There's going to be a lot of ink spilled this week about the nuclear agreement the West just struck with Iran. The deal to scale back Iran's uranium enrichment program still has to be approved by Congress and Iranian officials. But if it moves ahead, analysts say, there's at least one group that'll unquestionably benefit from the move, and that's Iran's burgeoning tech sector.
Iran has a tech sector? you might ask. Well, yes — and it's one of the fastest-growing in the region.
Some technology in Iran has flourished in spite of the country's restrictions. If you've seen the documentary "The Dish," you know what I'm talking about. Satellite TV may be illegal in Iran, but it can still be found in homes everywhere. The same goes for Facebook. Nearly 60 percent of Iranians were said to use Facebook "regularly" in 2012, even though the service is illegal. Ayatollah Ali Khamenei, Iran's supreme leader, is also active on social media.
But these are just data points about technology consumption. What's really interesting is how Iranians are increasingly producing technology of their own — sometimes with the blessing of Tehran, other times completely independently. Iranians! They're more like us than you think.
Take Digikala, which is more or less the Iranian version of Amazon. It's considered to be the biggest online retailer in the Middle East, drawing 750,000 visitors a day, according to the Guardian. Some estimates put Digikala's value at about $300 million. And it even supports same-day delivery, at least in Tehran. Digikala's chief executive, Hamid Mohammadi, told the Guardian earlier this month that a deal would spur much-needed foreign investment and a more professional business environment.
"We need access to technology and to partners," Mohammadi told the Guardian. "The Koreans and Chinese ignore the sanctions, but when they are lifted we expect to see European and American brands.”
Or consider Avatech, a Y Combinator-like accelerator that gives indigenous startups a bit of money and some training in exchange for a 15 percent stake. Avatech does hackathons. It invests in businesses that wouldn't look much out of place in Silicon Valley, such as Reyhoon, an Iranian version of Seamless or Grubhub, or Parvaneh, the Iranian equivalent of Etsy.
Christopher Schroeder is the author of "Startup Rising: The Entrepreneurial Revolution Remaking the Middle East." He regularly travels to Iran and has briefed U.S. lawmakers on the state of the tech economy there. In an interview, Schroeder said Iran's government supports 31 startup incubators that are developing technological solutions to the country's educational, agricultural and health-care challenges. Iran's telecom networks are adding more than a million new smartphones a month.
All that growth is fueling an incredible demand for Internet access, especially on mobile devices. There were 1 million users on 3G data in 2014, according to Schroeder. A year later, that figure has grown 20-fold, he said, citing meetings with business and government officials. He'll go back to Iran in the fall.
Iran's deal with the United States, which is expected to lift a number of economic sanctions against Tehran, could allow the country to attract more foreign money or technology to bolster its growing tech sector.
"I have heard from over a dozen startup entrepreneurs in Iran this morning, excited and empowered and looking forward to celebrating tonight after sunset (it is Ramadan)," said Schroeder in an e-mail. "All have little doubt they will have more open access to the best software around the world, the best products, and more and smart capital."
The picture isn't likely to brighten overnight. Although the deal lifts European sanctions against Iran, certain U.S. sanctions will remain for now, according to Danielle Kehl, senior policy analyst at the Washington-based New America Foundation. Meanwhile, some U.S. businesses are actually already selling to Iran thanks to policy changes made in 2013 and 2014, but have "had limited success due to the financial restrictions."
Still other sanctions, such as the fact that Iran remains on Washington's list of state sponsors of terrorism, will keep Iran from getting its hands on some technology, said Jack Nadler, a lawyer at the firm Squire Patton Boggs who's advised developing countries on their telecommunications policies. Still, lifting some international restrictions is expected to benefit the Iranian telecom industry.
"Just as we’ve seen with Cuba," Nadler said, "I expect we’ll see efforts to facilitate telecommunications trade between the U.S. and Iran."
Lifting sanctions isn't just a matter of helping Iran. It's also a way to allow U.S. businesses access to one of the most important markets in the Middle East at a time when many others, such as China, are aggressively investing in the country themselves. If the United States doesn't gain a foothold there economically, its rivals will. And that's just as much a part of the geopolitical equation as Iran's nuclear program.