Various provinces in the vast country of Iran possess numerous exploitable capacities. Utilizing these for development requires a shift from centralized and top-down policymaking procedures to the adoption of participatory approaches, so that policies are aligned with the capabilities and needs of each region. This study, with a focus on knowledge-based companies, pursues the goal of adapting the activities of these companies to regional conditions. In this regard, it employs the concept of smart specialization. Smart specialization is one of the theoretical frameworks for bottom-up policymaking, which formulates region-specific policies based on contextual features and regional innovation capacities. In this research, by studying the planning documents of selected provinces, their areas of focus and priorities are identified. Subsequently, by examining the activity domains of knowledge-based companies and conducting interviews with policymakers and knowledge-based sector activists, the study investigates the entry of knowledge-based companies into priority areas. The next step involves examining the challenges faced by knowledge-based companies in their activities. Finally, solutions are proposed to improve the performance of the system and to guide the activities of knowledge-based companies toward alignment with regional capabilities. The results of the study indicate that some of the challenges are related to evaluation processes, commercialization, networking, and communications, while others concern shortcomings in the support provided by ecosystem actors, namely universities, innovation institutions, regional organizations, and the industrial sector.