University-Industry relation is one of the key mechanisms to reach innovation and acts as a foundation for strengthening knowledge cities concept both in developed and developing countries. The main objective of this study is to evaluate the National and Regional Innovation System in Iran, and in regional level in the city of Mashhad, based on University-Industry Collaboration (UIC) in order to evaluate their role in the process of establishing Mashhad Knowledge City. The methodology of the current study is qualitative. Data collection was based on survey by using semi-structured interviews and document analysis. For analyzing interviews, theme analysis method was employed. Semi-structured interviews were conducted with eight experts in the case of Ferdowsi University of Mashhad (FUM). Results of this study indicate that, Iran defines appropriate rules and regulations towards promoting UIC, and dedicate various infrastructures. However, Iran need to promote the system of intellectual property rights particularly enforcement laws, paying attention to venture capitalists as well as reducing administrative bureaucracy which were find as a most important hurdles of establishing knowledge city concept based on UIC in Mashhad.

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