As technology gap is important in competitiveness , in this study effective factors on technology gap in Iranian manufactures is analyzed from industrial economy’s point of view through panel data with the emphasize on competition degree. The results show that high degree of concentration and profitability encourage the firms to transfer the technology.Also monopoly firms decrease the technology gap through investing on R&D and innovation. Besides, firm entry and business cycles cause technology gap decrease in monopoly manufactures, while import causes the technology gap to increase. In competitive manufactures, firm entry increases the technology gap and the import decreases it.Firm profitability, firm entry ban decrease especially in monopoly manufactures and tariff policy reformation due to their competition degree have a positive role in decreasing technology gap and improving competitiveness.