Iran entrepreneurship ecosystem report

IEA, All rights reserved / www.iranea.com
Iran Entrepreneurship Association Entrepreneurship Ecosystem in Iran – Winter 2013
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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....................................... 15
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....................................................................................... 18
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 ............... 28

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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

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List of Figures and Tables
FIGURE 1-1 COMPLEXITIES AND DEPENDENCIES OF ENTREPRENEURSHIP ECOSYSTEM... 9
TABLE 3-1 MASHHAD ENTREPRENEURSHIP ECOSYSTEM ANALYSIS............................. 30
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

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Executive Summary
The world reports in the area of entrepreneurship, and a comparison between Iran and
other countries, in addition to the descending key indices in Iran during the past years,
clearly shows that all the players in the field of entrepreneurship are required to be
determined to improve the existing situation and play an effective role, in this regard.
For this reason, the Iranian Association Entrepreneurship Association conducted a
study about 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
Association 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, studying it in details.
The Association 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) Not providing information about successful entrepreneurship stories;
3) Large number of policy making institutes; 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 such patterns.
Alireza Omidvar

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Chapter one- Background
1-1 Introduction
The economic, industrial, social and cultural conditions of the country call for new and
different patterns and solutions for solving the problems and difficulties. The results of
research indicate that there is a positive relation between the economic development
and number of entrepreneurs in each country, since any country, with a high number
of entrepreneurs, enjoys stronger commercial and economic stimulators.
In this research, we aim to study entrepreneurship in Iran, with an ecosystem
approach. In this approach, the entrepreneurship players and their activities in the
subsystems of this ecosystem in entrepreneurship situation are studied. In fact, the
success of entrepreneurship in Iran depends on a positive interaction among these
plays, and avoiding parallel works among them.
In studying the entrepreneurship situation with an ecosystem approach, in addition to
analyzing the activities of each part of 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 entrepreneurship situation 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?

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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 theory

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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:

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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

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• 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 improved, their

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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.

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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.
2-1-1-1 Policy Making and Policies of the Ministry of Labor in the area of
Entrepreneurship Development or Creation of Entrepreneurship Environment

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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
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.

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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
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

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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.
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

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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
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.

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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
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
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

18
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.
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

19
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. Four of
these education centers are introduced here, among which are Parto Social
Entrepreneurship School and Khorshid Entrepreneurship School.
A) Faculty of Entrepreneurship

20
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)

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.

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 loans.
In fact, these institutes act as a dealer and connect the stock sellers to the buyers.

23
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

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.
2-4-3-5 Sharif Export Development Research and Technology Fund
1 - www.mtfn.ir/about.php
2 - www.hitechfund.ir/fa

25
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.

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 way,
and reportedly there are only a few private accelerators, without further information.

27
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 competitions
and non-competitions. The competitions include identification of top entrepreneurs,
best business designers and the most significant supporters of technology creation.

28
The non-competition section, however, includes exhibitions, idea exchange and
educational seminars.
2-8-2 Start-up 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.
Chapter Three- Entrepreneurship Ecosystem in Four
Large Cities

29
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 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

30
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%).
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

31
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,
Banks and Financial
Institutes
- The Research and
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
- A volatile business environment does
not welcome sustainable investment.
- The Fund only provides financial
services to entrepreneurs.
- There is no mechanism for the
investor to trust entrepreneurs.

32
Entrepreneurship
Ecosystem
51% (Azad University and
private companies)
- Success story: Jahan
Andisheh has been launched
with the support of this Fund.
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
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

33
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
Entrepreneurship
Ecosystem
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

34
Entrepreneurship
Ecosystem
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 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

35
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
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.
- The government sector is still in
charge of education, while private

36
Entrepreneurship
Ecosystem
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
Organizations
-The government has approved
formation of entrepreneurship
consulting and education
- Enough attention is not paid to
women entrepreneurship, despite the
fact that salary receiving job

37
Entrepreneurship
Ecosystem
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.
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

38
Entrepreneurship
Ecosystem
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
-Granting one billion Rials of
interest-free facilities for women
entrepreneurs of Fars Province
-Granting facilities by most of the
banks
- Excessive bureaucracy for
receiving capital from investors

39
Entrepreneurship
Ecosystem
-Granting free loans in the area of
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
- 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)

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.

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
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
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

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
many problems related to lack of information and awareness may be solved through
the required educations, and this requires planning and implementation. These

43
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.

