6 Chapter one- Background 1-1 Introduction The economic, industrial, social and cultural conditions of Iran call for new and different solutions for solving the problems it faces. The results of research indicate that there is a direct relation between the economic development and number of entrepreneurs in each country. The higher the number of entrepreneurs, the stronger commercial and economic stimulators the country enjoys. In this research, we aim to study entrepreneurship in Iran, with a focus on the ecosystem as a whole. In this approach, the entrepreneurship players and their activities in the subsystems of this ecosystem are studied. In fact, we believe the success of entrepreneurship in Iran depends on a positive interaction among these players, and avoiding parallel efforts among them. In studying the entrepreneurship situation with an ecosystem approach, in addition to analyzing the activities of each of the entrepreneurship players, it is possible to analyze the common and parallel activities, and the intersectional cooperation. This study enables us to easily plan improvement of entrepreneurship situation, and the relation between the related sections in this area and also to promote the efficiency of strategic plans of entrepreneurship development. 1- 2 Research Question and Necessity It is necessary to have a correct analysis of the state of entrepreneurship in the country for the purpose of planning and policy making, and with the objective of entrepreneurship development. In fact, in this study, we look at entrepreneurship with an ecosystem approach, which is made up of different correlated dynamic and live elements. As mentioned earlier, in this approach, in addition to the elements constituting entrepreneurship, the relation between these elements are also taken into account. This research is a pioneer in its kind, whereas despite numerous studies conducted in our country in the area of entrepreneurship, there are a few analyses based on an ecosystem approach. In fact, an ecosystem approach in Iran is generally an innovative approach. Our main questions in this research are as follows: 1- What are the main obstacles for an entrepreneur to enter the market and to develop entrepreneurship? 2- In what ways are these obstacles related to institutional, legal, regulating and policy making mechanisms?
  6. 6. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 7 3- What changes should be done in the ecosystem in order to empower entrepreneurs? 4- What are the policy making areas which should be taken into account to support reforms in the entrepreneurship environment? The main objective of this research is to discover attitudes, beliefs, experiences, obstacles and challenges of entrepreneurship environment and the players of entrepreneurship environment in the Islamic Republic of Iran. 1-3 Entrepreneurship Concept and Literature with an Ecosystem Approach 1-3-1 Ecosystem Concept The word “ecosystem” is derived and composed of two words: “ecologic” and “system”. The word ecosystem was first used by the British Ecologist Arthur Tansley in his published work in the year 1935. When the British Association of Ecologists asked its members in an opinion poll, to provide the most important concepts of ecology, “ecosystem” was a concept which was repeated in the list more than any other. (Cherreett 1989) Ecosystem is a biological community of living organisms (which are connected with the non-living organisms of the environment). Therefore, ecosystem may be defined as a network of interactions between the living things and their environment. All of these elements are correlated through a flow of energy and the cycle of materials. 1-3-2 Entrepreneurship Concept Entrepreneurship may be defined as “commitment to an innovative idea, planning and organizing, taking the risks and attracting capital to create value.” Therefore as defined by Webster Dictionary, an entrepreneur is a person “ who takes the initiative to create a product or establish a business for profit: generally whoever undertakes on his own account an enterprise in which others are employed and risks are taken.” Entrepreneurship is not necessarily an individual venture and may be of an organizational nature. Even large companies, including governmental or private, may become entrepreneurs. “Robert Nashtat” thinks of entrepreneurship as accepting risks, pursuing opportunities, and satisfying needs via innovation and a business. “Peter Druker” thinks of entrepreneurship as a behavior and applying management techniques and concepts, product standardization, and working on the basis of education. It is evident that no comprehensive and broad definition of entrepreneurship has been yet provided, which is accepted by all the specialists of the field. However, the
  7. 7. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 8 theory and definitions of the well-known Austrian economist, Joseph Schumpeter, about entrepreneurship and the role of entrepreneurs in the development process, is more accepted and referred to by the researchers in this field. In his opinion, an entrepreneur is the stimulating factor of economic development and the engine of development, and his role is innovation or creating new compositions from materials. Schumpeter refers to innovation as the main characteristic of an entrepreneur, and defines the job of an entrepreneur as “creative destruction.” In his book “Theory of Economic Development”, he says that dynamic balance is created through innovation and entrepreneurship, and that these are the indicators of a healthy economy. 1-3-3 Entrepreneurship Ecosystem Approach and Concept Just like an ecosystem in nature, entrepreneurship ecosystem is made up of some key parts. In this research we refer to the most comprehensive definition provided by Daniel Isenberg. All these parts are vital and should grow concurrently and on a parallel basis. These parts are listed below alphabetically: 1- Culture of supporting entrepreneurs and accepting failure 2- Customers and markets 3- Entrepreneurs and their venture businesses 4- Financing: investor angels, risk taking investors 5- Legal and regulatory framework 6- Liaisons 7- The media (Social media, publications, newspapers, magazines, weblogs, radio, T.V., etc.) 8- Private sector and providers of professional services such as accountants, auditors, lawyers, etc. 9- Universities and research centers (research and development) 10- Voice of the industry, which includes institutions like chambers of commerce, commercial cooperation, non-government organizations, informal entrepreneurship groups or associations, incubators, accelerators, etc. However, it should be noted that these definitions are general, and may vary in different countries, based on their specific situation and conditions. For instance, the Chamber of Commerce in Iran is a kind of association and is not regarded in the category of industries. Or in some studies, accelerators are considered to be an independent player from incubators. The following figure, developed by Isenberg, shows the complexities and dependencies of entrepreneurship ecosystem:
  8. 8. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 9 Figure 1-1 Complexities and Dependencies of Entrepreneurship Ecosystem Early Customers Networks Labor Educational Institutions -Early adaptors for proof-of-concept -Expertise in productizing -Reference customer -First reviews -Distribution channels -Entrepreneur’s networks -Diaspora networks -Multinational corporations -Skilled and unskilled -Serial entrepreneurs -Later generation family -General degrees (professional and academic) -Specific entrepreneurship training Infrastructures Support professions Non-government institutions Social norms -Telecommunication -Transportation and logistics -Energy -Zone, incubation, clusters -Legal -Accounting Investment bankers -Technical experts, advisors -Entrepreneurship promotion in non- profits -Business plan contests -Conferences -Entrepreneur- friendly associations -Tolerance of risk, mistakes, failure Innovation, creativity, experimentation -Social status of entrepreneur -Wealth creation -Ambition, drive, hunger Financial capital Government Success Stories Leadership -Micro loans -Angel investors, friends and family -Zero-stage venture capital -Venture capital funds -Private equity -Public capital markets -Debt -Institutions e.g. investment, support -Financial support e.g. for R&D, jump start funds -Regulating framework incentives e.g. tax benefits -Venture-friendly legislation e.g. bankruptcy, contract, enforcement, property rights and labor -Visible successes -Wealth generation for founders -International reputation -Uniequivocal support -Social legitimacy -Open door for advance -Entrepreneurship strategy -Urgency, crisis and challenge 1-3-4 Entrepreneurship Ecosystem Indices In order to measure the efficacy of entrepreneurship ecosystem, it is necessary to define and measure indices for its various aspects. There are numerous criteria for the success assessment of entrepreneurship ecosystem, including:  Number of applications for the registration of patents in each year
  9. 9. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 10  Number of entrepreneurs  Number of businesses started per each 100,000 persons of the population  Amount of budget and financial support of research and development (as a percentage of gross domestic production)  Amount of venture capital exchanges  Amount of financial plans supporting the started businesses  Level of stability and trustworthiness of legal frameworks  Law governing intellectual property  Ease of registration and starting up companies  Amount of tax incentives for venture capital investors and new businesses  Number of events related to entrepreneurship  Number of communication networks, in relation to entrepreneurship, formed by using social capital and on a spontaneous and independent basis. Based on this, the definition of entrepreneurship ecosystem has a broader concept than its constituting parts. Moreover, there are other non-linear criteria which play a role in the success of an ecosystem, such as risk acceptance of entrepreneurs, cultural approach in relation to success and failure, acceptance of non-traditional beliefs, and high-risk activities in the society. In addition, there are various institutions in the world, which measure the level of innovation and entrepreneurship in different countries. For example, the Global Entrepreneurship Monitor (GEM), and the Global Entrepreneurship and Development Institute (GED) provide such reports. There are also various research programs in the area of entrepreneurship, like Panel study of Entrepreneurial Dynamics (PSDE) and Babson Entrepreneurship Ecosystems Project, in which there are teams for analyzing the best performances of entrepreneurship and entrepreneurship ecosystem. Some of these reports have also studied Iran. 1-4 General Portray of Entrepreneurship in Iran Based on the results of GEM studies in Iran, during the past five years the entrepreneurial tendencies in Iran has been on an average level, compared to other countries under study. For instance, in 2012, perceived opportunities were 39% and perceived capabilities were 54% in Iran, which were slightly higher than the previous year. However, fear of failure was 40%, which showed a high rise in comparison with the year before, indicating the decline of this index in the country. Consequently the index of entrepreneurial intentions was 22% in 2012, which was 10% lower than 2011. On the other hand, the following indices were almost the same as the year before: high status to successful entrepreneurs with 73%, entrepreneurship as a good career choice with 60% and the media attention for entrepreneurship with 61%. All these results indicate that there is social support of entrepreneurship in the country, but despite the fact that the level of people’s understanding of their potential, both in the area of starting a business and identifying the proper opportunities has
  10. 10. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 11 improved, their fear from entrepreneurship has increased and less people show interest in entrepreneurship, compared to the year before. In accordance with the GEM results, the innovation of new businesses in Iran is 8% which has dropped by 7%, in comparison with the year before. Moreover, Iran’s economy has a lower ranking of innovation, in comparison with the countries with similar conditions. One of the reasons to this is the lack of adequate competency in commercializing innovations. Sometimes, innovations are not able to secure the market, since they are not well commercialized. Therefore, innovative business models for innovation may be of great importance. The international entrepreneurship index in Iran was merely 2%, which was lower than the year before by 5%. Low development of exports might be due to several reasons, such as international sanctions on financial transactions, non-conformity of the products with international standards and consequently failure to compete at international markets, not having a special innovation and upgrading it to the value required by foreign customers, inability to have a knowledge of international markets and penetrating such markets, etc.
