This paper is investigating the relationship between human development index and innovation in Iran and competitors of Vision Document

One goal of the Iranian Vision Document is to advocate for improvement in the quality of life of Iranians. This improvement majorly includes enhancing public health, public education, purchasing power etc. Another goal of this document is to move towards a more innovative economy through exporting knowledge-based products and declining the dependency to the export of crude oil. Toachieve these goals, innovation should receive adequate support. This paper analyses the current relationship between innovation and welfare in Iran and its nominated competitor countries, mostly located in the Southwest Asia, in the Vision Document. HDI was applied as a proxy for welfare. The share of R&D of GDP, the share of FDI of GDP and portion of high-technology exports in GDP were the selected variables to indicate innovation. The results of this study showed the effectiveness of FDI in improving the welfare and quality of life.