The Vice President for Science and Technology Affairs in an Interview with Iran Newspaper:
Iran has the most unique startup ecosystem in the region
With the start of the 11th government in 2013, Sattari was appointed as the vice president for science and technology affairs and was reselected for another four years after reelection of Dr. Rouhani as the president of Iran.
Now, less than one year has remained of this presidency, and Sorena Sattari expressed his extreme desire to consolidate the topic of knowledge-based companies in response to the question of his plans for the remaining time of his vice presidency. He mentioned that he will dedicate all of his power to do this since the majority of the people understand knowledge-based economy today, which is a great achievement.
He mentioned some memories that are not from a long time ago, complaining that in his own university, Sharif University of Technology, everyone mocked him when he opened an innovation center after receiving a PhD from the university. Fortunately, the center has had great achievements since its opening. Therefore, he expressed that he will do whatever it takes to consolidate the topic of knowledge-based companies.
We interviewed Sorena Sattari, the vice president for science and technology affairs and the president of the national elites foundation, in one of the warm days of summer to learn about hot news of technology in the country and entrance of startups into the stock exchange market and corona vaccine production.
These days, the topic of entrance of startups and knowledge-based into the stock exchange market is discussed by many and has several opposers and followers.
First of all, keep in mind that the development of knowledge-based companies is different from that of startups. All over the world, startups enter the stock exchange market to survive. To put in simple terms, startups emerge from the basements of houses and a family work and might even be first financed by families. Nevertheless, the development of startups will ultimately lead to the stock exchange market. The same has been observed in the majority of successful startups, such as Amazon and Uber.
When was it decided to enter startups and knowledge-based companies into the stock exchange market?
The process started four years ago and the first startup entering the stock exchange was “Up”, which was values more than 20,000 billion Tomans on the stock board.
How many knowledge-based companies and startups have entered the stock market at the moment, and how many other companies will be allowed to enter the stock market by the end of this government?
In total, 35 knowledge-based companies and startups are on the stock board, which are valued 180,000 billion Tomans. It is predicted that by the end of this government we will have more than 70 companies, although we are encouraging companies to enter the stock market.
What problems do startup companies face when entering the stock market due to their nature?
The first and most important problem is the way startups are priced since these companies, unlike other companies listed on the stock exchange, do not have land, property or sheds. Therefore, their pricing needs a new culture. On the other hand, many traditional laws existing in stock exchange are not compatible with the way these companies grow and develop.
Despite these issues, we encourage companies to enter stock exchange and have put pressure on the market to change its viewpoint. With all of these measures, we are hoping that more than 70 companies enter the stock exchange by the end of the government.
How do you assess the future of the knowledge-based companies that have entered the stock market?
Before answering this question, I have to say that we have venture capitals in the stock exchange market in addition to startups and knowledge-based companies. Currently, eight venture capitals are signing underwriting contracts and I believe that 11 other venture capitals will enter the stock exchange market. These venture capitals will bring a new culture for entering knowledge-based companies to the stock exchange market. However, the listing of these companies creates a new culture of how to invest. The same has occurred in other parts of the world. We must move to the direction that 30% of the investment market uses venture capitals instead of receiving loans since the stock exchange market is a great place for companies to be financially supported.
Now, this financial provision can be in two forms, either through venture capitals or directly listing on stock exchange. What is happening now is for the companies that have entered the stock market, and these companies were able to quickly obtain a good budget for their own development.
While many FAVA activists consider the entrance of startups in the stock exchange market a positive action, some experts believe that the entrance of some of these startups and their re-financing during a time when there is no economic criteria for valuating businesses will lead to the dominance of a specific current on the ecosystem and the elimination of the majority of independent businesses and destruction of entrepreneurship motivations. Do you agree with that?
The development of startups occurs when large startups purchase small startups. Note that while startups have access to large financial resources when they grow, they lose something else, which is innovation. Innovation is the heart of development of startups and innovation does not occur in large startups; this is mainly because large startups always follow a certain path and their mass is so heavy that they cannot change direction easily and very quickly for a goal. Therefore, innovation must be injected into these companies by small companies, meaning that a win-win mechanism is formed when large startups purchase and invest on small startups.
The same trend forms an innovation ecosystem, which is currently occurring in the country. In other words, large startups of the country are purchasing small startups since they cannot gain a loan for their development; however, large startups can attract small companies through venture capital and inject innovation in their own system.
Nevertheless, I think those who oppose the entrance of large startups into the stock exchange market have not fully comprehended the mechanism of the innovation ecosystem. The most logical action is to enter large startups into the stock exchange market and small startups should be purchased by the same startups, which is occurring in the ecosystem of the country.
Last year, we unveiled the fourth generation of Surena 4 Humanoid Robot in University of Tehran, and the support of this area was supposed to lead to the creation of the fifth generation of robots. What is the motivation for building these robots and in simple terms, what are these robots supposed to do?