  11. 11. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 12 Chapter Two- Entrepreneurship Ecosystem Players In order to have a better understanding of entrepreneurship ecosystem in Iran, it is necessary to come to know the players of this ecosystem. In this section, the major players of entrepreneurship and the roles they play will be studies. These players are: 1- Government 2- Educational and research institutions 3- The media 4- Financing centers 5- Non-government organizations 6- Incubators and accelerators 7- Entrepreneurship festivals and events 2-1 Government The government is one of the most effective players in the development of entrepreneurship, which plays an important role in this area by developing and implementing suitable policies. The government might facilitate or impede entrepreneurship through its laws and regulations, supporting plans, access to specialty and also the dominant culture in the society. The Iranian government started to have a look at the entrepreneurship issue as an economic stimulator and developing its culture from the mid 90’s. In this section, we have portrayed the role that the government and governmental institutions currently play as entrepreneurial players. 2-1-1 Ministry of Cooperatives, Labor, and Social Welfare Ministry of Cooperatives, Labor and Social Welfare is one of the key ministries in the area of job creation, and during the past years, has tried to develop the entrepreneurship environment in the country by measures such as development of the National Occupation Document and establishment of the Directorate of Entrepreneurship. This ministry has a Directorate named “Directorate of Entrepreneurship and Occupation, which includes three offices and one department: Office of Employment Policy Making and Development, Office of Entrepreneurship and Human Resources Efficiency Development, Office of Leading Human Resources and Job-seeking, and finally General Department of Foreign Nationals Employment. Moreover, this Directorate is in charge of the affairs related to entrepreneurship and entrepreneurship policy making.
  12. 12. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 13 2-1-1-1 Policy Making and Policies of the Ministry of Labor in the area of Entrepreneurship Development or Creation of Entrepreneurship Environment The Ministry of Labor has intensified its measure in development of entrepreneurship by establishment of the Directorate of Entrepreneurship and Occupation. The most important policies of the Ministry have been as follows: 1) Development of Occupation Development Document 2) Formation of the National Organization of Skill 3) Development of an entrepreneurship plan for the country 4) Providing diversity in financing and the opportunity to establish public joint stock cooperative companies 5) Development of a bill for the Iranian Entrepreneurship System Organization In this section, some of the most important policies will be reviewed. a) Development of the Occupation Development Document in the Country b) The Occupation Development Document is “a comprehensive, coherent and dynamic collection of objectives, policies, strategies and operational plans, which organizes the defined activities, and predicts measures and the necessary executive projects, based on Islamic-Iranian and future-based values, in order to reach the objectives of the national prospect.” This document predicts that in the year 2025, some 50% of the GDP would be provided through entrepreneurial activities. National Organization of Skill The National Organization of Skill is one of the largest players of entrepreneurship education in Iran. This Organization also plays an important role in issuing permits for entrepreneurs. The National Organization of Skill was formed through merging the National Technical and Vocational Organization with the Applied and Scientific Comprehensive University. Currently, the National Organization of Skill has the largest network, having technical and professional centers, colleges, etc., and has a great role in the education of entrepreneurship. This Organization provides training and education for nearly 100 specialized fields of entrepreneurship,, and technical and vocational fields. Moreover, this Organization has a close cooperation with entrepreneurship education centers in Turin, Italy and the International Labor Organization. Development of National Occupation Development Plan The National Occupation Development Plan defines the tasks and duties of all the organizations and institutions, active in the area of entrepreneurship, with a strategic, future-based and plan-based approach, and also portrays the future situation of entrepreneurship in the country, in accordance with other legal obligations. This document has been developed, based on the Prospect Plan and the fifth five-year development plan of the country. The plan includes all the aspects related to
  13. 13. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 14 entrepreneurship, from cultural issues to those related to new methods of entrepreneurship financing, training and communication with entrepreneurs and researchers, to be established in the society. Providing diversity in financing and the opportunity to establish public joint stock cooperative companies The Ministry of Cooperatives, Labor and Social Welfare has provided the opportunity for all the entrepreneurs, who have operational ideas but do not have the required capital to establish public joint stock cooperatives, with the objective to provide diversity in financing. Those entrepreneurs, who have great and operational ideas, but do not have sufficient capital, and are not able to use banking facilities and loans because of not having the required guarantees, may form public joint stock cooperatives, under the supervision of the Ministry of Cooperatives, Labor and Social Welfare and also the Over-the Counter Stock Organization. National Entrepreneurship System Organization In accordance with the fifth five-year development plan, the Ministry of Cooperatives is obligated to establish an organization named the Entrepreneurship System Organization, which would act similar to the Engineering System Organization. Moreover, pursuant to the general policies of Article 44 of the Constitution, all the governances, in the area of investment and entrepreneurship will be delegated to the non-government sector. Consequently, the bill for the formation of Entrepreneurship System Organization has been presented to the government for ratification. The major goal and mission of this Organization would be creation of an integrated leading management system in the area of entrepreneurship development and development of sustainable employment. This organization has not been yet officially established. 2-1-2 Directorate of Science and Technology of the Presidential Office The mission of this Directorate is to create coordination and to strengthen the system of science, technology and innovation in the country, and also to complete the cycle of scientific innovation in the framework of several plans in three areas of science, technology and innovation. This Directorate acts performs its missions and operations related to coordination, synergy and strengthening of structures, plans, activities and vast resources of the country in the area of science, technology and innovation, which are scattered among the ministries and executive systems. Generally, this Directorate avoids entering other operational levels. The budget of this Directorate is about 5% of the total budget of research and technology in the country, which is provided to the related organizations on an objectified basis and in the framework of approved plans of the government and the parliament. In the area of commercialization and wealth generation, the Directorate of
  14. 14. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 15 Science and Technology has so far supported more than 1,700 knowledge-based companies in the form of companies based in the parks of science and technology and knowledge-based companies under the supervision of strategic technological headquarters. This Directorate has supported these companies by providing above 800 billion Rials in form of facilities, in order to witness emergence of new technologies and meeting the needs of industries. 2-1-2-1 Policy Making and Policies in the area of Entrepreneurship Development or Creation of Entrepreneurship Environment The policy of the Directorate of Science and Technology of the Presidential Office has always been to pay greater attention to the last cycle of science and technology development. This means that the research and studies conducted in the country should be demand-based, and after being converted to technology, they should become in form of a product. The Directorate of Science and Technology of the Presidential Office emphasizes that science and technology should not be only based in universities and scientific centers. Among other measures of this Directorate is helping the knowledge-based institutes in the following ways: 2-1-2-2 Support Fund of Researchers and Technologists Establishment of the Support Fund of Researchers and Technologists has been among the measures of the Directorate of Science and Technology of the Presidential Office. This fund was established in 2003 at the Directorate premises. This fund is managed by a board of trusties and its capital is supplied through the annual aid of the government, the aid of governmental and non-governmental systems, public donations, endowed properties, specific revenues, banking facilities and revenues resulted by investing on the surplus balance of the Fund. More explanation will be provided in the section covering the financial and credit institutes. 2-1-2-3 Payambar Azam (the great prophet) Scientific and Technological Award The Payambar Azam scientific and technological award (approved in June 2012) is one of the promoting activities of this Directorate for entrepreneurship in the areas of technology and innovation. The main objective of this award is to identify and introduce the top figures of science and technology in the Islamic world. This becomes possible by evaluation and assessment of scientific and technological projects and granting awards to the prominent scholars and specialists of the Islamic world. In addition, this award aims to create an environment in which the owners and applicants of technology be present at the Islamic countries and to present their achievements and identify their needs. This would pave the ground for a better interaction and cooperation among them.
