By Setareh Behroozi

Startups, spark of hope for Iran’s entrepreneurship ecosystem

June 20, 2018 - 11:27

TEHRAN -- Entrepreneurship ecosystem is a term which we hear about very much these days.

According to the Global Entrepreneurship Index (GEI) report released by the Global Entrepreneurship and Development Institute (The GEDI Institute) in January 2018, Iran ranks 72 amongst 137 countries in 2017 and had a 27% improvement in comparison with 2016.

Iran saw overall score improvements of more than four points over the previous GEI, and is among the top ten biggest gains in score globally for the GEI 2018.

According to the report, ‘startup skill’ is Iran’s strongest area and ‘risk acceptance’ is its weakest. 

Bureaucratic incompetence, unstable domestic market and state-run organization inefficacy are considered as main obstacles for entrepreneurs in Iran, however, with the emergence of startups in Iran, the entrepreneurship ecosystem experience a new form and method.

Startups in Iran open new windows to young entrepreneurs to increase their chance by claiming their market share

Startups, as entrepreneurial ventures which are typically newly emerged businesses, open new windows to young entrepreneurs to increase their chance in the market.

By claiming their market share, they can develop job creation and more people are involved in their business.

Maybe this is the way, which leads to encourage privatization and to encourage private sector to play its role in national economy.

Although direct support and shareholding of state-run organization and government would definitely harm entrepreneurship ecosystem, one cannot undermine the role of government to provide infrastructure and to facilitate their presence at the market. 

Global Entrepreneurship Index 2018: What does it indicate?
The Global Entrepreneurship Index is a composite indicator of the health of the entrepreneurship ecosystem in a given country.

According to GEI 2018, the GEI measures both the quality of entrepreneurship and the extent and depth of the supporting entrepreneurial ecosystem.  A total of 14 components are identified for the health of entrepreneurial ecosystems, identified data to capture each, and used this data to calculate three levels of scores for a given country: the overall GEI score, scores for individuals and institutions, and pillar level.

In 2018, GEI scores have improved globally by 3% on average since last year’s Index. 
The Middle East and North Africa region demonstrates strength in Product Innovation and Risk Capital and the Asia-Pacific region on average scores best (and is improving) in Product Innovation. While, Europe shows stable high scores in Technology Absorption and Internationalization, and region’s average score on Startup Skills has recently climbed into the same league.

The conclusion – certain aspects of being an entrepreneur have become a bit harder, but entrepreneurs are more than meeting this challenge with new skill acquisition and improvements in innovation capacity.

While the Middle East and North Africa (MENA) region shows greatest strength in the areas of Product Innovation and Risk Capital, the region is bringing new products to market and integrating new technology, and also providing the capital to help businesses grow. 

The region’s lowest average scores are in the areas of competition and risk acceptance, as large firms dominate many economies in the region and businesses face higher risks in many MENA countries than in other areas.


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