Fact Checking

Fact Check: Is Iran Building its Global Innovation?

October 7, 2021
IranWire
6 min read
Zabihollah Khodaian claims Iranian innovation has been remarkable in the face of “unilateral and inhumane actions" against the country, meaning sanctions
Zabihollah Khodaian claims Iranian innovation has been remarkable in the face of “unilateral and inhumane actions" against the country, meaning sanctions

Iran is making huge strides in global innovation despite “unilateral and inhumane coercive actions against the Iranian people”, an Islamic Republic official has claimed.

Speaking at the 62nd Annual World Intellectual Property Organization General Assembly (WIPO) in Switzerland on October 4, Zabihollah Khodaeian, head of Iran’s Property and Deeds Registration Organization, said: ”The seven-step rise in Iran's position in the Global Innovation Index 2021 shows the determination of the great nation of Iran to overcome illegitimate restrictions imposed on Iran by creating economic diversity and development based on a creative and knowledge-based economy."

In addition to his observations about actions against Iranian citizens, Khodaeian described the sanctions against Iran as “economic terrorism” and praised the Islamic Republic’s ability “to make great strides in sustainable development, including in the field of intellectual property.”

So how true is this? Did Iran's position in the Innovation Index improve in 2021? What will its position be in the coming years? In which innovation indicators has Iran made progress?

In this report, IranWire assesses and examines these questions.

What is the Innovation Index?

The World Intellectual Property Organization (WIPO) is a 192-member United Nations body that annually examines the progress of countries in the following seven areas, ranking them in its index.

1- Political, legal and economic institutions

2- Human capital and research including education and development

3- Infrastructure

4- Market sophistication

5- Business sophistication

6- Knowledge and technology outputs

7- Creative outputs

Iran's Ranking in the Innovation Index 2021

According to the latest report published by the Intellectual Property Organization, Iran is ranked 60th in the world in the Innovation Index, an increase of seven points when compared to 2020. In 2020, it was ranked 67th in the world.

To better understand the change that has taken place, the following points must be considered:

1- Iran’s seven-place “promotion” is not the result of a new and extraordinary event or innovation. The country's ranking in 2019 was 61. In other words, its situation has improved by only one rank since two years ago. Iran dropped from 61st position in 2019 to 67th position in 2020 and was again ranked 60th in 2021. Low activity of other countries or the changes those countries underwent are likely to responsible for these fluctuations.

2- A look at Iran's micro-scores in the seven areas listed above reveals that the situation in the country has worsened in four areas compared to the situation in 2020; the country has made progress in three other areas. If the same comparison is made with 2019, we see that Iran has declined in six areas and has progressed in only one area.

The following table shows Iran's ranking in the areas surveyed by WIPO and its position in the Innovation Index:

3- A study of Iran's micro-scores indicates that the country's rise by seven places in 2021 compared to 2020, and the one-place rise compared to 2019, can be linked to a decrease in the complexity of the market.

In terms of market complexity, Iran was ranked 100th in 2019, and fell by eight steps in 2020 to 108th. Suddenly in 2021, it rose by 26, and so ranked 82nd.

So what has caused Iran to grow significantly in terms of market complexity? To answer this question, it is instructive to look at Iran's micro-scores in this area over the last three years:

When it comes to the complexities of the market, WIPO addresses three areas: credit cards, investments and business. Iran has improved its investments and its trade rules and regulations. Therefore, Iran's advantage has been enhanced by the facilitation and reform of investment and trade laws, including those applicable to domestic and international trade. However, the recent report does not specify what reforms have been made in these two areas. Regarding the issue of credit cards, in 2021, the situation in Iran worsened and its score decreased.

Iran's rank in the 2021 Innovation Index compared to 2019, although one place higher, also reflects that Iran has declined in rank in six areas: political, legal and economic institutions; human capital and research, including primary, secondary and university education; research and development; infrastructure; business complexity, knowledge and technology output, and creative output). Iran’s progress in ranking by one place, despite its decline in six other areas, could be attributed to two things:

1- A major leap in the reduction of market complexities and a reform of the structure of investment and international trade.

2- Degradation or stagnation in the situation for other rival countries.

Comparing Iran With Other Countries in the Region

The World Intellectual Property Organization’s Global Innovation Index surveys 132 countries on an annual basis. This year’s index reveals that Iran ranks after Israel, the United Arab Emirates (UAE) and Turkey, and has done over the last three years.

In 2020, Saudi Arabia ranked higher than Iran, and in 2019, Iran fell below Kuwait in the index rankings. But in 2021, Iran had a higher ranking than both, with Saudi Arabia in 64th place and Kuwait in 72nd place.

Among the countries in the region, Turkey jumped 10 places in 2021, rising from 51st to 41st place. United Arab Emirates is on a gentle upward path compared to previous years. The country ranked 36th in 2019, 34th in 2020 and 33rd in 2021.

Conclusion

Zabihollah Khodaian, the head of the country's Property and Deeds Registration Organization, recently claimed: "Iran's seven-step increase in the 2021 Global Innovation Index shows the determination of the great nation of Iran to overcome illegitimate restrictions."

IranWire investigation into this claim shows that Iran's position in the global innovation ranking for 2021 did rise by seven points when compared with 2020. However, at the same time:

1- Iran's rank in 2019 was 61 and it has recently risen to 60.

2- An examination of Iran's micro-scores in the Innovation Index reveals that the situation in Iran deteriorated in four areas when compared with 2020. In 2019, the situation deteriorated in six of the seven areas surveyed.

3- Iran’s minimal improvement in the Innovation Index is attributable to the country's leap in market complexities. In other words, through reforms in investment and trade regulations, the country has been able to improve its position, but this has little to do with the “determination of the great nation of Iran to overcome illegitimate restrictions”, as claimed by the head of the registry organization.  In an effort to solve the country’s problems, the government has created market reforms or openings.

4- In recent years, Iran has always ranked lower than Israel, UAE and Turkey and this trend continues. Turkey rose by 10 places in 2021, rising from 51st in the world in 2020 to 41st in 2021.

5. The situation in Iran in 2021 has improved compared to Saudi Arabia, which ranked above Iran in 2020. Kuwait ranked above Iran in 2019, but currently Iran ranks higher.

Therefore, while confirming and recognizing that Iran has gone up by seven places in the Global Innovation Index in 2021, IranWire awards a "misleading" badge to Zabihollah Khodaeian, head of the Property and Deeds Registration Organization, and his claims that Iran's seven-place rise in the 2021 Global Innovation Index is evidence of Iran’s determination to overcome illegitimate restrictions. Iran was ranked 61th in 2019, so there is little change. The slight improvement is not due to creative output, a new discovery or scientific advancement, but to a reform in trade and investment regulations, which could be due to constraints and international pressures. Such a response does not warrant being characterized an an innovation or even as a show of resilience.

You can read about our fact-checking methodology here.

Read other articles in this series: 

Fact Check: Have Sanctions Shifted Iran to a Knowledge-Based Economy?

Fact Check: Is the Islamic Republic of Iran a "Top" Country?

Fact Check: Is Iran the Medical Hub of Asia?

Fact Check: Does the Islamic Republic Really Fight Corruption?

How Might the Economy Fare Under a "Unified" Iranian State?

Sanctions Blamed for Lack of Both Flu and Coronavirus Vaccines

Women are the Victims of Iran’s Economic Crisis

Iran's "Chicken Crisis" and Khamenei's Resistance Economy

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Fact Check: Is Iran Building its Global Innovation?