  15. 15. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 16 2-1-3 Ministry of Science, Research and Technology This ministry is in charge of activities related to education, research and technology. With the objective to pay attention to the issue of entrepreneurship, the ministry has put emphasis on holding educational workshops of entrepreneurship at large universities, and also including a 2 or 3- credit course in the educational curriculum of the students of associate and bachelor degrees, since 2001. 2-1-3-1 Policy Making and Policies in the area of Entrepreneurship development or Creation of Entrepreneurship Environment The policies of the Ministry of Science to this line have been mostly focused on entrepreneurship and culture development. The ministry has played a role in the establishment of the Faculty of Entrepreneurship and KARAD Plan (which will be clarified in the next section). Moreover, the development of the technology parks is also supervised by the Ministry of Science, which includes the major part of entrepreneurial activities. However, along with the parks of science and technology and in order to develop entrepreneurship, many universities have established development centers, which play an important role in entrepreneurship. But, these centers have been greatly criticized in Iran, which will be described in detail in the section related to development centers. 2-1-3-2 KARAD plan In accordance with the third five-year development plan, the “entrepreneurship development plan in Iranian universities”, known as KARAD Plan (the Persian acronym for this plan) was developed, and launched in twelve universities across the country, under the supervision of Management and Planning Organization and the Ministry of Science, Research and Technology. The Ministry of Science delegated the responsibility of following up the implementation of this Plan, and the related office works to the National Organization for Educational Testing in 2001. The KARAD plan is currently being implemented in Tehran University, Sharif University of Technology, Khajeh Nasireddin Toosi University of Technology, Iran University of Science and Technology, Shahid Beheshti University, Esfahan University, Esfahan University of Technology, Shiraz University, Shahid Chamran Ahvaz University, Ferdowsi Mashhad University, Tabriz University and Amir Kabir University of Technology. It is expected that this plan will be implemented in other universities in the future. Most of the universities, which have implemented this plan, have formed a committee and center for entrepreneurship.
  16. 16. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 17 2-1-4 Ministry of Education The Ministry of Education may play a very important role in the development of entrepreneurship, since it is in charge of training the future young human recourses. This Ministry may include entrepreneurship educational programs to promote the entrepreneurship culture. To this line, the Ministry has adopted the following measures: 2-1-4-1 Student Entrepreneurs Support Fund The Parliamentary Commission of Plan and Budget suggested formation of this Fund. With regard to the conference titled “Role of Education in Entrepreneurship Development from the Viewpoint of Basic Development”, the students and the youth should be supported and encouraged, financially and intellectually, so that their entrepreneurship potentials would be developed. Culture development for welcoming entrepreneurship is very important and essential; therefore, some activities are required to upgrade the interest in work among the students. Interest to work would cause interest in innovation and finally interest in entrepreneurship. 2-1-4-2 Holding Conference on the Role of Education in Entrepreneurship Development This conference is held so that the distinguished entrepreneurs and those who study at technical high schools would be able to present their entrepreneurship plans. In addition to this educational workshop, an exhibition of the works of selected entrepreneurs will be held on the sideline of this conference. 2-1-5 Ministry of Jihad and Agriculture The Ministry of Jihad and Agriculture supports entrepreneurship in the two areas of agriculture and animal husbandry. As a result, this Ministry usually supports plans and projects in the fields of agriculture and animal husbandry. 2-1-5-1 Policy Making and Policies in the area of Entrepreneurship Development or Creation of Entrepreneurship Environment The Ministry participates in the activities related to entrepreneurship by having established an office for supporting investment, entrepreneurship and agricultural trade development. The policy of this office for supporting entrepreneurship is limited to financing and granting facilities to the entrepreneurs, who are active in the area of agriculture and the related fields. In addition to this, the Ministry of Agriculture performs other activities, some of which are mentioned below: A) Provide training for 20,000 graduates of agriculture
  17. 17. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 18 The Ministry of Jihad and Agriculture conducts a plan to provide training for 20,000 graduates of agriculture in the current year. This plan aims to upgrade the practical capabilities of the graduates of agriculture, and to transfer skill and practical experience and also to provide a suitable ground for them to enter the business market. With regard to the high unemployment rate among the graduates of agriculture, this plan would be very effective in job creation. Based on this plan, the graduates of agriculture, natural resources and veterinary, with educational degrees of associate degree, bachelor’s and master’s degree, as well as doctorate degree would be trained for a period of 11 months at the private, cooperative and governmental centers of agriculture and the related industries, and gain the necessary skill and expertise. During this period, the trainees will receive a financial assistance, in accordance with the minimum wage, approved by the Higher Council of Labor. 2-1-6 Municipality The municipality of each city has planned activities in the area of entrepreneurship in its departments of culture and arts. Tehran Municipality is the most active municipality, which has performed the following measures: 2-1-6-1 Entrepreneurship Centers and Houses Tehran Municipality has created 23 entrepreneurship centers and 304 entrepreneurship houses, in order to develop entrepreneurship culture. Each of the municipal community centers includes 13 entrepreneurship houses, one of which is the house of empowerment and popular collaborations. This house is in charge of education, observation, promotion and development of entrepreneurship and local businesses. The seven districts of Tehran Municipality with cooperation of the community consultants have predicted the required space and location for construction and operation of these centers at the community centers. Currently, experienced instructors provide long-term and short-term educational courses at the entrepreneurship houses to the entrepreneurs. 2-1-6-2 Labor Cultural Center This cultural center was established in 2005 and provides various educational courses for children, teenagers, the youth and adults. In addition, career, educational and entrepreneurship consulting are among other programs of the Labor Cultural Center.
  18. 18. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 19 2-1-7 University Jihad In line with its objectives and tasks the University Jihad established the Higher Education Institute of University Jihad in 1993, as a non-profit institute, in order to provide entrepreneurship educations. Moreover, the University Jihad established the Occupation Cooperation (Hamyari) Organization, based on the following three-stage plan, and with the objective to provide employment for the university graduates. 1- Establishment of Employment Headquarters in 1998, in order to conduct the initial and general studies for the employment of university graduates. 2- Adding the task of “participation in providing the suitable grounds for the employment of university graduates” to the articles of association of the University Jihad. 3- Establishment of affiliated braches and centers at the University Jihad Units in different provinces. Presently, the Occupation Cooperation Organization leads and directs the occupation section of the University Jihad in three areas of “entrepreneurship and empowerment, applied research and studies and labor market information”, with 22 branches, which have principal agreements, and 13 offices at different provinces of the country. 2-2 Educational and Research Institutions The educational and research institutes play a key role in provision of entrepreneurship education and the required expertise. Earlier, the role of the Ministry of Labor, Research and Technology was mentioned in paying attention to the issue of entrepreneurship. In addition, there are numerous activities for conducting entrepreneurship research and studies, the most important of which is preparation of the report of Global Entrepreneurship Monitor (GEM) in Iran, which is done by the Faculty of Entrepreneurship of Tehran University, with the cooperation of Global Entrepreneurship Monitor. The results of this research are reflected in one of the key reports, which will be referred to in comparing entrepreneurship process in Iran. There are other research institutes, which have conducted several research and studies in the field of entrepreneurship, such as the Research Center of Islamic Consultative Parliament, the Strategic Research Center of the Presidential Office, and the Strategic Research Center of the Expediency Council. 2-2-1 Entrepreneurship Education Centers Education is one of the most effective ways to develop entrepreneurship. Other than official education offered by the ministries of science and education, there are centers which try to develop entrepreneurship on an unofficial and independent way.
