Obstructive laws and regulations: a barrier to the flourishing of the knowledge-based ecosystem

The country’s knowledge-based ecosystem, as the driving force of the modern economy, plays a key role in creating jobs, developing technology, and increasing non-oil exports. However, one of the biggest challenges facing this industry is the multitude of cumbersome regulations and complex administrative processes that not only slow down the growth of knowledge-based companies, but also weaken the incentive for innovation and entrepreneurship.

Numerous regulations, incomplete implementation

According to the Public Relations Department of the Iranian Knowledge-Based Organizations Association, the Chairman of the Board of Directors of the Iranian Knowledge-Based Organizations Association stated that, in recent years, numerous laws and regulations have been passed to support knowledge-based companies, and said: “From the law on supporting knowledge-based companies and institutions to various tax and customs regulations, all of them are designed to facilitate the activities of these companies. But in practice, the multiplicity and sometimes contradiction of these regulations, instead of facilitating, has created a heavy administrative burden and a waste of time and resources.

Afshin Kolahi clarified: For example, in order to receive a tax exemption, a knowledge-based company must obtain a license from at least 5 different institutions and submit dozens of forms and reports. This process sometimes takes several months and wastes the energy of technical and management teams on administrative matters instead of focusing on innovation.

He went on to point out the key challenges in this area and said: The multiplicity of decision-making authorities for knowledge-based companies involved in the process of obtaining licenses and support is an important issue. For example, to obtain a license, they must interact with various institutions such as the Ministry of Health, the Presidential Vice-President for Science, the Tax Affairs Organization, and the Customs. This fragmentation causes confusion and increases administrative costs.

Kolahi cited long, opaque, and time-consuming administrative processes as other challenges, adding: These issues are especially seen in areas such as patent registration, obtaining export licenses, and attracting capital, which are one of the biggest obstacles to the growth of knowledge-based companies.

In his opinion, the lack of flexibility of existing laws is another challenge. Because many existing laws and regulations are not compatible with the unique characteristics of knowledge-based companies (such as the need for high speed and frequent changes in business models).

The chairman of the board of directors of the Iranian Knowledge-Based Organizations Forum considered parallel supervision and the fact that sometimes a single issue is inspected by several different institutions as other challenges of existing regulations in the country, emphasizing: This causes a waste of resources and creates stress.

He went on to mention the slowdown in innovation, the flight of human capital from the country, and the reduction in the competitiveness of knowledge-based companies compared to global competitors as effects of these conditions. He suggested solutions to address and improve the current situation, saying: “Establishing a single headquarters to coordinate between various institutions related to knowledge-based companies can prevent parallel work and confusion.”

Kolahi continued: “Using digital platforms to provide licenses and services to knowledge-based companies can greatly reduce administrative time and costs. Also, creating long-term tax exemptions and facilitating customs processes for exporting knowledge-based products can also help these companies grow.”

He went on to mention the design of a comprehensive system that provides all the services needed by knowledge-based companies (from company registration to obtaining export licenses) in one place. He also considered holding regular meetings with representatives of knowledge-based companies to identify challenges and provide practical solutions as other appropriate solutions to solve the aforementioned challenges.

Kolahi noted: Knowledge-based companies, as drivers of the digital economy, need a free and flexible space for growth and innovation. Obstructive laws not only limit this space, but can also become a factor in the outflow of talents and capital from the country.

In conclusion, he expressed hope for the removal of obstacles and said: Effective steps can be taken to address these challenges with the cooperation of legislative and executive bodies.

Publication date: 1404/01/09