Industrialization–The Reza Shah Period and its Aftermath, 1925-53

Prior to the 1920s, traditional crafts (q.v.) dominated the industrial scene in Iran; and, despite a growing interest in industrial modernization after the 1870s, the role of industry remained very limited in the economy at the turn of the 20th century (Issawi, 1980, pp. 471-72; Bharier, 1971, p. 170). Factories and industrial establishments utilizing modern machinery were a rarity, with employment in modern industry at this time accounting for no more than an estimated figure of 850 jobs (Floor, 1984, p. 5). The slow development of large-scale industry in Iran is ascribed in part to lack of integration in the economy and very low levels of customs duties (about 4-5 percent) on manufactured imports (Bharier, 1971, p. 171; see also COMMERCE vii.; ECONOMY ix.). On the other hand, archaic and underdeveloped infrastructure as well as a low level of human resources (lack of skilled and technical manpower) were also limiting factors. The situation was, however, to undergo important changes after the 1920s, paving the way for the emergence of Iran’s nascent industrial sector from the 1930s onwards.