  19. 19. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 20 Four of these education centers are introduced here, among which are Parto Social Entrepreneurship School and Khorshid Entrepreneurship School. A) Faculty of Entrepreneurship The first course of entrepreneurship education was offered by the Faculty of Management of Tehran University, under Bachelor of Business Administration, majoring entrepreneurship. However, the official education of entrepreneurship in Iran as an independent field dates back to 2007. Considering that the 20-Year Prospect of the Islamic Republic of Iran emphasizes on a knowledge-based economy, and also the policy makers paid attention to the specialty needs provided by the fourth five-year development plan of the country, the Board of Trustees of Tehran University approved establishment of the Faculty of Entrepreneurship in May 2007. This faculty has been the first Faculty of Entrepreneurship in Iran and the Middle East. B) Institute of Labor and Social Security The Institute of Labor and Social Security is a governmental research institute, which provided the plan for entrepreneurship education in 1988, benefitting from the resources of International Labor Organization. This institute offered entrepreneurship as one of the courses of the high school field of work and knowledge in 1989, concurrent with development of the new educational system in the country. The entrepreneurship education plan emphasizes that “education for a salary-based job creation” is not the only way to tackle the increasing problem of unemployment, and that the domain of education has gone beyond the culture of “working for others.” The Institute of Labor and Social Security has five decades of background in educational, research, publication and information activities in the areas of labor social knowledge, promotion of knowledge and awareness for the three groups of laborers, employers and the government representatives in labor relations, labor market adjustment, labor social and cultural affairs, entrepreneurship development and social empowerment of laborers, efficiency, competency, effectiveness and productivity, and also preventing the injuries of human resources. This institute performs its activities with the cooperation and collaboration of specialized resources, skilled experts, prominent instructors, faculty members and universities. Many of different activities of this institute are focused on entrepreneurship. The educational and research plans and many other operations of the Institute of Labor and Social Security are in line with entrepreneurship promotion. Preparation of educational packages for entrepreneurship and business skills, designed for various groups, educational courses for entrepreneurship and business skills and training entrepreneurship instructors are among the activities of this institute in the area of entrepreneurship. (Labor Market, 12th . year, number 680)
  20. 20. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 21 C) Khorshid Entrepreneurship School Khorshid Entrepreneurship School is focused on women’s entrepreneurship, and was established in autumn 2009, with the objective to provide education for women in the area of new methods and procedures of business establishment, with participation of the first group of women who were interested in this area. Above 270 students have participated in the online and free courses of Khorshid Entrepreneurship School, many of whom are presently starting their businesses. D) Parto Social Entrepreneurship School Parto is among the few active institutes, which provide education in the area of “social entrepreneurship”, with the objective to develop practical solutions for social problems in Iran. The reason and motivation behind opening of this school was to develop the precious achievements of Iranian social entrepreneurs such as Jabbar Baghcheban (founder of the first school for the deaf in Iran), or Arsen Minasian (founder of the first house of the old in Iran), and also to encourage people to social entrepreneurship. The first educational courses of Parto School was held in summer 2010 on an online and free basis, and more than 125 students have been graduated from the courses of Parto School ever since. The projects of graduates of Parto School have been in various fields such as job creation for the women who are the guardians of their families, creation of libraries at villages, treatment of children who suffer from cancer, development of social corporate responsibility and job creation for those who migrate from villages to the cities. 2-3 The media The media is another player in the area of entrepreneurship ecosystem, which plays an effective role through introducing entrepreneurship success stories and providing information in the areas of events and laws. Apart from specialized industrial media, there are some media which are focused on entrepreneurship in Iran. 2-3-1 Tafahom Newspaper Tafahom Elite entrepreneurship Company is the editor-in-chief of Tafahom Newspaper. This newspaper started operation in August 2005 and is active in the areas such as Iranian economy, entrepreneurship bank and employment, but does not cover political issues. The newspaper refers to the unemployment crisis and lack of enough attention to entrepreneurs, as the major problems in Iran. Tafahom Newspaper is also available online on the internet for its readers, in order to help solve the unemployment crisis. One of the most areas of concern of this newspaper is the problems of entrepreneurs.
  21. 21. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 22 2-3-2 Business Weekly Business (Kasbokar) Weekly was recently changed to a newspaper, and is among the media which covers entrepreneurship issues. It conducts an interview with one of the successful entrepreneurs in each of its issues. 2-3-3 Labor Market Weekly The Labor Market (Bazarekar) publication started operation in 2000, and later in May 2008 the Information Center of the University Jihad Labor Market took charge of publication of the weekly, with the objective to conduct needs assessment of the society, and to provide the latest news and information of employment, entrepreneurship and recruitment. 2-4 Financing Centers The financial institutes play an important role in entrepreneurship ecosystem. The financial institutes and banks are among the official channels of the new businesses for attracting financial resources. However, some of the entrepreneurs supply finance through unofficial resources such as borrowing money from their friends and relatives. The most important financial institutes in Iran, which act as financial dealers are commercial banks, saving and interest-free funds, insurance companies, investment companies and credit institutes. 2-4-1 Interest-free Funds The interest-free funds were formed to grant loan to the needy people, and in accordance with the Islamic banking principles. For instance, the State Cooperative Fund , Employment Fund at Imam Khomeini Relief Committee and the Rural Micro Credits Fund at the Ministry of Jihad and Agriculture were formed to help entrepreneurship. The official statistics indicate that there are about 6,000 private interest-free funds active in Iran. The main objective of the interest-free funds is to provide micro credits, without an interest and merely based on a trivial commission for solving the problems of the people and also for entrepreneurship. These funds are active at a national, provincial, urban and community level. 2-4-2 Financing Companies and Private Venture Capital Investors Financing institutes also play an effective role in the entrepreneurship environment. Despite banks, which provide facilities through the resources of depositors, clients and saving accounts, the financing companies do not have liquidity for granting cash
  22. 22. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 23 loans. In fact, these institutes act as a dealer and connect the stock sellers to the buyers. However, the financing companies do not play an effective role in new businesses, but the venture capital investment funds take the risk because of their sufficient industrial experience. These funds support entrepreneurs and cover their weak points (management experience, adequate financial resources and market). Shenasa, Simorgh and Sarava Pars are among the largest venture capital investors in the country. Pishgaman Amin Sarmayeh Pasargad Company (Shenasa) was established in 2012 as a venture capital investment fund and subsidiary of Pasargad Financial Group, in order to identify and support innovative and profit making businesses in the area of information and communication technology. This company has invested in some of the start-up businesses in the area of information technology. Moreover, Sarava Investment Company is the first private venture capital investment fund in Iran, which invests in the most competitive businesses in the area of internet and electronic commerce in Iran, which are run by the Iranian entrepreneurs. Sarava also supports these entrepreneurs in the direction of rapid growth and development, by providing marketing, strategic, financial and legal consulting. 2-4-3 Governmental Funds The government provides entrepreneurs with a huge budget through various funds and institutions, with diverse objectives. 2-4-3-1 Innovation and Flourishing Fund of the Directorate of Science and Technology of the Presidential Office The duty of Innovation and Flourishing Fund of the Directorate of Science and Technology of the Presidential Office is to support the innovative, technological and promotion plans of knowledge-based companies, from financial aspects and by providing facilities. In accordance with Article 2 of its Articles of Association, the Fund is established for an unlimited period of time, as a legal entity and with independence in the areas of recruitment, administration, finance and transactions, based on the facilities and approvals of the Board of Trustees and under the supervision of the President (Head of Higher Council of Science, Research and Technology) and in accordance with its Articles of Association. 2-4-3-2 National Researchers and Industrialists Support Fund1 1 -www.insf.org/index.php?dialup=true
