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Science, Technology and Innovation Policy Review the Islamic Republic

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Science, Technology and Innovation Policy Review the Islamic Republic UNCTAD/ITE/IPC/2005/7 United Nations Conference on Trade and Development Science, Technology and Innovation Policy Review The Islamic Republic of Iran DRAFT – UNEDITED UNITED NATIONS February 2005 PREFACE UNCTAD carries out Science, Technology and Innovation Policy Reviews, or STIPs, in order to assist interested member States in formulating policies and strengthening the role of science and technology institutions in building national productive capacity and international competitiveness. The Science, Technology and Innovation Policy Review of Iran was initiated at the request of the Iranian Ministry of Science, Research and Technology (MSRT), and undertaken in close cooperation with the United Nations University's Institute for Innovation and Technology (UNU/INTECH) in Maastricht, and the United Nations Development Programme (UNDP), which also financed the project. The report was prepared by a team of international experts, led by Lynn Mytelka and comprising Tirso Saenz, Svend Otto Remoe, Prasda Reddy and Fulvia Farinelli, UNCTAD project officer. An additional input was provided by Rustam Lalkaka, Mongi Hamdi and Taffere Tesfachew. Stephen Hatem provided production assistance. A preliminary draft of the report was presented at a national workshop in Tehran in November 2003, involving the international team of experts, government representatives, the business community and other stakeholders. The report and recommendations were finalized under the overall responsibility of Khalil Hamdani, UNCTAD. The national counterpart, MSRT – Deputy Minister, Dr. MiliMonfared, and in particular the Iranian Research Organization for Science and Technology (IROST), provided substantive, logistic and financial support. The background reports were prepared by a team of local experts at the MSRT, at the Ministry of Economic Affairs and Finance, Shirkavand, at the National Research Center for Genetic Engineering and Biotechnology, Sanati, and at the National Petrochemical Company, Taeb. At IROST, H. Salar Amoli, H. Hajihosseini, E. Moeini, F. Abasi and Homa Sharafi provided additional inputs at various stages of the project. Ali Farzin was the counterpart in the UNDP Office in Tehran. It is hoped that the analysis and recommendations of the review will promote awareness of policy options to strengthen technological capabilities, and provide a basis for implementing an effective innovation strategy. February 2005 ii STIP Iran CONTENTS Preface......................................................................................................................ii Executive Summary.................................................................................................1 CHAPTER 1. CREATING AN INNOVATION SYSTEM ...................................7 1.1 Economic Setting ..........................................................................................7 1.1.1 Human development..............................................................................8 1.1.2 Employment ..........................................................................................9 1.1.3 GDP and Export composition..............................................................10 1.2 Technological Capacity...............................................................................14 1.2.1 University education and research.......................................................15 1.2.2 Technology infrastructure ...................................................................18 1.2.3 Technological capacity in the industrial sector ...................................18 1.3 The National System of Innovation ...........................................................20 1.3.1 Salient features of Iran's innovation system ........................................20 1.4 Assessment..................................................................................................24 CHAPTER 2. THE POLICY FRAMEWORK ......................................................26 2.1 The Iranian Policy Framework....................................................................27 2.2 The Ministry of Science, Research and Technology...................................29 2.3 The Technology Cooperation Office ..........................................................33 2.4 The Ministry of Industry and Mines ..........................................................35 2.5 The High Tech Industries Centre ................................................................37 2.6 Assessment..................................................................................................38 CHAPTER 3. DEVELOPING DOWNSTREAM CAPABILITIES IN IRAN: THE OIL, GAS AND PETROCHEMICAL SECTORS .................48 3.1 Introduction.................................................................................................48 3.2 The Post-war Reconstruction ......................................................................49 3.3 The Innovation System: Activities, Actors, Performance and Failures ......51 3.4 Innovation Dynamics in the Petrochemical Sector: the Role of Buy-back Agreements.............................................................................58 3.5 Licensing .....................................................................................................60 3.6 Incremental Innovations and Learning........................................................62 3.7 The Organization and Role of R&D in Petrochemicals..............................62 3.8 Forward Linkages and End User Industries ...............................................67 3.9 The Main Drivers of Innovation in Petroleum-Related Industries..............68 3.10 Main Findings: An Assessment of the Strengths and Weaknesses of the Petroleum Related Innovation System............................................70 3.11 Conclusions...............................................................................................71 3.12 Main Recommendations............................................................................72 iii STIP Iran CHAPTER 4. THE IRANIAN INNOVATION SYSTEM IN THE BIOPHARMACEUTICAL SECTOR............................................76 4.1 The Biopharmaceutical Innovation System: an Overview..........................76 4.2 The Demand Side: Government Policies and Their Impact on Innovation in the Pharmaceutical Industry ...........................................80 4.3 Other Ministries Influencing Demand Side Factors....................................83 4.4 The Supply Side: Actors Promoting Innovation .........................................83 4.5 Research and Innovation: Major Research and Training Centres...............90 4.6 Research and Innovation: The Role of Firms ...........................................100 4.7 Technological Capability and Innovation – An Assessment ....................102 4.8 Conclusion.................................................................................................105 4.9 Main Recommendations...........................................................................106 Tables Table 1.1 Human development indicators – historical trends.................................8 Table 1.2 Non-oil sector employment ..................................................................10 Table 1.3 Sectoral contribution to GDP ...............................................................11 Table 1.4 Sectoral contribution to GDP - comparison of Iran, the Republic of Korea and Malaysia......................................................11 Table 1.5 Net export of main petroleum products ...............................................12 Table 1.6 Knowledge and Innovation Related Indicators – Selected Countries, 2001 ....................................................................16 Table 1.7 Number of university graduates in sciences and engineering ..............17 Table 1.8 Telecom Diffusion - Iran in comparison with other oil producing countries .........................................................................18 Table 1.9 SMEs registered with the Ministry of Industry, 2002 ..........................19 Table 3.1 Petrochemical projects under the First Five Year Plan.........................50 Table 3.2 Production, export, and domestic sale of petrochemical products 1996-2001 ..............................................................................52 Table 3.3 Project areas..........................................................................................54 Table 3.4 Polymer capability ................................................................................68 Table 4.1 Data on the patent applications in Iran .................................................88 Table 4.2 Data on trademark applications ............................................................89 Boxes Box 1.1 Human Development through Innovation – The Case of Qeshm Island ..9 Box 2.1 Former Provincial Research Centres of IROST......................................29 Box 4.1 NRCGEB develops the first recombinant product in Iran: Human Growth Hormone .......................................................................93 Box 4.2 Isolation and Production of Water Absorbing Biopolymer by Biotechnology Centre .......................................................................94 Figures Figure 1.1 Oil Sector Exports: moving along the value chain..............................13 Figure 1.2 Export Portfolio of Iran .......................................................................15 Figure 1.3 National System of Innovation in Iran ................................................21
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