Iran’s Digital Economy Has Outgrown Its Capacity for Representation

Several years ago, in a commentary titled “The Need to Establish a Chamber of the Digital Economy,” I tried to raise an issue whose underlying problem, I believe, remains unresolved: Iran’s digital economy has grown much faster than the institutions intended to represent its interests.

The debate, then as now, is not about the name of a new association. “Chamber of the Digital Economy,” “federation,” “confederation,” “private-sector council” or any other title is of secondary importance. The central question is whether, for an economy with millions of stakeholders, hundreds of thousands of businesses and a substantial volume of private investment, we have built commensurate institutional capacity to examine regulations, defend participants’ rights, assess the effects of decisions and engage in specialist dialogue with the state.

Today, this question matters more than it did several years ago. In 1404, the Minister of Communications told an open parliamentary session that around 10 million people earn their livelihoods directly or indirectly from the digital economy. In the same report, he discussed the substantial damage that communication restrictions had caused to employment and economic activity in this sector. Even if we disagree about the precise boundaries of the “digital economy” and how to measure it, the scale of the issue is clear: we are no longer discussing a small group of startups, but a segment of the country’s labour market, a large chain of private investment and millions of households. [1]

This article is not an assessment of the individuals or current managers of any association. Its subject is structural capacity and the quality of representation: how many professional staff, how much funding, what consultative mechanisms and what capacity to produce data and analysis does the private sector have to continuously represent the lawful interests of participants in this economy as regulations and public decisions proliferate?

To examine Iran’s situation, it makes sense to distinguish between three types of institution. First is the National Union of Virtual Businesses, which has a formal role in organising virtual businesses and handling their trade affairs under the Trade System Law. Second is the Tehran Internet Businesses Employers’ Association, established under the Labour Law and the Ministry of Cooperatives, Labour and Social Welfare.

The Iranian ICT Guild Organization is undoubtedly one of Iran’s most important information technology associations. However, its main focus and historical mission lie more in the software industry, information technology services and ICT companies. For this reason, I keep Nasr at the periphery of this article rather than treating it as a direct equivalent of an e-commerce or internet business association. This distinction is necessary: not all institutions described in public discussion as the “digital private sector” have the same statutory scope of representation or membership composition.

Two central actors and one peripheral actor

To avoid relying solely on personal impressions, the Union’s official output was reviewed for the period from 17 February 2025 to 2 October 2026. During this interval, 41 relevant news items were identified in its official archive. They were not classified by headline alone: where it was unclear whether an item represented a demand by the Union or merely relayed a circular, its full text was also examined. [2]

These percentages are not statistics published by the Union; they are the result of analytical coding of its official archive. The distinction between “news useful to members” and “defending members” is decisive here. If a government body introduces a tax credit, quota or support opportunity and the Union publicises it, that news may be entirely useful to members. But this is not the same as an association challenging a decision, calculating its economic impact or calling for a regulation to be amended.

Under a strict definition, around seven of the 41 items in this period can be classified as direct advocacy. By contrast, nearly three out of every ten items were published primarily to relay regulations, instructions or requirements issued by public bodies. This does not mean such information is unnecessary; a formal union naturally has regulatory responsibilities too. It does, however, raise an institutional question: if an association simultaneously serves as the channel through which government duties are passed on to businesses and as those businesses’ representative before government, how much of its limited capacity actually remains for the latter role?

The Union: how many news items actually defend members?

The Tehran Internet Businesses Employers’ Association has a different structure and operates under Article 131 of the Labour Law and the regulations governing employers’ associations. At first glance, one might assume that such an association’s remit is confined to labour relations, employers and social security, but the regulatory text imposes no such limitation.

Article 23 of the regulations on the formation and operation of trade associations lists employers’ association duties such as seeking to uphold members’ trade rights and legitimate demands, collecting information and researching problems, planning the expansion of activities, improving productivity and promoting technological innovation. Article 131 of the Labour Law also provides for provincial confederations and a national confederation to coordinate associations. [4]

The problem, therefore, is not a lack of statutory authority. It is that, within the architecture of digital economy policymaking, such associations generally lack a permanent, formally mandated and organised seat for reviewing regulations in this sector. Having specialists in the private sector is one thing; having a formal route for turning their expertise into an input to decision-making is another.

The employers’ association: statutory capacity exceeds its practical standing

Here, I need to make a point fairly and on the basis of practical experience. We know that, for more than a decade, substantial efforts have been made to establish trade associations for internet businesses in different provinces and cities across the country. We have witnessed some of these efforts at close quarters and know that many participants in this sector have worked with sincerity and responsibility, investing their own time and money to establish or sustain such associations.

