Recent opinions about the country’s startup ecosystem suggest a shift in the government’s perspective on this field. Apparently, the government is aiming for more exclusivity.
According to IDEA, an article in the Kayhan newspaper titled “Virtual Platforms or Parallel Government?!” reveals the clear stance of the chief editor of the newspaper regarding Iranian platforms that constitute a significant part of the country’s startup ecosystem. The main approach of the article suggests transferring ownership and management of these platforms to “qualified individuals” and entrusting their authority to the system.
The author of this article argues that virtual platforms are evading regulations, committing repeated infractions, and “transforming into a parallel government, undermining the current laws of the system.” Therefore, he deems it necessary to address them and believes they should be “disqualified.”
In light of this perspective and alongside recent statements by Rouhollah Dehghani-Firouzabadi, the Deputy of Science and Technology to the President, about “supporting authentic and revolutionary cultural currents to create strong competition” within the startup ecosystem, concerns have arisen that the government is changing its position towards businesses, startups, and actors in this ecosystem following recent developments.
Hamed Bidi, CEO of Karzar platform, commenting on the significance of the Kayhan newspaper’s article, says: “We have experienced that when Kayhan, especially in the form of the editor’s note, addresses a topic, it won’t remain merely a media analysis; rather, it influences various levels and even guides decision-making. Therefore, in my opinion, this article will be a declaration of a new stance from the government regarding startups.”
He sees this opinion as stemming from the long-standing enmity of the government towards any kind of technological innovation, which is not unique to Iran. According to Beydi, innovative technologies pose challenges to governments in every country, and how governments deal with these innovations depends on whether they choose to suppress them or create an environment for their growth.
Nonetheless, the CEO of Karzar platform emphasizes: “Resistance against the growth of the private sector, a free economy, and innovations has always resulted in bitter outcomes, and ultimately, it’s technology that has prevailed.” Currently, it seems that the government in our country has also decided to address this issue.
Bidi believes that the article published in Kayhan continues the same viewpoint that was raised by Rouhollah Dehghani-Firouzabadi, the Deputy of Science and Technology to the President, last week: the discussions about the self-development of the ecosystem, the entry of authentic and revolutionary forces, the prominence of the issue of hijab in businesses, and the recent Kayhan note together form a puzzle and indicate that unfortunately, there is an intention to practically destroy the private sector of this ecosystem and establish a fully state-controlled economy in this field, just like in sectors such as household appliances and automotive manufacturing, with consistent and unified governance policies throughout the country. The Main Problem: Lack of Understanding the Startup Ecosystem
Given the references made about attracting investment and the functioning of virtual platforms in the Kayhan article, Bidi identifies one of the main issues causing this clash as a lack of proper understanding of the nature and characteristics of startups. He explains that the way the issue is presented in this article and its literary style demonstrate a fundamental lack of comprehension of the world of modern technology and the concept of startups. He attributes part of the ideological animosity towards this field to this reason, as they fail to grasp how a company can experience rapid growth and gain public popularity in a short period. They misunderstand scalable business models or concepts like risk investment, platform economy, and sharing economy, which leads to suspicion and the belief that startups are projects of infiltration or manifestations of Western influence. Consequently, they engage in opposition.
Bidi further points out that platforms have gained significant power in today’s world, making governments worldwide skeptical: Platforms possess power due to their innovations. This phenomenon is global; for instance, Apple challenges requests from American security institutions. Technological innovation inherently causes friction with a government seeking to maintain its position and challenges it.
He describes this characteristic of platforms as “creative destruction” and explains: Throughout the history of innovation, we have the concept of “creative destruction,” where innovations always dismantle parts of the traditional economy and encompass them. Throughout history, governments have responded to this creative destruction in various ways. Instances where governments stood against it ultimately led to their failure, while collaboration and flexibility led to growth.
In the face of powerful platforms, Bidi believes that there is a significant difference between governments and different countries: In some countries, confrontation with platforms is rational and law-based, but in our country, orders for seizure are issued.
A Desire to Return to a State-Controlled Economic Model
The idea of confiscating or transferring ownership and management of platforms to the government or the system, as mentioned in the Kayhan article, indicates a tendency to create a monopoly in the country’s startup ecosystem. Keyvan Jamebozorg, Deputy for Strategic Development at Fanap, addresses this aspect and views it as an inclination towards implementing a state-controlled or governmental economic model within the startup sphere. This reflects a desire to change the management of businesses forcibly. Jamebozorg mentions that this proposal echoes a return to the state-controlled economy we experienced in the 1980s, and it is puzzling why this model is being reintroduced.
Jamebozorg also considers “a lack of understanding of the digital economy ecosystem” as the primary source of these viewpoints regarding the startup ecosystem. He says: “Often, the parts that are not properly understood are accused.”
Continuing, he explains that approaches like changing the management and ownership of platforms or labeling the ecosystem as a “parallel government” effectively accelerate the trend of young people migrating from the country and increase disillusionment.
He views the term “parallel government” used in the Kayhan article as inaccurate and explains: While it’s undeniable that the platform economy has significant cultural, social, and economic impact, an approach based on security concerns and labeling it as a parallel government is a form of bias.
According to Jamebozorg, apart from bias, ignorance of the nature of the platform economy is another issue affecting the perspective on the country’s startup ecosystem. In part of the Kayhan article, it is stated: “These virtual platforms, not all of them, have turned into a parallel government that undermines the current laws of the system without contributing any capital.” The reference to Snapp (a ride-hailing platform) not bringing its own cars and utilizing people’s vehicles for work illustrates that they fundamentally misunderstand the essence and nature of the platform economy. Global platforms similar to Snapp in all countries share the same characteristics, where the economy’s essence is about acting as an intermediary for services and goods between providers and consumers.
Another aspect of the mentioned article revolves around the capital of platforms. Some factions have previously criticized the issue of attracting foreign investment in digital economy startups and speculated about the foreign dependencies of these entities. In response to this, Jamebozorg states: Attracting foreign investment in the country’s platforms is actually a matter of pride. In conditions where foreign investors are unwilling to invest in the country, only the digital economy has managed to attract foreign capital. The fact that foreign investment takes place in platforms doesn’t mean these platforms are handed over to another country or that they create a parallel government.
Jamebozorg believes that in regards to platforms, a smart approach of governance and regulation should be adopted. However, he finds aggressive approaches towards this ecosystem to be incorrect, emphasizing that such confrontations are more harmful than helpful for the country’s economy and society. Those who benefit from making such statements are not the country’s economy or its youth; it’s likely that other parties have vested interests in these viewpoints. He hopes that the government itself will provide an appropriate response to these claims.
No Comment! Be the first one.