Specifics of Entrepreneurial Activities in the Sub-Sanctioned Resource Economy of the Islamic Republic of Iran

Abstract

In the new conditions, it is necessary to rethink the concepts and models of various subsystems of the national economy’s activity, including small and medium-sized businesses, which makes study of the experience of the Islamic Republic of Iran as a resource country facing a high level of economic sanctions relevant. The aim of the article is to identify the features of the small and medium-sized enterprises’ activities of the Islamic Republic of Iran. The authors use methods of economic analysis, system-structural approach. The article establishes that the criterion for the classification of small and medium-sized enterprises is only the number of employees. Due to high inflation, the criteria of revenue and assets are not applied, industry affiliation is not taken into account. A significant proportion of small and medium-sized enterprises develop by replacing inaccessible goods and technologies, which leads to them having certain features. Firstly, small and medium-sized enterprises provide up to a third of the GDP of the Islamic Republic of Iran. At the same time, the falling behind of small and medium-sized enterprises in labor productivity is lower than in countries with mature market economies. Under the sanctions, a significant part of small and medium-sized enterprises of the Islamic Republic of Iran produce alternative imported products with high added value within the framework of small-scale production. However, the export potential of these products is limited. The specific ways of supporting small and medium-sized enterprises include the focus on the value chains creation (rather than the establishment of new enterprises) and the development of subcontract relations.