Small and medium enterprises in Iran face serious challenges in renovation and productivity. While artificial intelligence is recognized as a key tool in improving productivity and supply chain management, small industries in Iran are still in the early stages of this transformation. This is while more than 92 percent of the country's total industrial units belong to these enterprises and account for over 45 percent of industrial employment.
Challenges and Opportunities
Analyses show that the share of small enterprises in the total value added of the economy barely reaches 17 percent. This productivity gap is the result of outdated machinery and a lack of connection to modern production technologies. Given that the penetration of artificial intelligence in small industries in Iran has dropped below one percent, these enterprises are in dire need of renovation.
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In contrast, countries like Turkey and the UAE have managed to raise the share of smart technologies in the supply chain of SMEs to double digits by using tax incentives. Meanwhile, Iranian small enterprises still face difficulties in securing working capital for renovating machinery from the past decade.
Benefits of Artificial Intelligence in Production
Implementing artificial intelligence in manufacturing workshops can lead to waste reduction and increased efficiency. For example, in parts manufacturing and food industries, using machine vision algorithms at quality control stations can reduce human error rates by up to 70 percent. Additionally, employing predictive maintenance can prevent sudden production line stoppages and help reduce production costs.
Currently, fuel and electricity consumption optimization algorithms are proposed as effective solutions to address the challenges of energy imbalance and frequent blackouts in different seasons. However, entering this field requires overcoming various obstacles, some of which include high investment costs and workforce resistance to changes.
Proposed Solutions for Renovation
To improve the situation of small industries, there is a need for targeted policy actions and cloud service aggregation models for industrial parks. The Ministry of Industry, Mine and Trade and the Small Industries Organization should collaborate with the Vice Presidency for Science and Technology to provide shared processing and software infrastructure for workshops.
Implementing tax exemptions for industries that equip part of their processes with smart technologies can increase investment attractiveness. Moreover, establishing technology co-creation centers alongside industrial hubs can create a direct link between artificial intelligence elites and industrial craftsmen, ensuring the survival of small enterprises in market competitions.
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