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What is the demand for digital talent in Iran? and how big is this market?
Hello and thanks for asking Wonder about the demand and market size for digital talent in Iran.
In short, I found that Iran's digital tech scene is currently behind the Western world, but aims to close the gap. By 2020, the software industry should be around $3B USD. There is much optimism about the future of technology in Iran, despite myriad challenges. In terms of digital talent, Iran faces very high brain drain, coupled with low incomes in the tech sector, causing many bright young Iranians to seek employment elsewhere. Despite that, there is some optimism about the current opportunity that this represents in terms of finding cheap, smart labor in a newly growing economic sector.
METHODOLOGY
I searched for information and statistics about Iran's tech scene from industry reports, trusted media sites, government websites, and found estimations on Statista. I know this this industry is growing rapidly, and thus I searched for the most recent sources that would have the most updated data and information.
Note that much of the available information refers to the entire tech industry, which includes digital technologies, but not exclusively. Where possibly, I extracted information about digital, but this information is largely related to Technology in Iran as a whole.
I will split my research into two sections: first about the market size and overview of the Iranian digital market, and second, about the need for employees and talent in this market.
IRANIAN TECH: A GROWING MARKET
Hardware: $4.4B USD
Software: $1.3B USD
IT Services: $1.6B USD
By 2020 it is expected to be:
Hardware: 6.2B USD
Software 2.9B USD
IT Services 2.3B USD
You can see from their projections that in the coming years, the hardware IT market in Iran is expected to grow by around 40%, software by around 120%, and IT services by around 40% as well. Iran is behind the Western world in terms of tech, but aims to close the gap.
According to this article in The Drum, Iran has 45M internet users, and in 2008, exported $50M worth of software, and had 1,200 registered IT companies.
With a population of nearly 82M, a 45M internet user base represents penetration of almost 55%. This represents the highest number of internet users in the Middle East, but that might say more about the Middle East than it does about Iran.
Despite this high internet penetration, this sector still faces difficulties from "government censorship, unwillingness to invest in digital", slow internet speeds and infrastructure, and international sanctions.
Online and mobile activity has skyrocketed in Iran, with 62% of Iranians spending at least one hour a day on social media, and 38% of Iranians use instant messaging several times daily. As more technology is consumed and utilized in Iran, there will be a greater need for digital talent to serve this population.
There is widespread optimism about the future of Iranian tech. This article points to six trends that will shape the future of the Iranian tech sector including government spending, start up funding, keeping Iran's talent at home (more on this in the next section), promoting entrepreneurship, reforms to internet access, and creating an alternative narrative. It suggests that Iran may very well become a regional leader in this space.
According to an article in Fortune Magazine, the Iranian market is opening itself to foreign investment, and could be called "Iran's Startup Spring". The CEO of Sarava, Iran's first technology investment company, was quoted saying "If someone wants to invest in Iran, this is the right time to do it." The article continues that there are at least 400 startups in Tehran alone, and although they currently make up less than 1% of Iran's GDP, they have the potential to make a big future impact.
Finally, Iran is the second largest computer-games market in the Middle East, and hosts a number of international gaming events yearly. This points to a tech-based forward-looking industry that is flourishing in Iran, and requires and develops digital talent.
NEED FOR DIGITAL TALENT
Iran's tech industry is growing, but still behind the Western world. The CEO of an Iranian marketing agency called Badkoobeh argues that the economic difficulties in Iran are a factor behind this, as well as the "lack of academic talent to populate marketing teams". This is exactly the niche that you want to enter, and a local CEO agrees wholeheartedly that the lack of digital talent is a key concern when building and scaling a digital business in Iran.
Additionally, due to widespread unwillingness to invest in technology, the digital offerings of many businesses are woefully behind their Western counterparts, and secondly, potential employees who might want to build a career in the digital space are "quickly disheartened at the low incomes available". So not only it is a matter of finding and training new employees, but also ensuring that these newly minted digital employees are paid commensurate salaries.
Regarding current recruiting and hiring practices in the tech world of Iran, this article describes the field as a "personal talents field", where it doesn't matter what the candidate studied, as long as they have the desired personal traits, experiences, and skills. Such as: do they present themselves well? Are they persuasive? What is their risk profile? Do they question standards? How fast can they learn SEO and CRM? Recruiters are looking for top candidates in these personal skills and traits, and are less concerned about their digital training. At least for now, perhaps a reputable digital skills academy in Iran would become the new standard for employment in the sector.
Another problem in Iran is the fact that it faces one of the highest rates of brain-drain in the world. Each year, around 150,000 specialists leave Iran for better opportunities. Creating a lucrative labor market in Iran is critical for attracting talent, and perhaps more importantly, retaining it.
Finally, a Canadian-Iranian entrepreneur named Vahid Jozi launched a data-analytics company called Kimlik in Tehran, after launching 4 startups in Canada. His decision to move his business focus to Tehran was due to "seeing key advantages in Iran's low wages and large numbers of skilled people. The return I get in investing one hour in Iran is higher than almost anywhere else." So according to Jozi, the local population is highly skilled, and underpaid, which represents a valuable business opportunity.
SUMMARY
Iran's tech sector is growing, Iranians are consuming more digital content than ever, and digital offerings of local businesses are outdated. Currently, many young professionals seek employment outside Iran, or in other industries, but that perhaps represents an opportunity to enter this industry on the ground floor, and help bring about the change toward a skilled workforce in the digital industry in Iran.
Thanks for asking Wonder, and don't hesitate to ask again.