Entrepreneurial Ecosystem, Barriers to Entrepreneurship in Industrial Forestry & Entrepreneurial Characteristics and Examples in Iran

March 2, 2025

The task asks for a report on building a small business in Iran that will be mainly the Industrial Forestry, a subsection of the Agricultural sector. The report is meant to illustrate the barriers, the initiatives of the funding, the legislation and policy, the education programs and, of course, the possible success of Iran. This report is researched in order to analyze the impact of these factors on the economic output, regional development and the spark of entrepreneurship in Iran, and also the areas that the system needs to be improved. In addition, the report should also talk about the personal traits of the entrepreneur that will be of great help to him in dealing with these barriers and to seize the chances that are available in Iran, giving examples of the local entrepreneurs. The American Society for Entrepreneurship Ecosystem (2011) should be the one used, focusing on Finance, Policy, Culture, and Human Capital.

Part A: Entrepreneurial Ecosystem in Iran

a) Introduction to the Isenberg Model

The Isenberg Model, a significant tool proposed by Daniel Isenberg, offers a comprehensive analysis of the entrepreneurial ecosystem (Isenberg, 1986). It underscores the interdependence of various factors shaping the entrepreneurship climate. The model encompasses six pivotal elements:

Finance: This element is crucial as it facilitates entrepreneurs’ access to funds. It encompasses various financing options, such as grants, loans, venture funds, and fiscal facilities and support initiatives typically provided by governments or other organizations (Isenberg, 2016).

The policy addresses both the regulatory environment and government intentions that affect entrepreneurship. These are laws, regulations, and policies regarding business startup, taxation, intellectual property rights, and trade (Isenberg, 1981).

Culture: Culture refers to the code of behaviors, opinions, and values that underlie the entrepreneurial actions of Society. It includes a mindset about the drive for risks and innovations, while views on failure are also considered. Also, support systems and examples for entrepreneurship matter (Soheilian et al., 2014).

Human capital is the workforce’s skills, knowledge, and capacities. It establishes some educational programs and initiatives, offers certification and courses in the same area, and touches on workforce skills and entrepreneurship training readiness.

Support: Support refers to infrastructure and services that encourage entrepreneurs. It includes incubators, accelerators, mentorship programs, and networking opportunities, and it is usually provided for free.

Market: Market size refers to the number of products or services sold (e.g., the population of a region) and their growth rate over time. Market competition, though, is a process where producers compete for the same customers and can sometimes view each other as enemies. It covers them in detail, like consumer needs, competition, and ways of reaching markets.

Regarding Iran’s Industrial Forestry sector, the Isenberg Model can be a powerful tool for examining the advantages and disadvantages of the entrepreneurial ecosystem. By analyzing these components, policymakers and business people can identify the gaps in the entrepreneurial process and design programs to support the development of policies and business areas, empowering them to make informed decisions.

b) Finance: Funding Initiatives in Iran

Government Grants and Subsidies: A representative and reiterated example would be the government providing grants with the help of the Iranian national agricultural R&D system to support research and development expenses and costs for technology adoption to enter a new market. Also, subsidies for some inputs or activities related to the Industrial Forestry sector, like land rehabilitation or sustainable forestry practices (Shoar et al., 2022).

Venture Capital Availability: Although many other countries have higher rates of venture capital, funding startups in Iran more often involves V.C. investors. Venture facilities generally focus on fast-growing businesses investing in technology and innovation. These companies fund businesses in exchange for equity ownership and provide entrepreneurs with valuable expertise and networking opportunities to help them grow their businesses (Sanni-Anibire et al., 2020).

Impact of Funding on Entrepreneurship: The huge amount of money that is available is a financial blessing and a boost to the economy. Thus, the entrepreneur can devote his time and resources to research and innovation, get the equipment, and recruit employees with the necessary skills, and at the same time, the atmosphere is filled with positivity and the chance of success.

c) Legislation and Policy Impacting Industrial Forestry

Regulatory Framework for Industrial Forestry: Iran’s regulatory system is composed of laws, regulations, and policies that deal with land use, forest management, environmental protection, and sustainable development (Beygi Heidarlou et al., 2019).

