Information Technology in IRAN

 IT Strengths and Weaknesses

IT Strengths and Weaknesses

The increasing demands on the telecommunications network cannot be easily met, and especially not in the short term. Only in the medium-term is a larger capacity increase achievable.

Iran's Internet link was made possible by dedication of a couple of hardworking 25 year old computer science graduates at the Institute for Studies in Theoretical Physics and Mathematics (IPM) who with $50,000 in hardware and software and little help from outsiders, "went into that room down the hall with diskettes and manuals" and linked Iran to the world. 28

Iran has already started to carve out areas in which it has competitive advantage in IT-base services, a process that will continue to evolve. Moreover, liberalization is not only about expanding exports; even more important is its role in helping domestic producers gain access to more efficient and diversified services in the world market.

In almost all cases most of Iran's neighbors recieved assistance from the outside world in the development and maintenance of their Internet. The fact that after Israel, Iran was the second country in the Middle East to link up to the Internet and do so relying solely on its own brainpower should not go unnoticed. It is true that there are still many problems to be addressed regarding Internet's expansion in Iran. It is also true that mistakes have been made. However by all accounts, the future of Internet access in Iran is bright.29

To meet future needs, Iran's universities have to increase the diversity and capacity of computer educational programs to train the needed. The governments should increase accessability to the international market by the Iranian firms. As a result, one can expect developments in this field in two ways: First, the tendency of the firms to use domestic and international software markets, and second, to place this know-how at the service of domestic data networks and to earn revenues from abroad.

The next period will see competition between the manufacturer and supplier of software. At first the survival of these firms will depend on their recognition of the demand and requirements of the consumers, consideration of special application of the software and, quality of service thus leading to huge financial gains in the medium term.

An outline of significant weaknesses and strengths is mentioned below in addition to a number of recommendations:

Strengths

Country has resource to finance the telecommunication sector
Educated labor force
Low labor cost

Weaknesses

Lack of production of manufactured goods for the internal market and for exports
Poor selection process in the higher education system
Instability of foreign exchange

Recommendations

Improving educational system (selection process, student placement and evaluation, availability of resources)
Investing in telecommunication infrastructure
** Diverting resources to the telecommunications sector or seek a substantial increase in outside financing
** Encouraging foreign investment: the high foreign currency content necessary to overcome the technology gap makes it more critical
Stabilizing the foreign exchange
Easing of sanctions imposed on Iran
** Harmonization of regulatory practices among trading partners for an effective liberalization

There are many issues to be considered. To start, the government should invest in the infrastructure development, by providing the necessary resources and training to the population. Despite the obstacles, internet is expanding in Iran. The government in its Second Five Year Development Plan has show its support by allocating resources to this growing sector.

To be a global player "it is hard to imagine an Iran in the future without Internet access, at the very least for universities, research centers, and major industries."30

Previous Section: Legal Environment

Next Section: Impacts on the non-IT Globally Competing Firm

Return to Main Menu: Information Technology in Iran

Author: Sepideh Khazai
Last Update: June 6, 1997
This pages's URL is: http://gurukul.ucc.american.edu/initeb/sk4484a/analysis.htm