  23. 23. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 24 National Researchers and Industrialists Support Fund is also one of the funds affiliated to the Directorate of Science and Technology of the Presidential Office. The objectives of this fund are defined to be enhancement of research activities in the field of science and technology production, and also commercialization, so that the public would benefit from the results thereof. This would be done through providing assistance and supporting, financial and intellectual services to the Iranian university and seminary researchers and industrialists, either legal or real. 2-4-3-3 Nokhbegan Technology Development Institute1 Nokhbegan (Elite) Technology Development Institute is among the first venture capital institutes in the country, which was established in 2002, with the help of the Office of Technology Cooperation of the Presidential Office. Nokhbegan is an independent legal entity, which after expansion of its activities, moved its head office to Pardis Technology Park in 2007, located 20 kilometers east of Tehran. This is considered as a new chapter in the activities of this institute, since Pardis Technology Park is a technology hub in the region. Nokhbegan provides investment to real entities or start- up companies. Nokhbegan Technology Development provides a full package of feasibility studies, business plan, technology evaluation and companies’ assessment and evaluation to all the governmental and private organizations, as well as real and legal persons, and besides enters partnership with such entities in all the fields related to advanced technologies. 2-4-3-4 Novin Technology Development Fund2 Novin Technology Development Fund assists entrepreneurs in commercialization of their research findings as a venture capital investor, benefiting from the experience and connections of its shareholders, such as Pardis Technology Park and Nokhbegan Technology Development Institute (with more than five years of successful background in venture capital investment). Novin Technology Development Fund was established in 2007 and is among the non-governmental research and technology funds, which aims to pave the ground for participation and investment of non-government sector and qualitative and quantitative support from applied-developmental and technological research activities. The Fund also provides unique financial services to the innovative and specialized entrepreneurs, with the help of government and Pardis Technology Park, in accordance with Article 100 of the third five-year development plan (repeated in Article 45 of the fourth five-year development plan), and based on the permit of the related working group. 1 - www.mtfn.ir/about.php 2 - www.hitechfund.ir/fa
  24. 24. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 25 2-4-3-5 Sharif Export Development Research and Technology Fund Sharif Export Development Research and Technology Fund was established in order to support and commercialize the innovative research plans and inventions of the elite. To this purpose, the Fund provides facilities or financial partnership in the projects presented by the inventors, in the framework of the approved laws and by- laws. In addition to this, the Fund leads and provides consulting to the owners of the plan, for marketing of the produced products. It should be noted that after the innovative companies become successful and reach a level of profit making, and also new shareholders join the company, the Fund will take its capital out of these companies, in order to invest in new plans and projects. 2-5 Non-Governmental Organizations As a connection between the people and the government, the non-governmental organizations may present the plans, which pave the ground for job creation, to the related government institutions. Most of the organizations, active in the area of occupation, provide plans and solutions for solving the problems and removing obstacles in this area, through which they participate in solving this problem. Furthermore, many of these organizations are active in the area of entrepreneurship education. 2-5-1 Chamber of Commerce Creating a suitable entrepreneurship environment and removing the business obstacles are among the objectives of the Chamber of Commerce. On the other hand, Article 44 and Business Environment Commission is one of the important commissions of the Chamber of Commerce. However, the chamber does not have specific activities in the area of entrepreneurship. Though some entrepreneurship associations, such as the Association of Women Entrepreneurs and Association of Young Merchants and Entrepreneurs do have office at the Chamber of Commerce and are members to this chamber, the Chamber of Commerce is not significantly active in the area of entrepreneurship, other than holding discussions and providing space.
  25. 25. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 26 2-5-2 Iran Entrepreneurship Association The Iran Entrepreneurship Association is a non-profit institute, which was established in 2005. However, the activities of this Association have been intensified significantly since 2012. This Association represents Global Entrepreneurship Week (GEW) in Iran, and has conducted start-up weekend events in Iran, since September 2013. The Association has also managed to attract entrepreneurs in different cities of the country and provide new entrepreneurship education in more than seven cities. 2-5-3 Association of Women Entrepreneurs Association of Women Entrepreneurs was formed by a number of entrepreneurs and business owners, with the objective to promote the entrepreneurship culture for Iranian women, and registered by the Ministry of Labor and Social Affairs in March 2005. 2-5-4 Women and Youth Entrepreneurship Development Foundation The activities of this Foundation are programmed and implemented through defining research, development, education and consulting plans. The Foundation has defined two basic roles for itself: 1) capacity creation and 2) creating a network of new entrepreneurs, adolescents, entrepreneurs and social entrepreneurs. In line with its major objective, namely promotion and development of entrepreneurship, three concepts are included in the objectives of the Foundation: conceptualization, modeling and institutionalization. 2-5-5 Iranian House of Entrepreneurs Iranian House of Entrepreneurs is the first entrepreneurship NGO in Iran, which obtained its permit from the Ministry of the Interior of the Islamic Republic of Iran. House of Entrepreneurs launched its activities by those who were interested in entrepreneurship, in line with the objectives defined in its Articles of Association in four areas of education, consulting, promotion and research. 2-6 Incubators and Accelerators The development centers or incubators play a key role in entrepreneurship and are connected to many other players of the ecosystem. Generally, the development centers in Iran are governmental and are not highly productive. Many believe that these centers have not been able to gain a significant success in training successful and prominent entrepreneurs. There is not an accelerator center in Iran on an official
  26. 26. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 27 way, and reportedly there are only a few private accelerators, without further information. 2-7 Development Centers and Parks of Science and Technology There are totally 99 parks of science and technology, which do have official permits, out of which 21 parks are located in Tehran. Some seven parks of Tehran are affiliated to the University Jihad, and other parks and centers are affiliated to Tarbiat Modares University, Tehran University, Ministry of Energy, Ministry of Health and Medical Education, Amir Kabir University, etc. Fars Province, with 8 parks and Khorassan Razavi Province, with 7 parks, are ranked second and third after Tehran. The development centers in Iran present numerous services to the admitted companies. These services include: 1. General and office services: telephone, internet, conference room, secretary and clerk works, computer, secretariat, cleaning and … 2. Administrative and executive services: Loans and government facilities, network, tax, rental aid, etc. 3. Equipment and facilities services: Office space, parking, administrative and office equipment, laboratory resources, workshop equipment, etc. 4. Technical and specialized services: Financial and marketing consulting, legal and management consulting, educational courses, providing access to financial resources, etc. 2-8 Entrepreneurship Festivals and Events The entrepreneurship festivals and events play an important role in supporting the ecosystem, in a way that some experts believe that the number of entrepreneurship events may be regarded as one of the key indices of ecosystem. There are several events in the area of entrepreneurship. 2-8-1 Sheikh Bahaei National Festival of Technology Creation Sheikh Bahaei National Festival of Technology Creation is held in Esfahan in May of each year, concurrent with the birthday of “Sheikh Bahaei”, aiming to promote and develop the culture of creativity, innovation and technology creation. This festival covers all the fields of technology creation, including technology and engineering, medicine and health, basic sciences, agriculture, human sciences, culture and arts, services, etc., and is not limited to a certain group or specialty. There is no limitation for the participants of this festival regarding age, gender or education. Even, the Iranian expatriates are invited to the festival. The event is held in two sections of
  27. 27. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 28 competitions and non-competitions. The competitions include identification of top entrepreneurs, best business designers and the most significant supporters of technology creation. The non-competition section, however, includes exhibitions, idea exchange and educational seminars. 2-8-2 Startup Weekend in Iran The international event of start-up weekend was for the first time held in the country by the Iranian Association of Entrepreneurship. The objective of this event is to provide new educations of entrepreneurship, in addition to starting a business, with the help of entrepreneurship instructors. This event was rapidly expanded all across the country and above 1,000 entrepreneurs participated in the start-up weekend during one year. The GEM local report on Iran refers to this event as one of the effective ways for promoting entrepreneurship. 2-8-3 Sharif Festival of Entrepreneurship and Business Development Sharif Festival of Entrepreneurship and Business Development is held by the Sharif Festival of Entrepreneurship and Business Development Center, as well as the Technology and Research Fund of Sharif University of Technology. This festival, which is held to help commercialization of knowledge-based plans, includes various parts such as preparation of business plan and business model for knowledge-based and innovative ideas and also the business plan of newly established companies. In this festival, the participants and students learn the concepts and principles of business and do practical exercises. They also develop their own “business plan” in a competitive environment, and based on their technological ideas. The final output of this festival is the top business plans, which would benefit from the supporting services of the Development Center of Sharif University of Technology. Moreover, Sharif Research and Technology Fund and other investors would invest in such plans for commercialization of the plan and production of the related products. 2-8-4 Hazrat Ali Akbar Festival National Festival of Hazrat Ali Akbar is held on the day of the youth each year, with the objective to identify and introduce patterns and appreciate the successful youth. Hazrat Ali Akbar was held in 2010, in a new framework and under the title of “National Iranian Youth Festival”, at two levels of topical festivals and festival of festivals. Some 420 young entrepreneurs participated in this festival, from whom 93 persons gained points and ultimately some 43 persons could enter the jury section as top young entrepreneurs.