The problem, then, is not a lack of effort or specialist people. It is that these efforts have not yet become a coherent, visible national network with collective strength proportionate to the size of the digital economy.

A simple sign of this problem is that, even today, it is difficult to obtain clear, up-to-date figures on the number of active associations, their members, their areas of activity and their organised links with one another. Even the websites and official channels of active associations generally do not provide a comprehensive picture of their peers and counterpart organisations in other provincial capitals.

This situation in no way diminishes the value of the work undertaken over these years to establish and manage these associations. On the contrary, it may indicate that the current model of cooperation and networking has not been taken as seriously or institutionalised as fully as its real importance warrants, even by association participants themselves. Naturally, a structure unable to identify, connect and represent its dispersed capacities nationally will also find it harder to be recognised by government and legislative institutions as a strong, nationwide counterpart.

This is precisely the purpose of this article: not to count associations for a superficial comparison, but to identify the combined pool of qualified specialists, associations and trade institutions that could form the components of a larger, genuinely national structure in the future. Its representatives would come not only from Tehran, but from across the country and every field of this new economy.

E-commerce, platforms, online services, the content economy, digital advertising, fintech, logistics, online tourism, digital health, online education, artificial intelligence and many other fields do not face identical issues. Equally, the problems of an internet business in Tehran are not necessarily the same as those of a participant in the same field in Isfahan, Mashhad, Shiraz, Tabriz, Ahvaz or other provinces.

If an institution truly representing the private-sector digital economy is to emerge in the future, this geographical and specialist diversity will be one of the foundations of its legitimacy, rather than a peripheral feature.

For this reason, I do not consider the information in this section definitive or closed. I invite friends and colleagues who are active in trade associations in different provinces, have helped establish them or have more precise information about their current situation to share that information so this part of the report can subsequently be corrected and completed.

The aim is not to demonstrate an association’s weakness or overlook past efforts. It is to understand what human and associational capacity already exists in the country today but has yet to become a coherent national force.

Provincial associations: serious efforts that have yet to become a national network

Interestingly, despite the Tehran association’s more limited resources, its media orientation differs. Around 13 main news items were extracted from its website for the same review period. Around six were clearly direct advocacy: banking issues, internet restrictions, filtering, the e-Namad trust mark, social security and pressures on internet businesses. [3]

If we also count the questionnaire collecting members’ losses, designed to provide documentation and pursue their demands, as part of the advocacy process, the figure is around seven. Thus, around 46 to 54 percent of the association’s reviewed news output involved defence or advocacy. The overall number of items is small, and its statutory duties are not identical to the Union’s. Consequently, this percentage alone cannot establish that one institution is “better.” What it shows is a difference in organisational role and the direction of communication with the state.

Fewer news items, more advocacy

No official, standardised public data have been published on these associations’ staff numbers. For the Tehran association, this review uses around 10 people as a working assumption. For the Union, based on organisational size and the scope of its duties, a range of 15 to 25 operational staff is used solely as an order-of-magnitude estimate. These figures are not official statistics.

For an initial calculation, therefore, the combined staffing of the two main institutions can be assumed to be around 25 to 35 operational employees. Not all are policy specialists: finance, administration, membership, licensing, public relations and secretariat work consume part of the organisation’s workforce. If we assume that the population directly and indirectly connected to the digital economy is 7 to 10 million people, there would be around 0.25 to 0.5 association operational staff per 100 thousand economic stakeholders. The number of full-time policy and trade advocacy specialists is probably lower.

This ratio is not precise and should not be quoted as an official statistic; its value lies in illustrating the order of magnitude of the gap. In Iran, even the number of FTEs whose principal remit is legal analysis, regulation and advocacy is not reported publicly in a standardised form.

Staffing: a worrying but approximate ratio

Germany offers an instructive example, not because its structure should be copied in Iran, but because advocacy there is visible and auditable. The German parliament’s Lobbyregister requires associations working to influence policymaking to disclose some of their resources and activities.

According to its entry for the 2025 financial year, Bitkom registered 24.32 full-time-equivalent staff solely for interest representation and around 5.15 to 5.16 million euros in annual spending on this activity. The same entry shows 2218 members, 222 specific regulatory matters and 200 expert opinions or reports. [5]

For the 2025 financial year, BVDW registered around 4.20 FTE and 370 to 380 thousand euros in annual spending on interest representation. Germany’s e-commerce and distance-selling association, bevh, also registered 510 members, 3 FTE and 680 to 690 thousand euros in annual advocacy spending. [6][7]

Together, these three associations account for around 31.52 FTE devoted solely to interest representation and more than 6.2 million euros in registered annual spending on this activity. These figures do not cover their entire workforces, only the portion specifically dedicated to representing interests. Perhaps this is the central difference: in Iran, we still have to estimate associations’ total staff numbers, whereas in Germany full-time advocacy staffing and expenditure are officially visible.

