Private Sector Participation in Financing the Knowledge-Based Economy

Providing sustainable and appropriate financial resources to achieve a knowledge-based economy, ranging from basic research to innovation and market entry, is inevitable. An examination of the state of the government in terms of funding, costs, and responsibilities show that the government alone cannot fund the necessary research chain for innovation. On the other hand, the inefficiency of the resource allocation system in this area has caused the same limited resources not to have the necessary effectiveness, and practically only a small part of GDP (about 2%) is allocated to this area.

One solution to the above problem is to expand private sector participation in financing the knowledge-based economy. According to UNESCO, in Iran, only about a quarter of these costs are covered by the private sector, while in the Islamic countries of Turkey and Malaysia is 56%.

The Challenge: Expanding private sector participation, especially large enterprises, in financing the knowledge-based economy chain from research to innovation