The Surena Humanoid Robot is a knowledge boundary project. We should not expect this robot to enter a business because it is supposed to reduce knowledge in various industries. Currently, we have extraordinary robot makers in the country who are active in the field of industrial robots and are gradually moving toward technologies such as artificial intelligence and face detection, which is exactly our plan for the use of this knowledge. In general, it should be said that these projects are being implemented symbolically all over the world, and the purpose of their development is to discuss robot culture and technology development. In general, robots are knowledge boundary and a thousand technologies come out of their hearts to develop knowledge.
According to your announcement, more than 300,000 jobs have been formed in the country with the activities of knowledge-based businesses. Meanwhile, the opposers of the government believe that there is a poor employment rate in the country?
Last year, the sales of knowledge-based companies were 120,000 billion tomans, and their direct employment was more than 300,000 jobs. Note that their indirect job creation is much higher than this figure, because look at Snap, for example, it has about 1,500 employees, but 1.4 million drivers across the country are employed by this company, and this means Indirect employment and having the art of giving a job to an unemployed person in less than 10 minutes is a big innovation in my opinion.
We have many similar examples. On the other hand, keep in mind that several platforms have been created, which reinforced these companies.
For instance, online taxis could not have transactions in case of lack of a proper support. On the other hand, there are billions of daily bank transactions that are only carried out by fintech organizations and most banks are purchasing the fintech organizations as a traditional player of the economics, and all of these issues show the direct and indirect job creation through new companies.
With the presence of the Minister of Communications in the parliament, we saw that many parliament members were dissatisfied with the increase in bandwidth, and in a way, government critics believe that we use the national Internet. Do you think the national Internet is feasible?
There is no such thing as the national Internet. We are talking about the national information network, the responsibility of which is allocated to the ministry of information and communications of technology. In fact, our startups are users of this system.
The most important issue is the development of the national information network, which is being carried out. All startups will lose their jobs if we disconnect the international Internet. Meanwhile, I think that the development of these startups has been a valuable action of the government.
What is the current state of the startup ecosystem in the country in terms of quantitative or qualitative growth? And how far apart are we from foreign startups?
We have the most unique startup ecosystem in the region. Most regional IT startups are unique, while countries such as Turkey do not have fintech and there is nothing to compare ourselves with in this regard. Most startups of the country, which are active in the field of online sales, have the same superiority status. Another important field that has been overlooked in the country and requires discourse is biotech startups.
We have the largest regional startup in this field, and have had great achievements in other fields such as stem cells and aerospace. We also have a superior status in terms of article presentation. For instance, our rank improved last year, reaching the 15th rank of the world. This means that we are ranked so much higher than our regional competitors, including Turkey and Saudi Arabia.
We are in the top 10 countries in many fields of engineering; for instance, we are ranked 6th, 6th, and 8th in fields of mathematics, civil engineering, and biotech, respectively. Meanwhile, at the same time, we fall behind in other disciplines, such as the humanities, arts, and linguistics, which is mainly due to professors’ lack of English proficiency in these disciplines. Overall, though, we are tanked 15th in the world. Anyway, we currently have the largest startups in the region, but unfortunately, the problem that hinders the development of startups in the country is the lack of a suitable working environment for these businesses.
Which areas of startups and knowledge-based have you invested more in in recent years?
We have directly invested on biotechnology in the Vice-Presidency, and I think the corona outbreak in the world taught us biotech is not just a science. We are talking about security and economy, where we have invested for many years and have been content with taking this part seriously. With the outbreak of coronavirus, we realized that the majority of our needs, from diagnosis kits to hospital equipment, could be met with domestic manufacturing and with no need for imports. We have also focused on food security as an important topic, which will be more widely pursued next year.
You have started many projects in various cities. How do you analyze the status of knowledge-based companies and startups in cities other than Tehran?
The results depend on the culture of each city. However, most provinces I have visited have properly understood the concept and development of startup ecosystem and know how to cooperate in this field. Overall, universities are moving toward innovation since it is the basis for the improvement of the startup ecosystem. Fortunately, this is being realized in other cities.
What sectors have produced more knowledge-based products? Are there any statistics on the sale of the country's knowledge-based products?
Most of our sales are related to biotech companies. However, ICT companies have been more successful in generating jobs, and knowledge-based companies had a sales rate of 120 thousand Tomans last year.
Given the increasing sanctions against the country, how do you thin they will affect your plans and how do you believe we can defeat them?
We cannot say that the sanctions have caused no troubles in this area; however, they have had many merits for our companies since a great market is created for them and the culture of our people has been changed due to the sanctions. This is mainly because of our ability to export products to other countries when we were only recognized as a country that sold oil and imported products for several years. That is to say, we are trying to become an exporter, and this change of thinking is very important and valuable in my opinion.
We have had proper growth in some areas despite the sanctions. For example, in the case of Corona, many startups, such as in the field of education, experienced very good growth, but in contrast, startups in the field of transportation and tourism had problems. In general, the sanctions helped the growth of knowledge-based companies.
As the president of the national elites foundation, do you have statistics on the number of elites leaving the country or returning to the country during the presidency of Dr. Rouhani?
