The Vicious Cycle of Symbolic Research and Development in Iran: A Case Study of State-Owned Companies

Document Type : Original research

Authors

1 Faculty Member, Institute for Policy Studies, Sharif University of Technology

2 Associate Professor, Institute for Policy Studies, Sharif University of Technology

Abstract

The aim of this qualitative research is to analyze the seemingly invisible feedback loop among "financial rent stemming from energy subsidies," "controlling bureaucracy," and a "venture capital void" in Iran's state-owned companies. This cycle is largely overlooked by the linear literature on "technology realization through financial support." The prevalent notion, rooted in paradigms such as "strategic technology projects based on subsidized budgets" and the "Triple Helix model of government, industry, and academia," implicitly assumes innovation growth through cheap financial injections or legal mandates. However, the findings of this study reveal hidden causal loops behind this facade that, if not understood systemically, steer innovation towards bureaucracy and rent-seeking. This research clarifies three fundamental gaps in the dominant literature: First, it overlooks the behavioral mechanism resulting from financial rent, which diminishes motivation for market-driven research and increases inclination towards low-risk projects. Second, it reduces administrative bureaucracy to a ceremonial variable, without explaining its connection to venture capital failure. And third, it neglects the venture capital void or reduces it to an external variable. In contrast, this qualitative study, by integrating interview data and Gioia methodology for coding, proposes a "feedback framework" that interlinks financial rent, administrative bureaucracy, and the venture capital void within a synergistic cycle. This cycle demonstrates that rent reinforces bureaucracy, drives away venture capital, and the absence of venture capital, in turn, makes government rent the sole financing option, ultimately leading to "symbolic R&D and closed innovation." Relying on Gioia's approach and analyzing semi-structured interviews with senior managers of state-owned companies, sixteen explanatory themes were extracted across three institutional, interactive, and technological axes. The research findings indicate that rent-seeking R&D is a behavioral-structural phenomenon that leads to superficial R&D.

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Main Subjects

References

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History

  • Receive Date: 07 May 2025
  • Revise Date: 27 July 2025
  • Accept Date: 02 August 2025

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