  28. 28. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 29 Chapter Three- Entrepreneurship Ecosystem in Four Large Cities In order to study the entrepreneurship ecosystem in various cities of Iran and comparing them with Tehran, and finally to identify the main challenges of ecosystem in the country, the Association conducted focus groups in Esfahan, Mashhad, Shiraz and Ahvaz. In fact, all the ecosystem players are centered in Tehran, the Capital of Iran, and the government, the media, financers and non-governmental organization are highly active in this city, and besides the private sector plays a significant role in the business environment. However, this situation is different in other cities, making the challenges of each city in the area of entrepreneurship specific and unique. Esfahan Many refer to Esfahan as the most industrial city of Iran. The heavy industries of steel, steel mill and others have caused the city to have one of the most successful chambers of commerce in Iran. The suitable business environment has been the reason behind the extensive entrepreneurship activities in Esfahan. One of the successful plans of the country for promotion of entrepreneurship and innovation is “Esfahan Research and Scientific Zone”, which holds the largest entrepreneurship event, named “Sheikh Bahaei Festival”, on an annual basis. However, according to the related players in Esfahan, the biggest challenge is that although the government spends a great budget for such activities, either the efforts do not lead to success stories or there is a great weakness in introduction and promotion of these stories. Another challenge that Esfahan faces is the rapid change of laws and regulations and also the government officials. This city enjoys high entrepreneurship capacities. The problem of technology and infrastructure has been solved in this city, but more attention is needed for making the city more powerful in this area. In fact, Esfahan has a strong accelerator and incubator, named Esfahan Research and Scientific Zone. Mashhad Mashhad is the greatest religious tourist destination in Iran, with close to 20 million visitors per year. Moreover, Astan Qods Razavi (the organization in charge of Emam Reza Shrine) is one of the enormous economic institutions and among the key players of this city. Consequently, the entrepreneurship environment in this city is affected by these two factors. However, as reported by most of the entrepreneurs and confirmed by other players, the key challenge in this city is that there is no network, which would act as a connection between entrepreneurs and other players, such as the government, the media and universities, so that the voice of entrepreneurs would be heard and their demands from these players would be supplied. In fact, Mashhad faces the challenge of lack of a communication network between the ecosystem players, especially the government, and entrepreneurs. Like Esfahan, Mashhad does not face a challenge related to technology and
  29. 29. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 30 infrastructure. However, more attention is needed to make this city stronger, especially in the area of technological entrepreneurship and making it a hub in the country. The need to creation of a communication network and empowerment of the media is greatly felt in this city. Ahvaz The oil and gas industries are greatly concentrated in Ahvaz, and as a result the role of government in the business environment of this city is very significant. Many entrepreneurs refer to this issue as an obstacle for their activities, since the great dominance of the government prevents other ecosystem players to have their roles. The government has spent a large budget for the entrepreneurship educations in this city, but according to the players, this has had no positive results and on the contrary has had a meddling nature. The great challenge in Ahvaz is meddling of the government. It is true that the government has played a very important role in providing entrepreneurship education, but it needs to act as a facilitator in the city ecosystem, rather than an executive meddler. Furthermore, there is a need to a communication network for upgrading connection of the government with other players. Shiraz Shiraz faces a serious challenge in the area of entrepreneurship culture development. The media, government and the related educational institutes have not played an effective role in this regard. A need to educational and promotional programs in the area of entrepreneurship is greatly felt in this city. Generally, the communication network among the ecosystem players is very weak in these cities. On the other hand, the associations play a very weak role in the entrepreneurship ecosystem as opposed to the government. The laws and regulations are not stable enough and the government officials either change rapidly or do not have an effective interaction with all the players. As mentioned, there are positive and negative aspects in each of these cities with regard to the entrepreneurship ecosystem power in the country. 3-1 Mashhad Entrepreneurship Ecosystem Analysis Mashhad metropolitan, which is the second largest city in Iran, is the capital of Khorassan Razavi province and enjoys a rather lucrative economy due to its specific location and situation. The largest share of private sector occupation in Mashhad is related to those who receive wage and salary (46.2%), and the smallest share relates to the employees of family businesses who do not receive any wage and salary (2.4%).
  30. 30. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 31 With regard to the increasing population of Mashhad, and the high number of pilgrims and the presence of various businesses, the Bazaar is the strongest economic hub, in a way that currently Mashhad has about 100,000 trade units. Table 3-1 Mashhad Entrepreneurship Ecosystem Analysis Entrepreneurship Ecosystem Performed Measures Challenges and Problems Entrepreneurs - Establishment of 80 businesses in the area of information technology and software production - Ambiguity in the starting point and entrepreneurship environment for entrepreneurs - Management problems for entrepreneurs in the starting procedures, especially in: 1) Access to educational resources 2) Social Skills The media - The entrepreneurship media are very weak in Khorassan Razavi Province and do not have a connection with entrepreneurs. - No network of entrepreneurship instructors in this province Universities and Scientific Centers - Holding entrepreneurship workshops, from idea to implementation - Holding digital entrepreneurship workshop - Growth of technology entrepreneurship in Khorassan - Support of universities and service centers, such as municipality, in the area of technology entrepreneurship - Some 2,000 individuals receive entrepreneurship in Mashhad University, per annum. - The need to entrepreneurship instructors to educate the young entrepreneurs is greatly felt. - There is a capacity for training more instructors, and it seems necessary. Accelerators and Incubators - Establishment of Falakozzahra Private Development Center - Establishment of marketing offices and clinic - Holding Research Week Exhibition - Incorrect criteria for choosing the top entrepreneur - Difficulty of indices for assessment of capabilities of companies - Technical knowledge is not evaluated. There is no standard or organization in charge of evaluation and assessment; therefore, the idea owners and young entrepreneurs always face problems. Venture Capital Investors, - The Research and - A volatile business environment does
  31. 31. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 32 Entrepreneurship Ecosystem Performed Measures Challenges and Problems Banks and Financial Institutes Technology Fund is active in two areas: 1) loans, 2) investment - The share of government in the Fund is 49%, and that of the private sector stands at 51% (Azad University and private companies) - Success story: Jahan Andisheh has been launched with the support of this Fund. not welcome sustainable investment. - The Fund only provides financial services to entrepreneurs. - There is no mechanism for the investor to trust entrepreneurs. Associations - Establishment of Labor and Entrepreneurship Cultural Center in Mashhad by the municipality - Establishment of Employment Consulting Clinic - Holding educational courses of business skills, by the Entrepreneurship and Employment Center of Mashhad University Jihad - Holding the first national conference on business and investment plan - Providing career consulting to close to 10,000 graduates of entrepreneurship skills courses and providing certificate to 2,000 graduates by Hamyari Organization - No entrepreneurship event for creation of association Laws and Regulations - High expenses for establishment of a company in entrepreneurship ecosystem - The cash contribution of shareholders is subject to 10% tax, while banking loans and facilities are not subject to tax, and this needs to be revised. Government Organizations - The government should be more active in integration of entrepreneurship ecosystem. Study of Entrepreneurship Ecosystem Situation in Mashhad
  32. 32. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 33 The technology entrepreneurship in Mashhad and Khorassan Province is rapidly growing. The universities and service centers, such as municipality, support the technology entrepreneurship at a good level. This shows that the city enjoys the required infrastructures for overcoming the technology challenge, and also enjoys the capacity to become the technology entrepreneurship hub in the country. This requires more attention to technology entrepreneurship. The technology related players, such as the government and especially the Directorate of Science and Technology of the Presidential Office might play a facilitating and supporting role in this area. Moreover, the universities and research and scientific institutes of the city might greatly help upgrading the issue of technology entrepreneurship, because technology entrepreneurship has direct relation with urban modernization and population density. Among the major challenges of this city is the lack of organizational architecture and integrity of entrepreneurship ecosystem, a significant feature of which is the lack of an integrated network for creating relation among the ecosystem players in this city. However, Mashhad has a significant role in the entrepreneurship ecosystem of the country, considering its suitable location, agricultural capacities and especially the pilgrimage and tourist location. Notwithstanding, the research results indicate that it requires strengthening of relations among the various sections of entrepreneurship ecosystem of the city. 3-2 Esfahan Entrepreneurship Ecosystem Analysis The most important entrepreneurial challenge in this city is related to the issue of laws and the government. The ecosystem players in Esfahan believe that the one who seeks change should be and may be an entrepreneur, because entrepreneurs do have enough motivation for change. Entrepreneurs may initiate change towards development, thanks to their determination, perseverance and sharing information with other entrepreneurs. They expect the government to be a facilitator, not a meddler. Moreover, the interests of entrepreneurs should be taken into account when developing and revising laws and regulations, for instance the laws related to subsidies. There also should be management stability in the government, regarding entrepreneurship ecosystem, so that the policies and decisions do not change frequently. The industrial power of Esfahan, and the existence of a large accelerator and incubator such as the Research and Scientific Zone in this city highlights the role of Esfahan in the entrepreneurship ecosystem of the country. The government is needed to boost its facilitating and supportive role in the ecosystem of the city, given the high capacities of this city. In addition, the scientific and research institutes should focus their research and studies on solving the industrial problems of the city. Table 3-2 Esfahan Entrepreneurship Ecosystem Analysis
