Assessing and identifying entrepreneurial opportunities in petroleum industry in Iran

Abstract

Endowed with abundant oil and natural gas resources, Iran has pursued a development strategy of self-reliance with some success and did not face an import constraint. Yet, has adopted an import substitution policy and used its oil revenues to acquire foreign technologies to industrialize. Iran is today a middle-income developing country, with a significant industrial base, a relatively well-developed science and technology infrastructure and good human development. However, unlike other middle-income countries, Iran is still largely a natural resource-based economy. Diversification is an imperative, not only because natural resources are exhaustible but also because export success in world markets increasingly demands knowledge-intensive production and innovation-based competition. Above all, there is a need to provide quality jobs for the 800,000 literate Iranian men and women that enter the labor market every year. The shift to a more knowledge-based economy will require creating a national innovation system that can not only import and adapt technologies, but also improve upon them, innovate new technologies and diffuse them economy wide. In this paper, the entrepreneurial opportunities in Iran's petroleum industry are assessed with having Norway's petroleum industry as a successful example. Iran's petroleum industry is serious need of more dynamism, which has to be encouraged by a more market-pull in the overall system and a greater involvement of the private sector. This calls for more privatization, including activities hitherto organized under National Iranian Petroleum Company, or creating independent public corporations that are regulated as private firms. The fact that conception of privatization as elitist concentrations of capital and power should not exclude developing an entrepreneurial and innovational policy for a privatization and industrial development that ensures reduction in capital and power concentrations and more dynamism in a more market oriented system.