In July, Cyprus was named one of five most improved EU countries, rising by 33 per cent since 2014. The report highlighted “very strong increases” in several indicators, including venture capital, broadband penetration, product innovators and SME collaboration.
by Invest Cyprus
Since joining the European Union in 2004, Cyprus has successfully raised its profile in research, science and innovation. Now this ambitious island has set its sights on becoming a regional hub for innovative entrepreneurship.
By supporting the commercialisation of research from top Cypriot universities and facilitating collaboration between stakeholders, Cypriot organisations are creating an ideal environment for creative business ideas to flourish. As a result, Cyprus is quickly rising up the global innovation ranks.
In July, the European Innovation Scoreboard named Cyprus as one of the five most improved EU countries, rising by 33 per cent since 2014. The report highlighted “very strong increases” in several indicators, including venture capital, broadband penetration, product innovators and SME collaboration.
Cypriot SMEs are also growing more ambitious, with innovative research and a rapidly growing start-up ecosystem supported by a generous package of state and EU funds. Nearly 250 startups have already applied for funding from the EU’s Horizon 2020 programme, sharing over €72.33 million.
Building on strong foundations
Cyprus’ institutions and organisations are creating a healthy environment for innovative ideas to grow and develop. The National Board for Research and Innovation has developed a strategic framework around three principal pillars: Research excellence, knowledge transfer and commercial exploitation, and innovative entrepreneurship. This is complemented by the implementation of a Research and Innovation governance system, adopted in 2018 by the Council of Ministers.
This forward-thinking strategy is key to Cyprus’ growing success, particularly in SME collaboration, aiming to facilitate “coordination, interaction and synergy among stakeholders”.
Dr Nikolas Mastroyiannopoulos, Chief Scientist for Research and Innovation of Cyprus said “Now is the time to leverage our strengths, invest in new ideas and seize the opportunities to step into the future. I remain committed to nurturing a R&I culture across all levels of education, industry, society and the state to create a robust and efficient R&I ecosystem, drawing the best talents of our research community closer to industry and yielding timely results that will boost our economy and pave the way to a resilient future.”
Cyprus Seeds is among organisations working to ensure that the research excellence emerging from Cyprus’ universities is converted into commercial success. The non-profit initiative funds promising projects and offers mentorship, preparing start-ups to attract international investors. In the 2020-21 cycle, Cyprus Seeds offered grants to seven projects, spanning healthcare, energy, water technology, agrobiotech and computer science. Funding from Invest Cyprus last year supported several teams to attend a five-month accelerator program organised by the prestigious MIT Enterprise Forum Greece in Athens.
One project is YieldShield, a seed-priming technology which will enhance the tolerance of important crop plants to stress conditions linked to climate change. Developed by students and professors at the University of Cyprus and the Cyprus University of Technology, YieldShield’s innovative technology will make a valuable contribution to the global goal of food security.
Other Cyprus Seeds funded projects include DIMEC, a new medical device which will increase the success rate of fertility treatments, and AIRMOS, an AI toolkit that monitors drone tactics to protect sensitive facilities.
Another organisation, IDEA, runs workshops, conferences and ‘hackathons’ and delivers a nine and 12-month Business Creation Training Program to help start-ups, female entrepreneurs and disadvantaged sectors of the population develop their skills. Success stories include a green maritime shipping venture which has achieved a noteworthy yearly turnover of over €200.000 and an all-female start-up that has developed a privacy protection mobile app. The latter, Malloc Privacy, has recently been accepted into the prestigious Y-Combinator seed-funding programme, which counts Airbnb, Dropbox and Monzo as alumni.
Angela Panayiotou, who leads IDEA, noted increasing collaboration between start-up incubators, research institutions and local organisations on the island.
“Cyprus is already a noticeable player, as evidenced by its performance growth in the 2021 European Innovation Scoreboard,” she said, “By creating an encouraging environment, young entrepreneurs are supported to transform their ideas into a viable business with market-ready products. IDEA has already helped create 74 new business and more than 90 new job positions which provides tangible proof that these initiatives are not only crucial, but effective in fostering innovation and entrepreneurship.”
Cyprus rises to the challenge
Creating a dynamic innovation ecosystem is crucial for Cyprus’ ability to compete globally. An investor survey conducted by EY emphasised that the Cypriot economy must reduce its reliance on tourism, real estate and professional services and diversify into sectors where there are strong opportunities for growth. Nearly half of all respondents identified the need to prioritise high-tech and innovation to improve the FDI attractiveness of Cyprus. According to the National Board for Research and Innovation, 65% of economic growth in Europe derives from innovation, and private investment in research and innovation typically sees returns between 10 per cent and 30 per cent.
Cyprus has already risen to the challenge. Particular areas of innovation include fintech, health and life sciences and ICT. From PumaPay, a payment technology that allows merchants to accept crypto payments, to Graced, a Horizon 2020 funded sensor that will simplify the fruit and vegetables inspection process, Cypriot SMEs are attracting global attention for their creative solutions to emerging problems.
Cyprus is also building regional links. Last month, the Chief Scientist for Research and Innovation, Nikolas Mastroyiannopoulos, met with Greek ministers to set common goals for enhanced cooperation, and Cypriot researchers continue to maintain strong collaboration with a number of European research institutions. The Cyprus Research and Innovation ecosystem is closely intertwined with the UK and three Cypriot centres of excellence (KIOS, RISE, CMMI/Maritec-X) have UK research institutions as strategic partners.
Cyprus offers many benefits that SMEs and their investors can reap, such as its geographical proximity to the EU and MENA markets, generous tax incentives and low cost of doing business. George Campanellas, Chief Executive of Invest Cyprus: “Particularly over the past year, the value of technology and the need for greater innovation has been recognized globally. It’s reassuring to see Cyprus at the forefront of some of this exciting new technology and the capacity of our entrepreneurs to compete on the global stage.”