  33. 33. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 34 Entrepreneurship Ecosystem Performed Measures Challenges and Problems Entrepreneurs - Establishment of small and medium sized industrial companies - The role of mentor and instructor in the area of entrepreneurship is not strong. (each of the young entrepreneurs should have an experienced entrepreneurship instructor) The media - Lack of a network, which studies the entrepreneurship challenges, by forming working groups comprised of investors, banks, institutes and entrepreneurs. Universities and Scientific Centers - Lack of entrepreneurship education for corporate sustainability Accelerators and Incubators - There are some 300 small and medium-sized companies at the industrial zone and development centers of Esfahan, which is the largest number in the country. - Existence of successful models at the development centers, supporting through idea maturation to business maturation - Non-availability of entrepreneurship physical environment and space, because of lack of business complexes Venture Capital Investors, Banks and Financial Institutes - Cooperation of financing centers, such as Kosar Financial Credit Institute with the centers of the Ministry of Defense for supporting start-up companies - Difficulty of assessment and identification of real entrepreneurs for financial support - Difficulty of financing, with regard to the high banking interests Associations - The role of associations is fully ignored. Government Organizations - The government is the dominant player in entrepreneurship environment of Esfahan. - Dominance of the government and weakening of the private sector - Unclear governmental supporting policies - Instable economic conditions 3-3 Ahvaz (Khuzestan) Entrepreneurship Ecosystem Analysis The ecosystem players of this large city believe that the economy in Ahvaz is a governmental economy, which is dependent to oil and sugar cane. The government may be the only ecosystem player in this city; therefore, there is a concealed rentier in the economic relations. Ahvaz and generally Khuzestan Province has a very prominent role in the entrepreneurship ecosystem of the country, thanks to its access
  34. 34. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 35 to the high seas, good import and export location and lucrative agricultural capacities. Most of the players believe that the government should curb its meddling role, and support entrepreneurs in this city and also strengthen their potentials and motivations in ecosystem development. The government should act as liaison, a supporter and a communication bridge for these players in order to make its highlighted role in entrepreneurship of the city more effective. In fact, the government should be the main player for change in developing entrepreneurship in Ahvaz. Table 3-3 Ahvaz Entrepreneurship Ecosystem Analysis Entrepreneurship Ecosystem Performed Measures Challenges and Problems Entrepreneurs - Entrepreneurship characteristics may not be observed among entrepreneurs. Dependency to the government has lowered their risk taking power. - Entrepreneurs do not pay attention to the legal opportunities and facilities, as well as supportive legal facilities. The media (Information Providing Centers) - Bazarekar Newspaper holds regular meetings between entrepreneurs and other players, providing information in this regard. - Considering that Bazarekar Newspaper has had a successful experience in holding regular meetings between entrepreneurs and other players, Khuzestan province needs an entrepreneurship specialized newspaper for providing information. - The media should be reasonably free in introducing entrepreneurship ideas, problems, etc. - The fact that entrepreneurs do not pay attention to legal opportunities and the existing facilities might be due to a weakness in information dissemination. Universities and Scientific Centers -Establishment of development centers of Technology Entrepreneurs - Education and instructorship in the area of entrepreneurship is weak in this province. - The only institution which is actively in charge of entrepreneurship education is the Department of Labor of this province. - Despite the fact that entrepreneurship education is required for fast profit making businesses, such education is not sufficient.
  35. 35. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 36 Entrepreneurship Ecosystem Performed Measures Challenges and Problems - The government sector is still in charge of education, while private education and consulting companies do exist. Accelerators and Incubators -Holding National Festival of “from Science to Practice”: Technology Capability Show of the Province -Holding Festival to Admire Top Entrepreneurs in the Province: Honoring 11 top entrepreneurs -The parks do have the budget to grant loans to entrepreneurs. The budget may be increased in order to support the interest and motivation to entrepreneurship. -There is no successful example of newly established companies in the parks. - Entrepreneurship development foundations need to be established. Venture Capital Investors, Banks and Financial Institutes -Agreement reached between the Cooperative Fund and Mehr Reza Fund for granting interest- free loans to the cooperatives. - The government sector is the largest financer. - Private financial institutes need to be supported and new institutes to be established, if necessary. - The guideline to support the knowledge-based and venture capital investment institutes should put emphasis on the establishment of such investment institutes. -The Articles of Association of the venture and risk taking companies should be provided to the institutes, which are potentially capable to be active in this area. - The possibility of supporting entrepreneurship ideas by the private sector investors is low. (7.1%, while 37% in Brazil) - The internal regulations of Mehr Reza Fund might have an easier and less bureaucratic procedure. There is a proper prioritization for the needy people, such as the unemployed or the family guardians; however, such prioritization should aim to lower social problems. Associations -Establishment of a data bank - Twelve meetings held with entrepreneurs and the related experience transferred to other provinces - Establishment of Entrepreneurship Service Centers - Entrepreneurship Development Foundations need to be established. Government -The government has approved - Enough attention is not paid to
  36. 36. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 37 Entrepreneurship Ecosystem Performed Measures Challenges and Problems Organizations formation of entrepreneurship consulting and education companies for rating and formation of entrepreneurship consulting companies. Ten companies have been rated in Khuzestan Province so far. - Government entrepreneurship has been created in Khuzestan Province. women entrepreneurship, despite the fact that salary receiving job opportunities for women are very few. - Private sector is not trusted enough. -The positive role of the Provincial Department of Labor in entrepreneurship development should be regarded as a model. - The positive performance of the Provincial Department of Labor has created governmental entrepreneurship. It is needed that the related institutions become familiar with the concept of ecosystem, so that they cooperate with the related successful institutions, such as the Department of Labor, in order to strengthen the ecosystem. - The entrepreneurs are dependent on the government and therefore governmental economy is created in the province. (a balance need to be created between dependency and support) - One of the expectations of entrepreneurs is to canalize the government’s role in entrepreneurship development. 3-4 Shiraz Entrepreneurship Ecosystem Analysis The ecosystem players of the city believe that the entrepreneurship culture, which is the result of efforts and activities of three major ecosystem players, namely educational institutes, the media and government, is at a low level. These correlated players need to try more to develop such culture. The low entrepreneurship culture is in a way that the entrepreneurs in the province are not supported by each other. Moreover, the research results indicate that the entrepreneurs in this city act like independent islands and there is not a strong network for boosting the relation of players in this city. The coordination among various governmental institutions in this large city is also weak, which is by itself caused by the weak connections among all the ecosystem players. Table 3-4 Shiraz Entrepreneurship Ecosystem Analysis
  37. 37. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 38 Entrepreneurship Ecosystem Performed Measures Challenges and Problems Entrepreneurs - Women entrepreneurship development through providing entrepreneurship education by the government - Lack of a network among the private sector and weak communication between entrepreneurs and the government - Weak data bank of entrepreneurs The media -Entrepreneurship is not well defined and introduced by the media. -The real successful entrepreneurs need to be introduced. -The media are not active enough in the area of entrepreneurship. Universities and Scientific Centers -Entrepreneurship Center established in Shiraz University: Joint educational and promotion activities done with other institutions The working place of entrepreneurs visited Innovative plans of students supported Educational workshop of women entrepreneurship development held in Shiraz -Weak basic education for entrepreneurs - Education should start in the primary schools - Entrepreneurship education is very traditional and ineffective. Accelerators and Incubators - Holding National Occupation and Entrepreneurship Development Exhibition - Holding the first annual Conference of Management, Innovation and Entrepreneurship - Holding festival to appreciate the top entrepreneurs and workers and the exemplary productions units of Fars Province: Introducing 9 top entrepreneurs in various fields of industry, services and agriculture -Holding Cultural Entrepreneurship Conference for the first time in Shiraz - Lack of enough knowledge of business and entrepreneurship in these institutions Venture Capital Investors, Banks and Financial Institutes -Granting one billion Rials of interest-free facilities for women entrepreneurs of Fars Province -Granting facilities by most of the banks -Granting free loans in the area of - Excessive bureaucracy for receiving capital from investors
