Systemic and Institutional Failures in Financing Science, Technology, and Innovation: The Case of Iran

Document Type : Research Paper

Author

Department of Science, Technology and Innovation Financing and Economics, National Research Institute for Science Policy (NRISP), Tehran, Iran

Abstract

This study addresses the necessity of analyzing the ecosystem to identify systemic and institutional failures that hinder its effectiveness and to propose actionable solutions for reform. The research employs a qualitative analysis of national policy documents, development plans, and scholarly literature, complemented by expert validation, to extract, categorize, and interpret the main challenges and policy responses. The findings reveal nine categories: (1) Financial System of Higher Education and Research Institutions, (2) Government's Role in Supporting Strategic Research, (3) Supporting Demand-Driven Research, (4) Diversifying Financial Mechanisms and Tax Incentives, (5) Research Budget of Government Organizations and SOEs, (6) Supporting Financial Institutions, (7) Supporting science, technology, and innovation (STI) Financing through the Capital market, (8) Coordination and Cooperation among STI Financing Bodies, (9) Encouraging Private Sector Investment in R&D. To overcome these barriers, the study suggests various solutions, such as mission-oriented and performance-linked budgeting, expanding financial and legal autonomy for STI actors, activating legal capacities of knowledge-based acts, strengthening the capital market’s role in innovation financing, diversifying financial institutions and instruments, and promoting university–industry–government collaboration. By categorizing both challenges and solutions into systemic and institutional domains, the paper provides policy solutions to reform Iran’s STI financing ecosystem and strengthen its contribution to long-term development goals.

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References

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Interdisciplinary Journal of Management Studies
Volume 19, Issue 3
July 2026
Pages 609-626

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