Digital revolution remains a dream in Iran

Iran’s self-proclaimed Silicon Valley stands on the road to Damavand, the tallest mountain in the country. Set up in 2005, its name is ambitious: Pardis, a “paradise” for technology.

Pardis is where Teheran just hosted the sixth International Innovation and Technology Exhibition, which opened on May 23.

More than a year after sanctions imposed on the country were lifted, technology and innovation may well be the key to Iran’s economic recovery.

On July 14, 2015, Iran and the P5+1 group of world powers (the US, UK, France, China, Russia and Germany) signed the historic nuclear agreement that led to the lifting of sanctions.

A day after the so-called “implementation day” of the deal — January 17, 2016 — President Hassan Rouhani, who recently secured a second term announced his number one objective was to cut the Iranian economy’s “umbilical cord” to oil revenue.

The president’s main challenge 16 months later is the nation’s high unemployment rate. It stands at 12.7 per cent overall but is 27 per cent for youth and more than 44 per cent among women.

Reducing unemployment means boosting the economic agenda. Rouhani’s pledge to look beyond oil as the main source of government income is the first step to diversifying the economy and giving impetus to job creation in the country, especially among young educated Iranians.

Iran is a nuanced start-up incubator, with a range of companies such as Takhfifahn, the local version of Groupon; Digikala, the Iranian version of Amazon; ZarinPal, the Paypal twin in Iran; and Expedia’s Iranian model Zoraq.

Local hi-tech firms and entrepreneurs, specialised in software creation or online app services, such as Tap30 (the Persian Uber), could become the connection between the government’s openness to innovation and tangible results in terms of jobs for the youth.

But this rosy picture overlooks several obstacles. Even though sanctions have been removed, Iran’s economy has yet to deal with structural problems.

Despite the president’s rhetoric, programme for improving internet infrastructure and insistence on expanding 3G and 4G services (together with broadband connections), start-ups face connectivity issues, mainly due to access restrictions and internet filters.

And even though the Iranian communication ministry’s 2015 budget was its largest ever (well over $80 million), the overall amount may be cut by 16.5 per cent this year.

What’s more, the country’s ultraconservatives fear too much internet freedom. Supreme Leader Ali Khamenei fosters the idea of enlarging the local knowledgebased industry (and support for Iranian high-tech companies) because it chimes with his idea of the so-called “resistance economy” (a term that emerged as a response to the sanctions with the objective to strengthen the Iranian economy).

But free internet with connections to global social media is seen by hardliners as a threat to the moral values of the Islamic republic, where about 60 per cent of the population uses the internet.

Before the lifting of international sanctions, Iran’s hi-tech industry was strongly undermined by the lack of access to advanced technology. Many companies could not buy necessary components for their work and exports of Iranian products were prohibited.

Relying exclusively on oil revenues and open up innovation and technology will require accepting changes in civil liberties and transformations across the society, trusting local entrepreneurship, and breaking the legal barriers on civil rights and freedoms, internet access and filters. Iranian start-ups would benefit from these changes.

Although the country has taken a few steps forward, Iranians are still waiting for a real, free digital revolution. Young Iranians seem to be ready for a domestic technological upheaval. But are local policymakers prepared to allow the resulting process of social transformation? —The Conversation

The president’s main challenge 16 months later is the nation’s high unemployment rate.