TEHRAN – Despite unilateral sanctions, Iran's startup ecosystem has successfully thrived since the 2010s, with the country being home to more than 6,000 startups across diverse sectors, ranging from financial services to agricultural technology.

In the shadow of sanctions and economic headwinds, Iran is building one of West Asia’s most structured national innovation ecosystems, banking on a science- and technology-led economy to drive long-term resilience and self-reliance, Press TV reported.

At the heart of this ecosystem are Iran’s knowledge-based companies aimed at reducing the country’s reliance on oil and imported technology. With over 4,500 officially registered, these entities function as strategic policy tools.

They aim to close the persistent divide between Iran’s impressive academic output—ranked among the world’s top 15 in scientific publications—and real-world commercial innovation.

These companies focus on critical and strategic technologies, from pharmaceuticals and nanotechnology to aerospace and information and communication technology (ICT), often developing indigenous alternatives to foreign tech.

Iran’s Vice-Presidency for Science and Technology has led this shift by providing financial, legal, and research support to build a local tech economy. Over the past decade, it has introduced policies like tax breaks, venture capital, IP protection, and export support to help entrepreneurs grow.

The country hosts more than 45 Science and Technology Parks, 600 Innovation and Growth Centers, and numerous Innovation Factories—dynamic hubs where startups, investors, accelerators, and R&D labs come together to fuel innovation and growth.

The Pardis Technology Park, east of Tehran, is the crown jewel, billing itself as the “Silicon Valley of the Islamic World.” These parks offer infrastructure, legal support, and preferential taxation for high-tech firms, often co-located with universities.

The flagship Azadi Innovation Factory in Tehran is already the largest of its kind in West Asia.

These facilities aim to solve one of Iran’s fundamental challenges: commercializing academic research. While Iran ranks among the top 15 countries globally in scientific publications, turning that output into market-ready products has historically been a weak link.

Capital remains a major bottleneck; although Iran’s domestic venture capital sector is expanding, international funding is still largely inaccessible. To address this gap, the government-backed Innovation and Prosperity Fund has become the country’s leading source of risk investment.

A small number of emerging private venture capital (VC) funds have begun backing early-stage startups, particularly in financial technology innovations, online commerce, and sustainable clean energy solutions, although overall deal volumes remain relatively modest.

Limitations in financial infrastructure, particularly Iran’s lack of access to the global banking communication network SWIFT, significantly restrict Iranian startups from expanding regionally or internationally.

One of the most valuable assets in Iran’s innovation push is its STEM talent pool. Each year, thousands of engineers and scientists graduate from top universities. To retain them, the state has ramped up support through bodies like the National Elites Foundation and the Scientific Elites Federation, offering housing, grants, and research stipends.

To overcome infrastructure challenges, the Strategic Technologies Laboratory Network enables researchers and startups to share access to advanced lab equipment—an essential resource in a sanctions-affected economy where importing sophisticated machinery is frequently restricted.

But brain drain remains a concern. Many top graduates leave for Canada, Germany, or Australia in search of stable markets, higher salaries, and global collaboration. Officials acknowledge the problem but insist that ecosystem maturity will reverse the trend in time.

While traditional technology sectors continue to be a priority, Iran is increasingly supporting creative and cultural industries. Under the Creative Companies Initiative, startups in gaming, fashion, music, and media now qualify for the same benefits as biotech or software firms.

Officials describe this as a move to blend economic growth with cultural diplomacy, aligning Iran’s soft power with its industrial strategy.

The government is also pushing to internationalize tech exports. Through the Export Development Corridor for Knowledge-Based Products, it has offered over 3,000 export services, from logistics to compliance and trade fairs.

Despite its limitations, the policy architecture around Iran’s knowledge economy is extensive and surprisingly coherent. In a region marked by volatility and resource dependency, few other countries have such an elaborate and institutionalized approach to technology-driven growth.

In short, the technology sector in Iran holds exciting potential to become a cornerstone of economic strength and independence, with a vibrant, promising ecosystem that is resilient and steadily growing.