Strengthening cooperation between the private sector and the government
is crucial to overcoming challenges and driving progress across all segments of
the industry.
The private sector serves as the driving force of the economy,
leveraging innovation, flexibility, and initiative to navigate economic
challenges. However, for long-term success, government support in removing
regulatory barriers, facilitating business conditions, and ensuring a
competitive environment is essential. By adopting a regulatory and facilitative
role, the government can enable private enterprises to thrive.
Ali Lashgari, a board member of the Iranian Footwear Industry
Association, emphasized the significance of research and development (R&D)
in industry competitiveness, particularly in light of challenges such as energy
imbalances affecting production and investment.
The energy imbalance, particularly power and gas shortages, has
negatively impacted production levels, especially among small and medium-sized
enterprises (SMEs). With ongoing power cuts, many companies have faced reduced
output, affecting their budgetary expectations for 2024.
Although some industries have sought solutions to mitigate energy
shortages, financial constraints limit their ability to implement alternative
strategies. The crisis has, however, highlighted the importance of cost
analysis, leading companies to reassess energy expenses and enhance operational
efficiency.
A lack of investment in market research and innovation has weakened
many firms, particularly in sales. Without analyzing consumer preferences,
market trends, and generational shifts, companies struggle to remain
competitive. Unlike in the past, where access to credit and government
contracts provided a safety net, today’s firms must rely on market-driven
strategies.
Industries such as footwear, where consumer preferences evolve
rapidly, illustrate the need for continuous product innovation and sales
network expansion. The failure to update production models, understand customer
demands, and adopt modern technologies can render companies obsolete.
Drawing lessons from the COVID-19 pandemic, industry leaders must
prioritize knowledge sharing and collective problem-solving. In difficult
times, learning from successful enterprises can help struggling businesses
adapt and recover. The polymer industry, in particular, must leverage industry
associations, national councils, and specialized media to facilitate
discussions and disseminate best practices.
Iran’s 14th government administration is expected to streamline
regulations, eliminate bureaucratic hurdles, and distinguish between productive
private enterprises and rent-seeking entities. Over the past two decades, the
dominance of quasi-state enterprises (so-called “pseudo-privatization”) has
hindered true economic liberalization.
A strong and responsible private sector, free from rent-seeking
practices, can significantly contribute to national economic development.
However, private sector players must also take an active role in proposing
solutions rather than merely advocating for reforms.
The National Petrochemical Company (NPC) must adapt to evolving
industry demands. The Office for the Development of Downstream Industries alone
cannot address all sectoral challenges, making collaboration with other key
stakeholders essential. Updating the NPC’s R&D, planning, and strategic
development units is necessary to ensure they provide effective support to
downstream industries.
Given that value-added and job creation primarily occur in the
downstream sector, a modernized approach to policy and regulatory frameworks is
critical. Data from the National Polymer Industries Association indicates an
increasing reliance of downstream industries on petrochemical producers,
highlighting the need for an integrated growth strategy.