Regulations Applied in Iran

Forest Law of Iran
Forest Management Plans
Environmental Protection Regulations
Protected Areas Regulations

Government Support Programs: Government staff was tasked with creating many devices designed to boost entrepreneurship and innovation in the Industrial Forestry sector. The schemes include financial rewards, may sessions, subsidies, and grants to foster startups, sales, and research and development ventures (Nasiri et al., 2023).

Policy Impact on Entrepreneurial Growth: Excellent policies that help the innovation process, create a sustainable environment, and give entrepreneurs market access to their products make the environment for entrepreneurship very favorable. Nevertheless, restrictive policies, regulatory constraints, or barriers that could prevent entrepreneurial acts and slow down growth opportunities are also present.

d) Culture- Cultural Influences on Entrepreneurship

Historical Practice. Historical Practice Forestry in Iran combines the old and the new, the traditional and the modern, the conservation and the industry. The country has a forest management tradition fo, followed by the creation of forest management practices that stress the sustainable use of forest resources and the conservation of biodiversity (Ahadi & Kasraie, 2020).

Religious and Spiritual Values. Religious and Spiritual Values. Islamic values that stress the environment are also essential for woodcutters’ activities. Community participation is the central aspect, as the local communities usually manage the forests they use for traditional knowledge. The conservation and restoration projects are run by the cultural admiration of nature’s beauty and the wish for the protection of the environment for the future generations.. (Soleymani et al., 2021).

e) Human Capital: Education Programs in Industrial Forestry

Research Program by Iran’s Own Organization: The Agricultural Research and Education Organization is the organization that has the mission of the betterment of food security and the living conditions of the Iranian people through research, training, and other activities that lead to the increase of agricultural production, the improvement of the quality of food, the saving of biodiversity and the sustainable management of natural resources (Sagheb Talebi et al., 2014).

University Programs in Forestry: Universities in Iran equip students to be competent in forestry concepts such as forest ecology, silviculture, and forest management. Graduating from these programs, individuals have the knowledge and qualities to work in the industrial forestry sector.

Skill Development Initiatives: Employee training programs may include workshops, seminars, and on-the-job training classes on particular skills like tree planting, forest inventory techniques, and sustainable forest management practices. Many universities have set up independent research centers/institutes to research specific areas of interest. These research centers do not award university degrees, but they work with the colleges to support and facilitate the student’s completion of theses or dissertations (Afsharzade et al., 2016).

Impact on Entrepreneurship: A skilled and knowledgeable workforce can be the leading force for innovation, increase productivity, and be the best competitor in the sector. Through educational and skill training, entrepreneurs can secure a workforce that has the necessary abilities to cope with sector shifts and should engender durable growth.

Part B: Barriers to Entrepreneurship in Industrial Forestry in Iran

a) Specific Barriers in Iran’s Industrial Forestry Sector

Access to Finance: Entrepreneurs find it difficult to get the needed finance for their business, either to start it or expand it, for reasons that are not few. This nation of finance can impede entrepreneurs’ access to purchase equipment, land acquisition, or investment in research and development. The obstacle is finding such funding sources; therefore, entrepreneurs can look for other funding sources, such as government grants, crowdfunding, or investor partnerships (Savari et al., 2020).

Regulatory Burdens: Entrepreneurs must go through complex regulations and permissions like the Forest Law of Iran and the Forest Management & Environmental Protection Regulations, which may be time-consuming and costly. However, environmental regulations and sustainability demands may complicate the matter for forestry businesses. Legislators can also simplify regulations and guide entrepreneurs to help them deal with regulatory difficulties more efficiently (Sotoudeh Foumani et al., 2016).

