Proposing an Institutional Framework to Increase the Effectiveness of Government and Public’s role in enhancing Technological Capacity of Internal Productions: A Case Study of the Maximal use of internal capabilities law

Global experience has shown that policymakers in both developing and developed countries have always used the leverage of the domestic market to enhance their country's technological capability as an important and effective policy instrument. In Iran, the most important policy in this area is the law of “maximal use of internal capabilities”, which despite the modification of the initial version in 2012, seems to have failed to have effectiveness for the economy of the country. In this study, by reviewing the history of the implementation of this law, related laws and regulations, and initial interview with experts, six main institutional categories were identified. Using the method of focus group and analyzing the content of the discussions and interviews conducted in six sessions, the institutional framework for increasing effectiveness of this kind of laws was proposed. According to the analysis, the most important institutional deficiencies in reducing the effectiveness of the law, were some issues like: the importance of a full project to Iranian companies and forcing them to improve its technological capability, the lack of a system of financing, the lack of sectoral innovation policy and regulation and lack of aggregation of public demand for increasing bargaining power.