Science, Technology and Innovation Policy Review: Iran

The Islamic Republic of Iran has made significant advances in research, higher education and technology since 1990. During the past two decades, Iran has committed itself to the development of a dynamic national innovation system and has been moving steadily towards a knowledge- and innovation-based economy.

UNCTAD collaborated with Iran in the preparation of an STI Policy (STIP) Review in 2005 - an opportune time of policy reform, when its policymakers showed a growing interest in science, technology and innovation. Most of the issues and challenges raised in the 2005 Review have been dealt with through different policy measures and initiatives. This STIP Review can be considered, to some extent, as a neutral and unbiased assessment of the effectiveness of government policies with regard to STI development and a pointer to the way ahead.

There have been a number of improvements in Iran during the period 2005-2015, in scientific research and publishing, higher education, exports, and ICT infrastructure. Regarding structural and institutional changes related to STI, a number of new policymaking institutions have been created over the past decade. Since 2005, policies and initiatives have led to the emergence and reinforcement of technology- and innovation-intensive entities, such as new technology-based firms, start-ups and knowledge-based firms. A large pool of young, educated and skilled labour and a growing research capacity have emerged as the country's most important assets today. They now need to be fully leveraged for rapid industrialization and the transition to a knowledge-based economy.

Compared to the situation during the previous STIP Review, Iran has faced severely tightened international sanctions. Sanctions have had multiple macro effects besides limiting international transactions. They sparked a drive for STI development and created support for a push to adopt an indigenous development approach in the country, and led to a widely shared commitment to build a comprehensive and dynamic innovation system and a knowledge-based economy. The Review identifies three waves of STI policy development in Iran since the 1990s. The first wave focusing on developing higher education started in 1990. A second wave focusing on developing research and technology (including emerging technologies and their required infrastructure) started in 2000. The third wave marking a transition towards an innovation and knowledge-based economy started in 2010.

Overall, despite the significant progress made, Iran faces a range of challenges in several areas, including raising productivity, improving the business environment, modernizing an ageing infrastructure (particularly in energy and transport), addressing issues related to the environment and climate change, stabilizing inflation, stimulating economic growth, creating jobs and raising gross domestic product (GDP) per capita.

The Review concludes that a new approach based on Iran's reintegration into the global economy will be confronted with a complex mix of opportunities and challenges. Iran has good potential to develop strong STI capacity and leverage it to support sustainable development. To realize this potential, policy reforms are needed. The Review puts forward recommendations to enhance the country's STI policy efforts. These recommendations include measures to strengthen the governance of the innovation system as well as address specific policy issues considered barriers to STI development.