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

45
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)
Inefficient
entrepreneurship
education
Inefficient
educations
reduce interest
in starting up
businesses.
(4)
These
educations
should provide
information about
financing
resources, but
they usually fail
to do so.
(2)
Educations
are not much
effective in
this regard,
but they
might
increase the
chance of
entrepreneurs
in finding
financial
support by
enabling
them to
prepare
professional
business
plans.
(2)
Efficient
education may
greatly help
entrepreneurs
in the process
of starting up a
business.
(4)
Efficient education
is often followed
by attractive
events.
(3)
Effective
education may
train
entrepreneurs,
and otherwise
could lower
willingness to
entrepreneurship.
(4)
This challenge
is not much
effective on
this index.
(1)
20
Lack of
entrepreneurship
indices
This challenge
might be
effective in
assessment of
the number of
started
businesses,
which have a
real
One of the great
challenges of
venture capital
investors is the
lack of
knowledge and a
clear definition of
entrepreneurs.
(4)
This is a
serious
challenge in
supporting
the plans.
(4)
This is not
much effective
on the ease of
starting
businesses.
(1)
This challenge is
not much effective
on this index.
(1)
This challenge
has the greatest
impact on
estimating the
number of real
entrepreneurs
and identifying
them.
(5)
This challenge
is not much
effective on
this index.
(1)
20

46
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)
entrepreneurship
nature.
(4)
Lack of a
coherent
communication
network
A coherent
communication
network usually
leads to the
growth of
businesses.
(4)
This challenge is
greatly effective
on this index. In
case, there is a
coherent network
between
entrepreneurs
and venture
capital investors,
the efficacy of
this index will
highly increase.
(5)
This
challenge is
greatly
effective on
this index. In
case, there is
a coherent
network
between
entrepreneurs
and investors,
support of
plans would
highly
increase.
(5)
A coherent
communication
network might
decrease
bureaucracy
by providing
transparent
information
and increase
ease of
starting
businesses.
(4)
A coherent
communication
network would be
followed by
various effective
entrepreneurship
events, and would
be very effective
in creating events.
(4)
A coherent
communication
network might
increase interest
and intention of
entrepreneurship
by creating an
effective relation
among
entrepreneurs.
(4)
A coherent
communication
network might
clearly define
the necessity
of research
and
development
plans, and
consequently
attract the
support of
related
officials, but is
not much
effective.
(2)
28

47
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)
Weak
information
dissemination
regarding
entrepreneurship
success stories
Providing
information
about success
stories would
lead to high
number of
businesses by
creating interest
and motivation in
the society.
(3)
Success stories,
especially the
local stories
might encourage
the venture
capital investors
to support
entrepreneurship.
(4)
Success
stories might
increase
support of
plans.
(4)
This challenge
is not effective
on this index.
(1)
Success stories
might develop the
related events,
and the
willingness to
create events
which highlight
such success
stories.
(4)
Success stories
would cause
multiplicity of
businesses by
creating interest
and motivation in
the society.
(4)
Most of the
ideas of
success
stories have
been
developed
through
research and
development
plans, and
therefore
highlight the
importance of
such research.
(3)
23

Table 5-2 Coding System of Challenges
Effect Points
Very low (ineffective) 1
Low 2
Average 3
High 4
Very high (very effective) 5
Table 5-3 Ranking of Challenges Based on Research Findings
Challenge Challenge
Ranking
Lack of a coherent communication network 1
Weak information dissemination regarding entrepreneurship
success stories
2
Multiplicity of policy making bodies 3
Inefficient entrepreneurship educations 4
Identification of real entrepreneurs 4

49
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14- Danaei Fard, Hassan, Forouhi, Mahshid, Salehi, Ali, Entrepreneurship
Promotion in Iran: Analysis of the Government’s Role, 2007
15- Kordnaeij, Zali, Enrepreneurship Development Solutions in Iran, 2007

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2) Foreign References
1- Jude Valdez, University of Texas at San Antoni,(1994),the entrepreneurial
ecosystem: toward a theory of new business formation
2- Avnimelech G. and Teubal, M. (2008) From direct support of business sector R&D/
innovation to targeting venture capital/private equity: a catching up innovation and
technology policy life cycle perspective Econ. Innov. New. Tech. 17(1&2): 89-107
3- Acs, Z., Armington, C. (2006),. Entrepreneurship, Geography and American
Economic Growth. Cambridge: Cambridge University Press
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Growth Entrepreneurship. Babson Park :Babson College
5- Bell, Judit. (1997). Como realizar um projecto de investigação. Lisboa, Gradiva
6- Bell-Rose, S., Payzant, T. (2008), “The Case for Entrepreneurship Education”.
ducation Week, August
7- Bok, D. (2003), Universities in the Marketplace: The Commercialization of Higher
Education. Princeton, NJ: Princeton University
8- Brown, J. S., Duguid, P. (2000), Mysteries of the region : knowledge dynamics in
the Silicon Valley. In Lee, C. et al. (eds.) The Silicon Valley edge: a habitat for
innovation and entrepreneurship. Stanford: Stanford University Press,16-39

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