Innovation policy, scientific research and economic performance: The case of Iran

Motivation Why, despite substantial investment in science and technology infrastructure during the last two decades, has Iran performed relatively poorly in terms of innovation and economic output? The investment has been wide‐ranging, from the inclusion of science and technology in the National Development Plans to the impressive growth in the number of science and technology parks and incubators. Iran is among the top five countries in terms of science and engineering graduates, and Iran's scientific publications are among the world's fastest‐growing. Purpose This study attempts to discover the reasons for this poor performance despite the investment. Approach and Method This is a qualitative study which tries to explore the research question through extensive archival data and semi‐structured interviews. We also use an inductive bottom‐up approach for data analysis, including open coding of collected data. Findings Our first level of analysis, based on National Innovation Systems studies, will show that there are two main causes: (a) Iran's industrial policies have been unsuccessful in encouraging domestic firms to export or exposing them to international competition. As a result, there are no meaningful incentives for them to approach technological frontiers by exploiting domestic science and technology infrastructures; (b) whereas universities and research centres have played an important role in the catch‐up process of other newly developed countries by engaging practically with the problems that face their societies, Iranian universities and research centres have become article‐publishing factories. Our second level of analysis will show that behind these two causes are other important latent factors: the power of incumbents and their efforts to maintain the status quo, and the “rules of the game” in the fields of science and technology which have discouraged hands‐on engagement. This study analyses strategic action literature, and proceeds to emphasize the role of incumbents and those “rules of the game” in inhibiting innovation and economic success. Policy Implications Effective innovation policy is not just about investing in science and technology infrastructure, but also about industrial policy, exposing domestic firms to international competition, overcoming entrenched interests and changing paths of career advancement in science and technology so that scientists are less inclined to pursue theoretical work and are encouraged to collaborate closely with business to solve practical problems.