I come from Iran, a country the Western world often knows as Persia. Some global institutions categorize us as an emerging market, yet factors like inflation, corruption, and the devaluation of the national currency cast doubt on this classification. In my opinion, these issues are mostly political, tied more to questions of power than to pure economics.
In this post, I want to highlight one of the major challenges of entrepreneurship in developing countries, a challenge that I believe relates in part to liberal thought. For example, in the West—especially in the United States, with its longer history of entrepreneurship—one of the drivers behind business growth has been peer support and the value chain. In developing countries, particularly Iran, where state-centric views are intertwined with religious ideology such as Islamism, this circle of support rarely forms easily.
When I lived in Russia, I also observed a similar situation. The legacy of a state-driven economy and communism still lingers there, creating the same challenge of limited “social support” that we see in other emerging markets. Yet, I was fortunate to study in a liberal-oriented environment at the Higher School of Economics (HSE), where I became familiar with Russian entrepreneurial approaches.
In Iran, this challenge is deeply cultural. Many people still identify strongly with family names. Since the feudal-like system of “Khans and peasants” prevailed during the Qajar dynasty, competition between families has long discouraged the rise of individuals who could become, for instance, “a Bill Gates.” Later, during both the Pahlavi dynasty and the Islamic Republic, the Haji Bazaari phenomenon has dominated—a class with a traditional view of business that often resists change and innovation. This is not to say these groups are in constant conflict; rather, it reflects the roots of how business development has evolved here. Inheritance, for instance, plays a far larger role in entrepreneurship in Iran than in the United States.
Still, liberal traditions in Iran are not entirely absent. For example, Amir-Abbas Hoveyda, the Shah’s long-serving Prime Minister, studied at the liberal Free University of Brussels and applied some liberal policies during his 13 years in office. Under his policies, companies such as Iran Kaveh, founded by Asghar Ghandchi, who assembled American Mack trucks in Iran, and Kafsh-e Melli, created by Mohammad Rahim Irvani with modest innovations and exports to the Soviet Union, emerged. These were not unmatched examples, but they represented businesses built on creativity rather than tradition.
After the revolution, the first liberal-inspired movement, the Freedom Movement of Iran (Nehzat-e Azadi), appeared with ideas blending liberalism and Islam
. But Islamists quickly pushed them aside. The most recent attempt to revive liberal tendencies has appeared in the Women, Life, Freedom movement, though at times it carries a more radical tone.
Still, these are only necessary conditions. The sufficient condition for the emergence of “social support” is cultural. It requires entrepreneurs to keep innovating—and customers to buy their products with enthusiasm and support. Unfortunately, in Iran, attitudes often lean toward envy and non-cooperation. Authoritarian thinking sometimes seeps into society, and people unconsciously internalize it.
The lack of reform in capitalism also plays a role. As mentioned earlier, many Iranian businesses—such as the Rezaei family’s creation of HEPCO Arak, which gradually became an industrial giant, or the Asgaroladi family’s ventures in the Islamic Republic—were rooted in inherited capitalism rather than creativity. This lack of innovation has contributed to both the revolution under the Shah and nationwide protests under the Islamic Republic.
While small businesses are considered the backbone of the American economy, in Iran this is not the case. As a result, many talents remain underutilized—or emigrate. If you are a reader from the United States, you know that Republicans there have a somewhat similar, though differently styled, family-based approach to entrepreneurship, often backing dynasties such as the Rockefellers, Trumps, or Carnegies. That is why, when you vote for Liberal Democrats, you typically strengthen funding for small businesses and expand opportunities for creativity and innovation.
Thank you very much for reading this piece. Perhaps one day, your presence as tourists—especially Americans—and the spread of your culture of support may play a role in shaping the development of Iranian businesses
