MYTH vs. FACT: Technology in Iran
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By AIC Research Associate Tristan Gutbezahl
MYTH: Iran’s technology sector is primarily focused on military capabilities, especially drones, ballistic missiles, cyber weapons, and nuclear warheads.
FACT: Iran has a thriving civilian technology sector that has made considerable progress in the fields of biotechnology, nanotechnology, renewable energy, and artificial intelligence. The country is also home to a dynamic startup ecosystem.
Background
In the West, Iran is commonly perceived as being a technologically backward Middle Eastern society with little innovative prowess. Typically, it is only when describing Iran’s military capabilities that US media or Middle East pundits even discuss the country’s technological capabilities. This narrow focus, however, belies the country’s long and illustrious history of innovation and ongoing role as a technological leader in the region.
Historically, Iran can be credited with many innovations that date back as far as the Achaemenid Empire (550BC – 330 BC), such as air-conditioning, irrigation, and windmills. Militarily, ancient Iranians are credited with inventing the “cataphract,” a heavily armored horseman that acted as shock cavalry and possibly an early precursor to the medieval European knight.
During the 20th century, Mohammed Reza Pahlavi was famously obsessed with military technology, spending exorbitant sums on American weapons to hedge against Soviet encroachment and Arab aggression. It was under his reign that Iran began developing nuclear technology, initially as a source of domestic energy and later for the pursuit of a nuclear weapon. Though the Shah was personally obsessed with advanced weaponry, he also laid the groundwork for advances in civilian technology. He personally founded what is now the Sharif University of Technology in 1966, which continues to be one of the preeminent technical universities in Iran.
The Islamic Republic, despite Western focus on its religious and expansionist goals, is equally as invested in technological innovation as its historic predecessors. Crippled by sanctions and seeking to wean itself off hydrocarbons, the Iranian government emphasizes the power of the “knowledge economy”: a system of production that favors intellectual and human capital over traditional sources. In keeping with its strategy of self-reliance, informed by the international isolation imposed on the country during the Iran-Iraq war, and later due to nuclear related sanctions, Iranian leaders have placed special emphasis on the development of indigenous innovation.
Despite international isolation, Iran punches well above its weight in terms of research and development. Indeed, Iran rose on the World Intellectual Property Organization’s (WIPO) annual Global Innovation Index from 104 out of 129 countries in 2012 to 53 in 2022. Likewise, the share of Iran’s GDP in technology grew from 3.8% in 2016 to 6.9% in 2020. Though this is well below the global average of 22.5% of GDP, the technology industry’s growth ranks much higher than Iran’s other economic sectors within the same time frame. Between 2014-2017 Iran’s knowledge-based exports grew five-fold before tapering off in 2018. Likewise, knowledge-based firms have grown from 3,000 in 2016 to over 6,300 in 2021.
Emerging Technologies
In spite of its international isolation and illiberal government, Iran has made impressive progress in emerging technologies over the past several decades. The government has gone to considerable lengths to foster an innovative environment via public funding, educational initiatives, and collaboration between public and private actors. Listed below are a few areas in which Iran is currently excelling:
Biotechnology
Iran has long championed its position as a key innovator in biotechnology, especially among its peers in the developing world. The Esteemed Razi and Pasteur public institutes, both founded in the 1920s, have continued to be regional leaders in vaccine development and genetic engineering. The Razi institute in particular holds the distinction of being one of the first organizations in the world to produce poliomyelitis vaccines. Indeed, Iran’s formidable pharmaceutical industry has allowed the country to achieve near self-sufficiency, having produced 95% of its own domestic medications. Academically, Iran’s output in publications on health science increased by 64% between 2012-2018.
Not to be outdone by their public counterparts, private firms have more recently begun to contribute to advances in biotechnology. The company CinnoGen is one of only three firms worldwide that have developed a generic version of the multiple-sclerosis treatment interferon beta-Ia. Likewise, their investee PersisGen is conducting cutting-edge research on the regenerative properties of stem cells as well as developing top of the line medical equipment for domestic use. Considerable progress has also been made in applying biotechnology to agricultural use, particularly within the realm of genetic engineering.
Though the COVID-19 pandemic wrought untold devastation in Iran, the coordinated public and private response yielded considerable innovation in public health. The CoronaPlus campaign gave startups financial incentives to invent and produce Personal Protective Equipment during the height of COVID. In addition, Iran has seen a massive increase in domestic mobile health apps in the past 5 years, which only grew during the pandemic. This has been facilitated by a massive increase in mobile phones with internet access, which rose from 40% in 2015 to 70% in 2020. Public resources continue to be heavily invested into the biotechnology sector despite international fears over the potential production of biological and chemical weapons.
