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A joint report by the Tehran Chamber of Commerce and IranTalent reveals that widespread internet disruptions were the second most significant factor impacting businesses during the recent 12-day war. This infrastructural crisis severely affected IT companies, which are central to the digital economy, with 63% of them experiencing liquidity declines of over 50%. Furthermore, internet outages emerged as a major obstacle for remote work, disrupting operations for more than 70% of businesses attempting to adapt to crisis conditions.
The report, titled "The Impact of the 12-Day war on Businesses," highlights that 55% of enterprises experienced a production and service output decline exceeding 50% during this period. Small and medium-sized enterprises (SMEs) were identified as the most vulnerable segment, facing greater challenges in returning to normalcy compared to larger firms. With a confidence level of 95%, the findings provide a detailed account of the damages incurred, supply chain weaknesses, liquidity constraints, and private sector expectations from the government for navigating this crisis.
From Internet Disruptions to Banking Challenges
While "reduced customer demand" was cited as the primary cause of revenue loss in the early days of the conflict (66%), subsequent infrastructural disruptions rendered business continuity nearly impossible. Chief among these issues was "internet infrastructure disruption," which accounted for 57% of revenue losses and crippled remote work capabilities for over 70% of companies.
In addition to this digital crisis, "banking operation challenges" emerged as another significant barrier, affecting 38% of managers surveyed. Other critical obstacles included "supply chain disruptions" and "workforce challenges," which collectively strained businesses' ability to survive.
Internet Infrastructure: A Major Barrier to Remote Work During Wartime
Remote work became an essential strategy for maintaining operations during the conflict; however, not all companies were prepared. Approximately 47% managed to enable remote work for at least half their staff, while 31%, particularly those in manufacturing and operational sectors, lacked such capabilities altogether.
The largest hurdle to remote work was "disruption in national internet infrastructure," affecting over 70% of businesses. Additional challenges included inadequate internal company infrastructure and inefficient management processes for overseeing remote employees.
Heavy Financial Losses Across Private Sector
During the 12-day conflict, 90% of businesses reported production declines, with 55% experiencing reductions exceeding half their capacity. This halt in operations also inflicted substantial financial losses. Among small businesses, 41% reported damages exceeding one billion tomans (~$25,000), while medium-sized firms faced losses above ten billion tomans (~$250,000) in 31% of cases. For large corporations, losses surpassed one hundred billion tomans (~$2.5 million) for nearly 29%.
Small businesses bore a disproportionate financial burden; about 63% saw liquidity drop by more than half compared to only 47% of larger companies - underscoring SMEs’ heightened vulnerability to sudden crises.
Industry-Specific Impacts
The economic toll varied across sectors. The IT industry - an anchor of the digital economy - proved especially vulnerable, with 63% of firms reporting liquidity declines exceeding 50%, closely mirroring manufacturing’s impact at 69%. Traditional industries like transportation faced lesser effects; notably, about 25% of firms in this sector reported no changes in revenue at all.
Supply Chain Disruptions and Infrastructural Strain
One of the most severe impacts was paralysis within domestic and international supply chains. During this period, 73% of businesses encountered difficulties sourcing raw materials. Notably, this issue wasn’t confined to importers; over half (52%) relying on domestic supplies also faced challenges - highlighting how deeply war-related shocks affected internal networks.
In foreign trade, delays were widespread: 52% reported canceled orders from international partners while another 71% noted altered volumes in transit goods. Critical national infrastructure also faltered: power and gas services disruptions affected operations for over two-thirds (67%), while delays or non-delivery impacted goods for nearly three-fourths (73%).
Barriers to Recovery
According to the report, "liquidity shortages" were identified as the primary obstacle hindering post-conflict recovery efforts (60%). Other key barriers included "currency access and exchange rate volatility" (41%) and "uncertainty surrounding potential recurrence of conflict" (36%). These pressures forced drastic measures: approximately one-third (33%) resorted to workforce reductions while another third (36%) scaled down operations.
Private Sector Expectations from Government
The report concludes by outlining private sector demands from policymakers in addressing post-conflict recovery needs. The top priority - expressed by 51% - was ensuring regional stability through de-escalation efforts and fostering a secure environment conducive to sustained economic activity.
Businesses overwhelmingly viewed tax exemptions or reductions as the most effective governmental support measure (90%). Additionally, low-interest loans and improved access to foreign currency were endorsed by over 80%, reflecting urgent financial assistance needs across industries.