  38. 38. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 39 Entrepreneurship Ecosystem Performed Measures Challenges and Problems inventions, by Nokhbegan (Elite) Foundation Associations -Establishment of Specialized Committee of Women Entrepreneurs and Merchants at the Provincial Chamber of Commerce: More support for women directors and entrepreneurs -Lack of an association for entrepreneurs to ease their communication Laws and Regulations - Useless and excessive regulations - Laws and regulations need facilitation Government Organizations -Holding conference and exhibition for “Introduction of Women Entrepreneurs Achievements” - Supervision and monitoring of the government needed in implementation of the entrepreneurship-related laws - Weak communication between entrepreneurs and officials - Indifference of the officials towards the issue of entrepreneurship -The government does not benefit from the experience of entrepreneurs. 3-5 Comparison of Entrepreneurship Ecosystem in the Large Cities under Study (Entrepreneurship Ecosystem Challenges of Each City)
  39. 39. Table 3-5 Comparison of Entrepreneurship Ecosystem in four Large Cities Entrepreneurship Ecosystem Esfahan Mashhad Ahvaz Shiraz Entrepreneurs Lack of an experienced instructor for each entrepreneur Ambiguity in the starting point and entrepreneurship environment for entrepreneurs Entrepreneurs do not show entrepreneurship characteristics; government dependency has lowered their risk taking power. Weak data bank of entrepreneurs The media The media do not play their role. Entrepreneurship media are weak in Khorassan Razavi Province and do not have contact with entrepreneurs. The media should be reasonably free in introducing the entrepreneurs’ ideas, challenges, etc. - The media are not active enough in the area of entrepreneurship. - Weak plans for promotion of entrepreneurship culture Universities and Scientific Centers Lack of education for corporate sustainability Technologic entrepreneurship needs more attention, as the entrepreneurship strength in Mashhad - Education and instructorship in entrepreneurship is weak in this province. - Provincial Department of Labor is the only institution active in the area of entrepreneurship education. Entrepreneurship educations are very traditional and ineffective and are not in line with entrepreneurship culture promotion.
  40. 40. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 41 Entrepreneurship Ecosystem Esfahan Mashhad Ahvaz Shiraz Accelerators and Incubators Lack of business complexes Difficulty in indices of corporate capability assessment Those who study BP in development centers do not have an industrial approach. Lack of business related knowledge in these institutions Venture Capital Investors, Banks and Financial Institutes Difficulty in identification and evaluation of real entrepreneurs for financial support There is no mechanism for the investor to be able to trust entrepreneurs. Low support of private sector investors of entrepreneurship ideas (7.1%, as opposed to 37% in Brazil) Excessive bureaucracy for financing Associations Lack of attention to the role of associations There are no entrepreneurship events for creating associations. Necessity to establish entrepreneurship development foundations in the province Lack of an association for strengthening connections among entrepreneurs Laws and Regulations Lack of stable legislation and coherency in policy making and uncertain economic conditions The cash contribution of shareholders is subject to 10% tax, while banking loans and facilities are not subject to tax, and this needs to be revised. It is necessary to come to an agreement with Iran Insurance Company for a 20% discount in insurance premium, and allocation of a special branch for entrepreneurs. Excessive and useless laws and regulations Government Organizations Government dominance and weakening of private sector The government should be more active in integration of entrepreneurship ecosystem. Low level of trust to the private sector Weak connection between entrepreneurs and officials
  41. 41. Chapter Four- Challenges This study has reviewed the entrepreneurship challenges and the empty spaces of entrepreneurship with an ecosystem approach. In addition, the entrepreneurship system in four large cities of the country and the special problems of each city have been studied. The identified challenges indicate the followings: strong role of the government in relation to the entrepreneurs and its meddling role instead of a facilitating role; the excessive laws and regulations, which instead of helping entrepreneurs, prevent them from moving ahead, creating challenge and bureaucracy; lack of attention to non-governmental organizations, weak entrepreneurship media; weak relation of venture capital investors with entrepreneurs; unclear system of incubators for supporting companies and real entrepreneurs; lack of attention to entrepreneurship ecosystem; seeing entrepreneurship ecosystem players as independent figures; parallel works of various institutions, etc. Enough studies have not been conducted on entrepreneurship with an ecosystem approach. In case this is done, parallel works would be reduced and proper policies would lead to more achievements, because of creating synergy among ecosystem players. Therefore; similar research and studies need to be conducted in order to promote such an approach. Most of the identified challenges in Iran, which have been presented in the scientific articles and documentations, are environmental challenges caused by macro challenges of business environment in the country and insecure and unsustainable economic conditions. However, we will mention the non-environment challenges, based on our research findings. The cultural and social norms have the most complicated effects on entrepreneurship. These effects include public beliefs and approaches, accepted behavioral norms, mentalities, the dominant psychological patterns related to choosing a job and the values related to multi-dimensional relationships among individuals and the society. The cultural and social norms may have an emotional effect on entrepreneurship. The GEM plan studies the cultural and social norms in 12 countries, mostly in developed countries, from the viewpoint of the following four aspects: 1- Respect of the society for those who start a new business 2- Not being jealous to the successful entrepreneurs 3- Not doing something for the fear of failure 4- Having a level of life similar to others Most of the studies conducted in the area of entrepreneurship point out to lack of sufficient and proper education in the field of entrepreneurship, and conclude that
  42. 42. IEA, All rights reserved / www.iranea.com Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013 43 many problems related to lack of information and awareness may be solved through the required educations, and this requires planning and implementation. These educations might facilitate a suitable cultural ground for entrepreneurship. This is especially important for women, the youth and new businesses. The media such as T.V. may play a major role in this regard and facilitate the entrepreneurship of women and the youth. Moreover, it should be noted that due to the fact that the issue of entrepreneurship is very new in Iran, the related resources such as those in the area of sustainable development, have not been translated to Persian language. The youth need international resources and texts and also the experience of other countries, in order to become more familiar with entrepreneurship. One of the basic measures which needs to be done in this regard is to translate the international resources and to promote educational texts. Other Identified Challenges 1) Diversity of entrepreneurship policy making institutions, which leads to numerous parallel works. 2) Lack of communication network in the area of entrepreneurship, which is based on social capital and formed on a spontaneous basis. 3) Inefficient and outdated entrepreneurship educations which instead of creating motivation, may sometimes make people turn away from entrepreneurship. 4) Lack of indices for identification of real entrepreneurs. 5) Not providing information about entrepreneurship success stories.
  43. 43. Chapter Five- Conclusion Table 5-1 Indices and Challenges of Entrepreneurship in four Large Cities Indices Multiplicity of started businesses Amount of venture capital investments Amount of financial plans supporting started businesses Ease of registration and starting companies Number of entrepreneurship events held Number of entrepreneurs Level of Support of R&D plans Effect (Points) Challenges Multiplicity of policy making bodies Multiplicity of policy making bodies might increase the number of businesses, but on the other hand, the sustainability of such businesses would be endangered, due to confusion in solving the daily problems. On the whole, this challenge effectively curbs the number of businesses in the long-term. (4) The resulted ambiguity and confusion would make entrepreneurs less interested in referring to the venture capital investors. However, the effect is not very great. (2) This does not have a great negative impact, but may cause the increase of this index in the short- term. (2) The speed of this process is severely slowed down, due to the confusion of entrepreneurs caused by this challenge. (5) This does not have a great negative impact, but may cause the increase of this index in the short- term. (3) This would discourage entrepreneurship because of the resulted bureaucracy, but at the same time may promote entrepreneurship from some aspects. However, this would lower the number of entrepreneurs on average. (4) This might even increase the support of R&D projects in the short term, because of identifying the nature of institutions, but does not have a great negative impact. (2) 22 Inefficient entrepreneurship Inefficient educations These educations Educations are not much Efficient education may Efficient education is often followed Effective education may This challenge is not much 20

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