I just returned from the Asian Science Park Association conference in Shiraz, Iran.[1] One Science Park official asked me, “Companies in our park cannot get any cooperation from the big petrochemical firms. What can we do?”

Science parks, R&D parks, knowledge-based industrial parks etc are part of the technopolis-building efforts that I’ve described here and here. They attempt to concentrate technology companies in a metro area for more efficient supply chains and better informal sharing of information, and put special emphasis on technology entrepreneurship.

In the entrepreneurial economy we build civic infrastructure and quality of life so that companies and employees and educated people will wish to live in the city. We want to build wealth locally. In the natural resource extraction industry, in contrast, the ethos is to build temporary settlements – sometimes even just camps.[2] Drilling and mining companies take away the natural resources, leave the indigenous population poorer, and leave behind environmental damage. 

The table shows the traditional ethos of the entrepreneurial and the resource extraction economies are antithetical to each other in all ways. (To be sure, many mining companies now embrace some form of Corporate Social Responsibility, and resource companies have adopted innovations – sometimes from entrepreneurial firms – in the areas of IT, mapping and discovery of deposits, and fracking.)

	Entrepreneurial economy modus operandi	Resource extraction economy modus operandi
Where the money goes	Build wealth locally, regionally	Take profits to distant countries
Where is the value-added	Build high-knowledge-added products&services	Locally perform extraction only. No value-added activity.
The environment	Build high quality of life	Leave locals to deal with environmental damage
The workforce	Attract educated workers	Attract roughneck workers
Infrastructure	Homes, parks, utilities, schools, cultural institutions	Temporary housing
Demographics	Attract families	Attract young single males

 

Everything we do to build an entrepreneurial economy amounts to nothing but a fly on the ass of the elephant that is the natural resource extraction/distribution economy, which is hundreds and perhaps thousands of times bigger than the entrepreneurship economy. 80% of Iran’s economy comes from oil and gas, making the country particularly susceptible to the natural resource curse.

Investopedia [3] defines the 'resource curse' in this way:

A paradoxical situation in which countries with an abundance of non-renewable resources experience stagnant growth or even economic contraction. The resource curse occurs as a country begins to focus all of its energies on a single industry, such as mining, and neglects other major sectors. 
As a result, the nation becomes overly dependent on the price of commodities, and overall gross domestic product becomes extremely volatile. Additionally, government corruption often results when proper resource rights and an income distribution framework is not established in the society, resulting in unfair regulation of the industry. The resource curse is most often witnessed in emerging markets following a major natural resource discovery. 
[It is] also known as the "paradox of plenty". 

The government commitment to build Science and Technology Parks and advance innovation is admirable. However, the government must also encourage the mining, oil and gas industries to be creators, not destroyers. Only then can goals become aligned and communication improve between the entrepreneurial economy and the resource extraction economy. They can then cooperate to create a true innovation economy. There are, however, nearly insuperable big-money politics to overcome before this can be a reality.

Iranians are proud of their ancient capital, Persepolis, dating from 500 b.c.e. I hope both the science parks and the oil/gas people wil take inspiration from it, and think, “What will our descendants 2500 years hence think of what we are building here today?

Your correspondent at Persepolis

Almost Halloween, so a good time for a ‘curse’ story!