After oil and gas, the automobile industry is Iran’s third largest, accounting for approximately 10% of the country’s GDP and employing about four percent of the country’s workforce. Despite setbacks from sanctions, which saw Iran pull back as the number one automobile developer in the Middle East to second place behind Turkey, the auto industry has been growing. The past decade has shown a six fold increase in production, fueled by both domestic and foreign demand. Today, the industry produces around 1 million cars each year.
Iran’s construction industry, currently valued at about $154 billion, is central to the country’s economy and promises steady growth. While the construction industry was in decline before international sanctions were lifted, it has made a quick turnaround: output value is expected to rise at a compound annual growth rate of 6.34% through 2020. Investment opportunities are also increasing as the country opens up to more international markets and new infrastructure is needed.
Iran has long had its share of environmental issues including air pollution, water management, and the effects of climate change. But in 2016, major developments in environmental policy in Iran helped boost the country’s “green” status. For instance, Iran passed the Clean Air Bill, imposing fines on excess air pollution, and became the 106th nation to ratify the Paris Agreement in early November 2016. Additionally, the Iranian Department of Environment endorsed several successful environmental campaigns such as “Car-Free Tuesday” and a plan to protect the Persian Leopard.
Since implementation of the JCPOA, Iran’s environmental protection sector has also seen an increase in foreign investment. For example, in 2016, Iran and Germany signed a memorandum of understanding to construct environmentally friendly housing in Hashtgerd and Isfahan. Member of the Board of Instructors at Düsseldorf University in Germany Fereydoun Bodaghi says that Iran could soon attract over $20 billion in investments, and notes that the environmental protection sector seems one of the most promising areas.
Iran may not be high on most Americans' lists of top tourist destinations, but the tourism industry there has been doing quite well. Home to a rich cultural and historical heritage, Iran contains architectural remnants that date back over 2000 years with 19 major archaeological sites having been named UNESCO World Heritage Sites. After implementation of the JCPOA, the number of tourists visiting in Iran rapidly increased, with Iran currently generating some $8 billion from tourism. The country expects that number to jump to $30 billion by 2025, with nearly 20 million tourists visiting annually and providing over 1.9 million Iranian jobs.
Over 60 percent of Iran’s approximately 80 million people are under the age of 30. Since this is the preferred demographic for marketing, it is no surprise that international and local brands alike are competing to reach untapped markets among the nation’s growing youth. Indeed, the advertising industry in Iran has already grown into a 600-million-dollar giant. Moreover, since Iran has the largest internet and smartphone penetration rate in the Middle East, “Advertising Technology” (AdTech) now plays a major role in modernizing marketing and advertising strategies in the previously economically isolated nation.
Iran fosters a thriving domestic tech scene that hosts multi-million dollar companies like Café Bazaar and Aparat and appears ripe for further growth after sanctions relief from the JCPOA. Around two-thirds of Iran’s population is under the age of 35, while 42% are under 24. In addition to a sizeable young, tech-savvy population, there are roughly 56 million Internet users in Iran, forming a substantial potential customer base for cutting-edge tech startups.
Prior to the implementation of international sanctions, over 57 private and public foreign bank branches operated outside of Iran, with that number declining until all were eventually closed. With sanctions lifted in January 2016, over 50 new branches are expected to open internationally. There are currently requests by several banks to open branches and resume business within Iran, though some have already begun to handle customers’ transactions within the nation.
“The government will never be a good manager in industry, including the car industry. The sector should be completely privatized and competitive. The partnership [with foreign carmakers] will drive us ahead.”
With these words, President Hassan Rouhani, in a nationally broadcast speech, invited foreign investment to participate in Iran’s auto industry. Following years of devastating sanctions on manufacturing, analysts believe Iran’s auto parts industry, the nation's secondlargest economic sector, is ripe for growth.
Iran’s hospitals are undergoing rapid development. In 2012, the Ministry of Health and Medical Evaluation initiated an evaluation system for hospitals in Iran to bolster the quality of services provided. And, in 2014, the Iranian government announced a new program to extend health insurance coverage to all Iranians, in the fashion of “Obamacare” in the United States. Under the new Tarh-e Salaamat health plan, the state pays for 90% of patients’ medical bills in hospitals. Thus, while Iranian hospitals do face challenges in structural support and resources, there are significant opportunities for growth in the country’s medical sector.
Following last year’s implementation of the nuclear deal, companies around the world have taken a serious interest in the Iranian telecommunications industry. The population of Iran, the second-largest in the Middle East, is mostly young – over 60% of Iranians are below the age of 30 – and, therefore, more likely to consume new technologies, cellular devices, and electronics. Thanks to deregulation, the introduction of 3G and 4G network services, and a robust start-up culture, Iran’s telecom industry offers a promising, and highly lucrative, new frontier for the global economy.