Nanotechnology
One of the more intriguing areas of Iran’s innovation ecosystem is its remarkable investment and progress in nanotechnology. Nanotechnology is the study and application of matter at the nanoscale, which is defined as being 1 to 100 nanometers (for reference, there are 10,000,000 nanometers in one centimeter). Over the past several decades, nanotechnology has led to exciting breakthroughs in chemistry, physics, and data science.
Iran has wasted little time in becoming an international leader in the field. The country was ranked as the fourth leading nation in nanotechnology in 2020, having published 11,546 academic articles on the subject that same year. Likewise, Iranian nanotechnology scientists have filed 307 patents over the past 15 years and set 123 nanotechnology standards since the end of 2021. Iran's technical diversity in the field remains impressive: its nanotechnology products focus on construction (42%), oil (17%), and car manufacturing (13%). Perhaps Iran’s most admirable achievement in the field has been its use of nanotechnology to purify water from the Karun River, the pollution of which remains a great stain on Iran’s environment. Others include the production of nanofiber for medical use, alumina fittings, and pharmaceuticals used to treat HIV-AIDS and arthritis.
To maintain momentum and spur innovation, the Iranian government has invested considerable capital in cultivating a youth culture around nanotechnology. The establishment of the Iranian Nanotechnology Laboratory network in 2004 marked the beginning of the public commitment to the technology. The government continues to sponsor nanotechnology olympiads, festivals, and competitions at the university level since the establishment of the youth-oriented “Nanoclub” in 2008. Today, Iranian nanotechnology is overseen by the Iranian Nanotechnology Innovation Council (INIC), which offers research facilities and market incentives for private firms in the field.
Renewable Energy
Though Iran has long been reliant on hydrocarbons, particularly petroleum, as its primary export, the country’s government has instigated a remarkable shift toward renewable energy. Iran’s policy mirrors the Middle East’s broader shift away from fossil fuel dependency as the fight against climate change intensifies. Though Iran is likely to soften its international image by transitioning to renewables, the country stands to gain economic benefits as well. Tehran has long sought to avoid being at the mercy of global energy prices while being able to independently satiate its own domestic electricity consumption. This will only increase in significance as climate change raises global temperatures, which will require increased air conditioning for an already politically agitated population. The UN ranked Iran 86 out of 166 countries on the 2023 Sustainable Development Report, indicating that the country is moderately improving its policies regarding climate action and responsible consumption and production.
Iran pledged in January 2022 to add 10GW of renewable power to the country’s energy portfolio by 2026, in keeping with its long-term goals of 30GW. Article 38 of the constitution now mandates that 20% of all electricity is to be sourced from renewable methods. Geographically, Iran is endowed with a landscape and climate remarkably conducive to renewable energy; in fact, central Iran has been named one of the most promising areas in the Middle East for wind power development. Though the country’s primary renewable source remains hydropower, the production of all other renewable sources of energy (primarily wind and geothermal) has doubled since 2017, while comprising only 900 MW, amounting to 1% of energy demand. While Iran’s renewable energy production lags behind global averages, its potential is promising as the country continues to inject fiscal and human capital into the sector.
Artificial Intelligence (AI)
As advancements in AI continue to explode on the international scene, Iran has been keen to capitalize on the technology’s ascent and establish itself as a leader in the field. The government recently announced that it plans to be a leader in the market by 2032. Though still far off from achieving this goal, the country has made significant progress. Iran’s greatest industry success thus far is the navigation app BALAD, which uses AI to chart driving routes. The SURENA IV robot is the current darling of Iran’s AI sector, being able to effectively mimic human poses and conduct simple operations such as writing.
While Iran has made admirable progress in the application of AI for civilian purposes, serious concerns remain over the country’s weaponization of this potentially dangerous technology. The pursuit of autonomous suicide drones has caused trepidation among regional powers, especially given Iran’s recent use of the technology against civilian targets in Ukraine and oil facilities in Saudi Arabia. Furthermore, reports of Iran exploring ways to monitor dissidents vis-a-vis facial recognition is only heightening fears of further domestic repression, especially against women.
