Innovation and Creation of New Enterprise in Iran

Introduction

The role of innovation in today’s economic development is essential so that many small and medium enterprises are taking their policy based on innovative activities. With respect to shifts in the economic environment causes to increase universal global competition. In order to, SMEs survive in the current business requires drive their policy with innovation. In fact, the competitiveness of an enterprise is based on availability of knowledge as well as its application in successful innovations. In recent years, Iranian small and medium units industries have not been capable of competition in global market even in domestic marketplace. It has been due to certain obstacles in the external national infrastructure for innovation and lack of entrepreneurial skills. In order to SMEs will be capable to decrease the risk becoming uncompetitive market government of Iran requires the minimization of barriers to innovation by changing some of its policy.

This essay will be focus on main factors that are barriers to innovation in Iran. Moreover, it will examine what factors would contribute to enterprise creation in Iran and then concludes with certain recommendations for future government policy.

Role of SMEs in Iran

The role of economic investment has been increasing in recent years, particular the role of small and medium enterprise. SMEs are playing essential role in economy of Iran as they take the 94 percent of Iranian industrial units [1]. SMEs define in Iran as autonomous business that employs less than 250 employees (Iranian commission, 2003). Moreover, they account as main source of employment by 43 percent of whole industrial employment [2]. Due to this potential Iran has adjusted its economic policy based on expanding theses industry units and formulate their policy based on increasing and empowering small industries. Small and medium enterprises significantly have assisted Iran’s economic in creating new jobs and enlarging economy in recent years. In other words, these commerce units today have notably impact on various and essential variably such as economic growth and moreover minimizing the pandemic unemployment crisis. However, small and medium enterprises have suffered from certain obstacles, international Embargo, restriction and lack of entrepreneurial skills that have caused to decrease the scope of small units industry in recent years. As problems and restriction have leaded to barriers to innovation and thus, resulting in become uncompetitive in the marketplace. As, it is undeniable fact that innovation and entrepreneurship play with essential role in firms competitiveness. In reality, Entrepreneurship is the process of cater value via foundation of a unique complex of resources so as to make a profit. By innovation, it is meant to make a new and efficient opinion and prompt shift to business to utilize it within