Lack of Infrastructure:- Several rural parts of Iran have inferior infrastructure, which makes it difficult for entrepreneurs to move raw materials, process products, and reach customers. The industry players should contact government entities and other stakeholders to overcome this obstacle. They should work together to form the infrastructure supporting the industrial forestry sector. This might be by building roads, processing plants, and transportation networks esestablishedSajad & Sefidi, 2012).

Legal Restrictions on Land Use: These rules safeguard the environment, preserve biodiversity, and encourage sustainable forest management. With their assistance, policymakers can provide environmental regulation and identify ways to implement sustainable forestry practices by offering incentives. The answer lies in making an obligatory statement that the trees are logged using low-impact leanings and environmental-friendly technologies that should be followed up. Furthermore, they can cooperate with state environmental institutions and other conservation organizations to cover up their steady practices of ecological safety (Sotoudeh Foumani et al., 2021). (Sotoudeh Foumani et al., 2021).

Access to Technology: One of the fastest developing areas of forestry and other exciting fields is using GPS mapping, remote sensing, and digital foresting, which ensures that the task is completed quickly and, at the same time, achieves sustainability. However, these pose some challenges, namely, the low cost of resources, inadequate infrastructure development, and lack of awareness, and a misleading path may be created for entrepreneurs. As a business developer, a common and tricky problem you will encounter is the lack of advanced forestry techniques. To overtake this, they may partner with OEMs, research centers, and government agencies to access such technologies. Furthermore, we should train them and encourage the necessary workers’ skills for working with ICTs.

b) Barriers to Entrepreneurial Ambitions & its impact

These rigid constraints often prevent business planning from being done correctly, sometimes leading to company failure.

Stifled Innovation: The commercialization and related safety requirements and regulations limit the companies from inventing new technology and doing this innovation in the timber forestry business. Consequently, the innovators would hold back their progress in the fintech field due to uncertainties about such an unregulated sector, making it rigid without creating a competitive environment and enabling them to take advantage of innovative technologies. (Elkafrawi & Refai, 2022).

Limited Growth Opportunities: Accessing the Society’s group left out in infrastructural development and finance may positively transform the company in this line. Skill enforcement and setting up the proper infrastructure will be a significant headache for the startups coming tomorrow, so they won’t get the market shares they deserve on their growth path.

Reduced Entrepreneurial Appetite: Strict regulations, limited access to technology, and other factors can decrease entrepreneurial interest in the Industrial Forestry sector. Entrepreneurs may be put off from entering the field or from trying out new things because of the obstacles and risks involved in these barriers (Thornton et al., 2011).

Increased Business Failures: The abovementioned barriers can increase business failures in the industrial forestry sector. Entrepreneurs who fail to overcome these barriers may find it hard to run their businesses, resulting in businesses closing and jobs being lost (Thollander & Ottosson, 2008).

c) Case Studies of Entrepreneurs Overcoming Barriers- Case Study of a Zagro Sparse Coppice

Several entrepreneurs in Iran’s Industrial Forestry sector have successfully overcome these barriers to achieve success. For example, A Case Study of a Zagros Sparse Coppice Oak Forest. This research aimed to better understand the consequences of Iran’s most crucial forest conservation law (the FNL) on the dynamics of the Zagros forests. The historical aerial photos, Corona imagery datasets, Landsat time series, GEE-based cloud computing, spectral-temporal characteristics, and machine learning methods such as R.F. made large-scale forest cover monitoring possible. The results proved the study’s central hypothesis: significant changes in forest cover pace and trend happened after the FNL’s implementation. Iran’s Forest Nationalization Law has not successfully managed, protected, developed, and used forests. Therefore, the results showed that the FNL was impractical; on the contrary, the annual change in forest cover and the intensity of forest loss increased after the FNL was implemented. Therefore, the law can be helpful to the people, the level of knowledge and technology, the policies of the Society, and the reason for its formulation should be known(Beygi Heidarlou et al., 2023). We might request a review of the policies based on the current issues and the promotion and expansion of specialized training to better use the resources. The forest management may also be enhanced by the permission of the locals to be more involved. To ensure suitable planning and sustainability through decentralization and the fair distribution of resources and opportunities, a land use planning and development system with its own council may also be helpful. This case study shows the different problems and possible solutions to forest conservation for Iran and all other countries that need to enhance forest conservation. (Beygi Heidarlou et al., 2023)