Germany: when industry advocacy is a measurable line item

A concise comparison of advocacy capacity in Germany

South Korea offers another model. The Korea Internet Corporations Association, or K-Internet, is not merely an association office providing member services; policy proposals and regulatory review feature prominently in its mission and public output. Its “2025 Internet Industry Regulation White Paper” reports the scale of Korea’s internet industry in 2024 at around 718.8 trillion won in sales and 2.167 million people employed. Alongside market size, the white paper analyses the quality of regulatory design and the effects of legislation on business decisions. [8]

Between February 2025 and the end of September 2026, around 65 outputs can be identified from the numbers and dates in the association’s Press Release/Articles archive. Thematic coding of this material indicates that approximately half or more of the outputs directly concern regulations, public policy, assessments of legislative impact or defence of companies’ operating environment. This percentage is an analytical estimate from the archive, not an official association statistic. The overall orientation is clear, however: the association does not simply receive regulations; it produces knowledge and proposals for regulation.

KOSA, the Korea AI & Software Industry Association, illustrates another role. At the time of review, its official website displayed more than 12 thousand member companies and described activities including research and proposals to amend software laws and policies, workforce training, market development, exports, software service pricing guidance and dispute resolution. [9] In this model, advocacy sits alongside extensive industry services.

South Korea: the association as a producer of policy knowledge

A discussion of private-sector capacity is incomplete without examining public resource flows. In recent years, the Presidential Vice Presidency for Science, the Innovation and Prosperity Fund and other components of the knowledge-based financing system have announced large amounts of financial support, loans, guarantees and investment. This support is not necessarily specific to virtual businesses, and the “knowledge-based” target population is much broader; the analysis must respect this distinction.

For example, reports published for the first six months of 1404 put the Innovation Fund’s total financial services in the tens of thousands of billions of tomans. The existence of such resources is not inherently negative. The more important question in evaluating public policy concerns the quality of outcomes: what kinds of companies received these resources, and what measurable results did they generate?

To evaluate the digital economy, it is important to publish data that can, at a minimum, distinguish genuinely private and independent companies from other recipients. It must also be clear how much support went into product development, research and development, exports, infrastructure or capacity expansion, and how much went into working capital, covering losses or sustaining operations on the brink of crisis. Each use may have its own policy justification, but without distinguishing them, it is impossible to assess the impact of “investment for progress.”

Outcome indicators also matter: growth in sales, exports, employment, productivity, intellectual property, new product introductions or private investment attracted after receiving support. Numerous official, publicly available aggregate reports describe the volume of support. However, among the public sources reviewed for this article, no comprehensive, standardised dataset was found that brings together, for each company, the recipient’s name, amount, type of support, use and measurable outcome. This statement does not imply that the agencies lack internal data; the issue is the level of public disclosure and the possibility of independent evaluation. [10]

Outcome-based transparency also benefits the supporting agency. Such data allow policymakers and the public to distinguish resources used for survival from those that actually created new capacity, and to expand successful programmes on the basis of clear evidence.

Where does development funding go, and with what results?

The comparison of Iran, Germany and South Korea yields no simple answer. Iran channels substantial public resources into the knowledge-based economy, has trade associations, and sees hundreds of private-sector managers and specialists participate in various commissions and meetings. The issue therefore cannot be reduced to “nothing has been done.”

Yet a structural gap is apparent: the sector’s economic scale has outgrown its organised capacity for representation. A decision about the internet, payment gateways, taxation, insurance, transport, medicines, gold, advertising, privacy, artificial intelligence or marketplaces may quickly affect thousands of businesses and a large number of workers. In such an environment, occasional participation by a few experienced managers is insufficient.

A structure is needed that can measure each regulation’s economic impact, prepare legal text, assess international examples, gather members’ views, offer alternatives and subsequently evaluate the results of implementation. This requires permanent specialist capacity, rather than merely the ancillary work of volunteer board members.

Is the problem a shortage of capital or representation?

This article does not seek to conclude that only one organisational form can address the problem. A “Chamber of the Digital Economy” is one model worth examining. Other models could include a federation of existing associations, a national confederation of employers’ associations or a shared, independent advocacy mechanism.

