Spatial preferences of small and medium knowledge based enterprises in Tehran new business area

Abstract

In recent decades, there has been a growing emphasis on the importance of small and medium-sized enterprises (SMEs) as a significant driver of economic growth and enhancer of competitiveness. They constitute an estimated 90% of the total population of businesses, and contribute significantly, up to 40% of Gross Domestic Product (GDP), in emerging markets. Furthermore, these enterprises yield a fundamental function in cultivating job prospects, offering employment to approximately half of the worldwide labor force. However, SMEs often face unique challenges related to their size and resources, including accessing finance, developing new products and services, and identifying optimal locations for their businesses. This study seeks to address the latter issue by analyzing the spatial preferences of small and medium knowledge-based enterprises in Tehran's new business area, utilizing the spatial analyst tools by GIS. The research methodology employed in this study is non-experimental in character. It involves the distribution of a social survey to proprietors of SMEs in order to ascertain the key criteria they prioritize when selecting a location for their business. For the purpose of achieving the objective, a conceptual-operational model was developed, comprising four index categories. These categories are delineated as the personal motivations of the entrepreneur, the characteristics of the internal business environment, the spatial environment surrounding the business, and the institutional factors shaping the space. These components constitute critical determinants of the proposed model. The chosen variables were subjected to spatial analysis, and a business environment assistance map was developed in four zones. Following thorough analysis, the northwestern part of the area under consideration has been identified as the optimal zone, and subsequent recommendations for appropriate strategies have been proposed. The study culminated by offering suggestions for improvement, consisting of the implementation of a contextually-oriented model pertaining to new Iranian business improvement districts (BIDs) as a means of augmenting the status of SMEs.