We announce the micro-statistics on immigration to the Supreme Council of the Cultural Revolution. In our last assessment, a decline was observed in the number of elites leaving the country. Soon, the first migration yearbook will be published with our support and with the cooperation of migration observatory of Sharif University. We want to provide clear numbers on the issue of migration, including both of those who leave the country or return to the country. This yearbook is very useful, even the type of migration is seen in it, for example, now the educational migration is sharply decreasing and the labor migration is increasing.
Immigration from the country is more for experience and job search or should be referred to as brain drain. As the president of the national elites foundation, what have you done about returning elites to the country?
Currently, the number of our students abroad is very low. That means something like more than one percent, and that's very worrying. Meanwhile, neighboring Arab countries have more than 35% of students studying abroad. Even at the beginning of the revolution, we had 170,000 students, of which 100,000 were studying abroad, and now our student population is more than four million. This number is only 50,000 students studying abroad.
It is interesting to know that at the beginning of the revolution, 50,000 of our students were studying in the United States alone, and it is painful for me.
We have attempted to make a move in this part and seriously work on it. This led to the return of 1600 elites from 100 top universities of the world in the past four years. We have developed a program to prepare a new environment for Iranians outside the country to return to the country in the form of the knowledge-based economy. When an economy is based on underground sources, there is no difference between elites and normal people.
Most of these individuals returning to Iran are active in startups and it is interesting to know that many startups, which are entering the stock exchange market, have been implemented by these individuals.
Elites who worked at Google, Microsoft, Facebook, etc., and now sell billions in these startups. On the other hand, out of this number, 1,600 elites who returned to the country, about 350 of them became faculty members of the country's universities. I believe that the low number of Iranian students outside the country should be an alarm since there is a need for exchanging knowledge with the rest of the world. Meanwhile, a situation must be provided for students to be returned to the country after graduation and use their knowledge in the country.
Last year, you announced that a contract has been signed with knowledge-based companies to produce 5 million masks for medical staff. Isn't it possible for knowledge-based companies to produce low-cost masks for the general public? Currently, the way to control and prevent coronary is to use a mask, and at the same time the high price of the mask is such that it may not be so easy for the low-income group to prepare it. Does the deputy have a special plan to solve this problem?
Knowledge-based companies are producing nano-masks in the country. However, we have had negotiations on the production of mask manufacturing devices by knowledge-based companies. When the corona had just spread in the country, the country's mask production capacity was 200,000, of which a small amount was produced; within a month, Daneshbonyan was able to build the first nano-mask production machine in the country. Several other companies were added to this production cycle.
Today, we export nano-mask production devices. In addition, our knowledge about the disease has increase and we have realized that washable masks can also be used to prevent the disease. These are new medical information about this disease that has identified any type of yogurt that can be used, and with the training given by Dr. Haririchi, Deputy Minister of Health, anyone can easily make a mask out of a pajama. However, I am happy that we currently have more than 5 million mask production capacity.
How many masks are produced for people?
The production capacity of masks in the country is more than 10 million every day.
So why is it not available?
It is available.
But, do you believe that it is expensive?
The price of masks is related to the supervision of the market. What happened recently was the ban on the export of masks, and somehow when the export is banned, the price goes down a bit. The companies had negotiated for the export of the mask and some were exporting; But with this ban, a lot of damage was done to these companies.
Are there statistics on services provided by knowledge-based companies and startups after coronavirus outbreak?
I remember in the early days of the coronation in the United States, four patients were connected to a ventilator and samples were made. Eight patients were connected to a ventilator. We did not experience such bitter events in the country. Keep in mind that the construction of a ventilator is not that easy and each one costs 200-300 million Tomans.
Of course, this is a domestic price because the international price is much higher and at one point this device was not on the market that we could buy it because the Americans and Europeans had dumped it in the market and everything from ventilators to ICU equipment and disinfectants.
What is the current state of the corona vaccine in the country?
We have contracts with six companies and research institutes to produce the corona vaccine, two of which have progressed well and reached the animal clinical trial stage. But, we still have to wait because the corona is a highly complex virus and the situation all over the world. This is how a vaccine is made. If the virus was a simple virus, the human vaccine would have been made very early.
Which of the remaining projects do you want to finish before the end of the government?
I really want to fix the topic of knowledge-based centers in the country. To achieve this goal in the remaining time, we will do whatever it takes to have no return.
When I see everyone talking about knowledge-based economics these days, it is a great achievement, and I will never forget that at this university, Sharif University of Technology, where I grew up as a student and now there are professors, they made fun of me. When the first innovation center was launched, it was said that someone had opened a supermarket at the university, and now, fortunately, the entire university has become an innovation center.
I believe that the entire city should be turned into innovation centers. The development of the country happens when the whole city of Tehran becomes a science and technology park and these children can easily work in the center.
This is what we want to do in innovation regions. Unfortunately, some of the staff in the Ministry of Science want to legislate for these areas of innovation, and the law imposes restrictions. Legalization eliminates innovation and there will be no development and economy. Innovation economy needs a wild spirit to move every where and create innovation.
As a government, the only thing we can do is not to stop or restrict it. Fortunately, with the help of the leadership, our budget situation will improve this year, and we will make the necessary investments in this area.
A report by the public relations and information center of the Vice-Presidency for science and technology affairs