Start-Up Sector
Iran boasts one of the most exciting start-up ecosystems in the Middle East, trailing only Israel and Saudi Arabia. In2014, there were 150 startups in the entire country; by the following year that number had grown to 400 in Tehran alone. Though the vast majority of Iranian startups are based in the information technology sector, the government has strongly emphasized the diversification of knowledge-based fields, encouraging young innovators to explore waste-management, agriculture, and sports medicine. The sector’s relative success is a surprising product of Iran’s international isolation. The country’s inability to obtain Western apps and services due to sanctions has forced its innovators to develop its own products. Economically, the exit of foreign companies has allowed indigenous startups to capture larger market shares and protect their burgeoning innovation.
Indeed, Iran’s science and technology workforce remains prolific. The country ranked third on the Global Innovation Index in 2019 for percentage of the labor force employed in science and engineering. This can be attributed to the remarkably high proportion of youth in Iran’s population; indeed, 62% of start-up founders are between the ages of 25-35. Though impressive, much of the country’s college graduates remain without jobs due to a stubbornly high unemployment rate and debilitating credentialism.
The government has invested a considerable amount of its resources into growing the sector, with a particular focus on domestic innovation. These efforts are most visibly observed with the establishment of science parks, tech incubators, and innovation accelerators on university campuses. These initiatives are designed to create intellectual spaces where young college graduates can collaborate and share new ideas to spark innovation. Special success has been attributed to Pardis Technology Park in Tehran, which has been dubbed “The Silicon Valley of Iran.”
Despite supporting startups with educational initiatives, little has been done to assist the firms financially. To compensate for the lack of funding, the government has attempted to assist startups in cheaper, more creative ways. Owing to the sclerotic nature of the Iranian bureaucracy, the central government has actively helped start-ups navigate the maze of red tape. The National Union of Online Resources was launched in 2017 to directly assist start-ups in solving regulatory issues and a parliamentary working group was created in 2022 to address the root of the problem. Still, 75% of Iranian startups and entrepreneurs have claimed that they received no support from the government, calling the allocation of resources into serious question.
Challenges to Innovation
The reimposition of sanctions after the US withdrawal from the JCPOA has severely hampered growth of the start-up sector and public research in the sciences. Perhaps the most consequential effect of sanctions has been the near-wholesale withdrawal of foreign investors, who have left the country out fear of violating sanctions. This has negatively affected Iran's economic plans, such as its push to transition to renewable energy (e.g. contracts with European companies to build solar power plants in the country were voided in 2018 due to the resumption of sanctions). Likewise, Iran has been unable to import needed technical components from the US and its European allies for startups and public firms to continue innovating.
Moreover, reduced internet access has prevented many in the start-up sector from reaching potential clients and exploring new technology applications. This has caused many Iranian start-ups to move outside of the country, contributing to the ongoing brain drain that is currently ravaging Iran. Sanctions have also forced many Iranian scientists and innovators to file patents with international organizations instead of their domestic counterparts, hindering the country’s ability to set global standards.
Though sanctions are regularly touted as the greatest hindrance to Iranian innovation, the government is also culpable. Iran only spent 0.83% of GDP on research and development in 2019, a collective failure on the part of public and private actors. Perhaps Iran’s most egregious self-inflicted wound is the acceleration of the country’s brain drain vis-a-vis repressive policies. Systematic crackdowns on dissent, exacerbated after the Mahsa Amini protests in 2022, coupled with the government’s continued inability to meritoriously reward talent, has only further incentivized Iran’s best and brightest to leave the country; 500,000 Iranians emigrated between 2010-2020. In fact, a recent World Bank report estimates that Iran loses nearly $50 billion a year due to emigration. The government, despite having spent significant political capital on improving its innovation sector, appears to be its own worst enemy by liquidating the country’s most precious resource: its people.
Conclusion
Iran’s domestic technology sector is diverse, innovative, and riven with domestic and foreign challenges. The country’s international isolation and geographic position in a historically hostile region has motivated the country to pursue radical self-dependence. This can be readily observed in the country’s success in spurring indigenous innovation; though sanctions have severely reduced the country’s resources, it continues to produce cutting-edge technologies in key emerging sciences. Indeed, while the country is endowed with remarkable natural resources, its chief advantage remains its young, ambitious population. However, this is being jeopardized not only by declining Iranian fertility, but by the government’s brutal crackdown on dissent and political expression. In this way, Iran is squandering its potential by simultaneously agitating its neighbors and making life unbearable at home for its future innovators. With its abundance in natural and human resources, one could only imagine the technological potential of an Iran that rejoined the international community and offered a safe and flourishing homeland for its citizens.