What must be assessed in any model is its structural characteristics: is decision-making genuinely controlled by the independent private sector? Can small and large enterprises both be represented? Does it have full-time staff for economics, law, regulation, data and technology? Is its advocacy budget transparent? Does it report its position on each regulation and the outcome of its follow-up? And is there a formal mechanism requiring public bodies to receive its views and respond with reasoned explanations?

In such a model, government’s role is not removed; rather, the relationship between government and the private sector becomes more formal and measurable. The public decision-making body sits on one side of the table, and the private sector, with its own data, specialists and representative mechanisms, on the other. The central aim is to create an institutional balance that reduces the likelihood of costly, insufficiently examined decisions.

Is a “Chamber of the Digital Economy” the answer?

A substantial share of employment in Iran’s digital economy has emerged without government hiring and, in many cases, without direct government investment. Platform drivers, online sellers, programmers, couriers, content creators, SaaS companies, digital agencies, marketplace stores, logistics providers and hundreds of other groups are part of this economy.

At the same time, this economy is highly sensitive to public decisions. An internet disruption, banking circular, sudden change in licensing conditions or insurance or tax decision can affect large numbers of businesses within hours. As the economy grows, so does the cost of policy mistakes.

The central issue, therefore, is not how many associations we have, but whether the private sector’s combined independent expert capacity is proportionate to the risk that public decisions create for this economy. In Germany, one can see how many FTE and how many millions of euros are devoted to interest representation. In Korea, one can consult the industry regulation white paper. In Iran, we still lack clear statistics even on the number of full-time specialists whose primary remit is evidence-based advocacy for the digital economy.

Several years ago, “Chamber of the Digital Economy” was the title of a proposal. Today, perhaps the more fundamental question is: for an economy on which millions of people depend for their livelihoods, how much independent, professional capacity have we built to represent private-sector interests? If the answer is smaller than the economy itself, the name of the institution intended to fill this gap will not be the most important issue. What matters is that the gap is recognised and measured, and that a data-based discussion develops around institutional ways to close it.

An issue bigger than an association’s name

1) The period for comparing Iranian and Korean news was set from 17 February 2025 to 2 October 2026. 2) The percentages for news orientation are analytical coding by the author/research based on headlines and, in borderline cases, the full news text; they are not official association statistics. 3) Staffing figures for Iranian associations are order-of-magnitude estimates and are not directly comparable to official advocacy FTE in Germany. 4) Tehran Nasr was excluded from the core direct comparison because its mission differs and its organisational news is mixed with media monitoring. 5) All figures and source pages were reviewed as available up to 2 October 2026.

Methodology note

[1] Government Information Portal — citing the Minister of Communications’ parliamentary report on around 10 million people earning livelihoods in the digital economy — 31 Tir 1404

https://t.me/s/PadDolat/154985

[2] Official news archive of the National Union of Virtual Businesses — basis for extracting 41 news items during the review period

https://ecunion.ir/news_archive

[3] Official news archive of the Tehran Internet Businesses Association — basis for extracting and coding the association’s news

https://eanjoman.ir/news

[4] Regulations on the Formation, Scope of Duties and Powers of Trade Associations and Related Confederations — Article 23 — regulatory text associated with Article 131 of the Labour Law

https://www.solh.ir/regulation/7/5470

[5] Lobbyregister Deutscher Bundestag — Bitkom e.V., R000672 — information for the 2025 financial year: FTE, expenditure, members and regulatory activities

https://www.lobbyregister.bundestag.de/suche/R000672/77376

[6] Lobbyregister Deutscher Bundestag — Bundesverband Digitale Wirtschaft (BVDW), R000257 — information for the 2025 financial year

https://www.lobbyregister.bundestag.de/suche?q=R000257

[7] Lobbyregister Deutscher Bundestag — bevh, R000747 — information for the 2025 financial year and membership numbers

https://www.lobbyregister.bundestag.de/suche/R000747/80490

[8] Korea Internet Corporations Association — 2025 Internet Industry Regulation White Paper — sales and employment in Korea’s internet industry in 2024 and regulatory analysis

https://www.kinternet.org/03_new/new04_view.asp?idx=2574

[9] Korea AI & Software Industry Association (KOSA) — official website and introduction to activities — the association’s membership numbers and fields of activity

https://www.sw.or.kr/site/sw/main.do

[10] Innovation and Prosperity Fund — statistical reports section — for tracking aggregate financial support statistics; access to some pages may be restricted

https://www.inif.ir/

References