Part C) Entrepreneurial Characteristics and Examples in Iran

a) Characteristics for Overcoming Barriers by Individual

Resilience and Perseverance. The point is that when they venture into this segment, even sometimes entrepreneurs in Iran’s forestry sector have to deal with challenges and impediments. Resiliency to recover from mistakes and determination to keep going should also be considered. This distinctive characteristic, along with other essential factors, helps them to be beside others and able to face challenging circumstances. To epitomize, an entrepreneur might face the difficulty of waiting for the approval for occupancy, but at least be ready for compromises, being patient, and ready for alternatives (Rametsteiner & Weiss, 2006).

Adaptability to Changing Conditions: The industrial forestry sector is no exception and has several extraneous factors, which can be considered as market volatility, legislative changes, and ecological issues. Previous business models are no longer the only path for entrepreneurs, and they must stay versatile and agile. This flexibility means that their reaction to these trends might change in time that is needed. For example, when launching a new wood product in an emerging market, its management can decrease production from traditional forests and choose a more sustainable alternative (Pralle, 2003).

Innovative Thinking: For businessmen operating in Iranian industrial forestry, innovation as a pillar is a nonnegotiable condition for retaining their market position amid rivals. The growth teams should search for avenues to develop it further through innovation in services and empowering the design of business models. Individuals with creative minds equate entrepreneurial activity; they come up with missed opportunities and advanced solutions to complex problems; thus, entrepreneurship is a radiant manifestation. For instance, the owner can point out that technological improvement means improving how the forestry area is managed to meet his expectations and is sustainable. (Boyd et al., 2001).

b) Booming Entrepreneurs Industrial Forestry Sector in Iran.

Iran Wood & Paper Industries (CHOUKA) is a company in industrial forestry, a forest field. Founded in 1974, the firm runs an integrated pulp and paper factory with the building on the road at kilometer 34 between Bandar-e Anzali and Astara. The business was initiated by collaborating with The Industrial Development & Renovation Organization of Iran (60% stake) and the Ministry of Agriculture and Rural Development (40% stake). On the other hand, the company went through many hardships during the Islamic Revolution, but finally, in 1979, the company’s operations were completed. Nonetheless, production stopped shortly after the inauguration because the construction company, Staedtler Hertz Corporation from Canada, did not fulfill the expectations and promises they had given. The resistance to the usage of machines caused production to stagnate until 1983 (Ghobadian et al., 2009). The reappearance of the plant was attempted, and in 1986, the plant was delivered to the National Iranian Industrial Organization, which led to an increase in production. In 1987, the company was structured by creating three separate companies, each aimed to conserve, exploit, and restore forests and produce wood products (Maleksaeidi & Memarbashi, 2023).

Conclusion

To sum up, a small business in the industrial forestry section in Iran faces both, the problems and the chances. The Iran entrepreneurship ecosystem is a strong one, with the existing initiatives and policies which are already in the process of being implemented to support entrepreneurship. The problems that have to be solved are still the hurdles. The elements that are the causes of the growth of entrepreneurial activities are the same as the finance, policy coherence, cultural attitudes towards entrepreneurship, and human capital development. To be a successful entrepreneur in the business scene of Iran, you need to have the qualities of being able to face the difficulties with ease, changing the plans as the situation demands, and lastly, a good network of people to support you. The local entrepreneurs are the proof that these qualities can be the basis of the success even when it is the target of the obstacles. The entrepreneurial ecosystem in Iran is advancing due to the fact that entrepreneurs are being helped and the proper attitude is being provided to them, therefore they can use the country’s potential to enhance the economic growth and the regional development in the Industrial Forestry sector.

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