Rising investment and  visibility signal progress, but scaling remains the next test

Public funding, new research centres and a growing venture capital scene have changed the landscape of the Cyprus startup and innovation scene.

Startups are gaining visibility abroad. International investors are paying closer attention. Universities and companies are collaborating more closely. The Research and Innovation Foundation (RIF) sits at the centre of this system.

Under the leadership of Director General Theodoros Loukaidis, the foundation has expanded its funding programmes and pushed for stronger links between research, business and international markets.

The aim is clear. Turn research into commercial value. Attract investment. Position Cyprus as a regional hub for technology and innovation.

Cyprus now ranks among the top performers globally for its size. The next question is whether the country can sustain this momentum and turn progress into long term economic impact.

In this interview, Loukaidis discusses the drivers behind Cyprus’ rise in global innovation rankings, the remaining structural obstacles for researchers and startups, and the role RIF plans to play in shaping the next phase of the country’s innovation economy.

Cyprus has been ranked in the “innovation leader” category of the Global Innovation Index. What concrete factors do you see behind this leap, and how sustainable is this progress long term?

Cyprus’ rise into the “innovation leader” category of the Global Innovation Index reflects a long‑term, deliberate effort to build a unified, stronger and well‑interconnected research and innovation ecosystem; one that delivers tangible results and contributes directly to economic and social development.

Over the past decade, our ecosystem has grown not only in size, with more universities, centres of excellence, startups and innovative companies, but also in sophistication. Today, Cyprus hosts a wider and more dynamic mix of actors essential for a vibrant innovation economy: business angels, venture capital funds, incubators, accelerators, professional service providers.

Together, they are generating stronger innovation outputs, attracting private investment and enhancing Cyprus’ visibility abroad. These are in turn reinforcing the country’s role as a regional hub for research, innovation and technology.

A key driver behind this progress has been the country’s pro‑innovation and pro‑business policy agenda. Government institutional funding, tax incentives, talent mobility schemes, as well as the Research and Innovation Foundation’s (RIF) portfolio of funding programmes have created enabling conditions for sustained growth.

In the past five years alone, the RIF has launched more than 140 funding calls and mobilised €207 million, supporting nearly 800 research and innovation projects across universities, research centres and enterprises. These investments have created more than 1,300 high‑skilled jobs and leveraged over €47m in private capital; demonstrating the private sector’s growing confidence in Cyprus’ innovation potential.

But the RIF is more than just funding. We act as connectors, facilitators and ecosystem builders. We offer a comprehensive suite of knowledge transfer and innovation support services, skills development programmes, and we organise or sponsor major R&I events in Cyprus. We also organise and lead delegations to international innovation events where our ecosystem can showcase their achievements, build partnerships, reach new markets and attract investments. And importantly, we help communicate the value or research and innovation to society, highlighting its role in shaping a more resilient and prosperous economy.

We remain fully committed to strengthening this momentum. Our focus is to establish Cyprus as a truly competitive regional innovation and technology hub; one that consistently creates value, drives growth and positions the country at the forefront of technological and scientific advancement. There will, as always be challenges but as they saying goes “opportunities are challenges mastered”.

The foundation recently led a delegation of Cypriot startups at SLUSH 2025 in Helsinki and MWC/4YFN in Barcelona. How does RIF measure the impact of these international showcases on Cyprus’ startup ecosystem?

We have been leading national delegations to major international innovation events for the past four years. For startups and scaleups, participating in these events offers a first‑class opportunity to showcase their products and services, meet potential partners, find new customers and pitch directly to investors. In many cases, a single meeting at a global‑scale event can open doors that would otherwise take years to unlock.

Throughout the week of these events, we see our companies engaging with investors, partners and other innovators, pitching to investors, demonstrating their products and services and building relationships with key players from around the world.

Very often, what begins as a simple conversation at one of these events turns into something tangible: a new partnership, a new customer, or an investment. We follow up with participating companies regularly to monitor these outcomes, and we hear success stories. Just recently, a company that joined us at Slush last November shared that they are about to close a deal with a customer they met at the event. Another startup is on the verge of finalising an investment that originated from that same delegation. And from previous events, we’ve seen partnerships formed between Cypriot innovators and major global technology companies.

These results demonstrate the real value of our presence at international innovation events. They show why more companies should join our delegations: the opportunities created can be transformative.

In your opinion, what are the remaining structural obstacles for researchers and innovators in Cyprus?

Cyprus has made remarkable progress, ranking 25th globally in the Global Innovation Index and in the top-40 startup ecosystems according to StartupBlink.

Our progress is, above all, testament to the talent on the island. Talent‑mobility schemes, the RIF’s PhD‑in‑Industry and Co-Develop programmes, and closer university–industry collaborations are already expanding the talent pool and strengthening our innovation capacity. But we also recognise that there is much more we can do to attract, develop and nurture a larger and more diverse talent base, especially in STEM.

A second structural challenge relates to investment in R&D. Cyprus’ R&D expenditure as a percentage of GDP remains stubbornly low. Strengthening public investment, and mobilising even more private‑sector investment, will be critical. More needs to be done to broaden company participation in research and innovation activities. We need to enhance the absorptive capacity of local companies, helping them adopt innovative and digital solutions more quickly. As more firms, even in traditional sectors, embrace innovation, demand for new technologies will expand and create far more commercialisation opportunities for researchers and startups.

Access to finance remains another long‑standing obstacle, particularly for innovative companies seeking to scale. While the situation is improving, with more venture capital funds and business angels now investing in Cypriot companies, there is still room to accelerate the inflow of productive investment and to strengthen the scale‑up finance environment. The Cyprus Equity Fund is now up and running, local VCs are active and the establishment of the Government’s National Promotion Agency are expected to close the existing financing gap.

Across the world, talent, ambition and investment are critical success factors. Cyprus today has a far stronger foundation in all three. By leveraging the country’s growing international attractiveness, and by continuing to reinforce the systems that support researchers and innovators, we can turn these remaining structural challenges into opportunities for long-term, sustainable growth.

What does the RIF have in store for 2026 and beyond?

2026 is a turning point for how we shape the next decade of R&I impact. Because this year, the foundations of the future are being laid.

In terms of funding, there are €7.5m in new excellent research projects and €8.2m in innovation projects to be granted in the first half of 2026. We are about to complete the deployment €7m to fund the establishment of production lines for innovative products through our flagship STEP programme. Even more, we have just signed the first two AI in government projects, the programme we launched in collaboration with the deputy ministry for research innovation and digital policy. Two more projects are expected to be signed later in the year. This is a total investment of €5m.

There will be another €11m in funding programmes that will be announced throughout 2026.

At the same time, we will continue our efforts to increase Cyprus’ success in Horizon Europe, ensuring that our researchers and companies participate actively in international consortia and large-scale collaborative projects. Cyprus already performs strongly relative to its size, but we believe the potential is even greater. So far, we have secured €356.3m, our aim is to reach the €500m figure by the end of 2027. A goal well within reach, I think.

Equally important, Plug and Play is coming to Cyprus. At the RIF we have been working on that for a few months. The Council of Ministers approval has been granted and we are pressing ahead!

And while we do that we are, at the same time, designing the 2028–2034 Funding Era; one which will define the trajectory of our national R&I ecosystem for years to come. Our objective is straightforward: secure the RIF multi-annual budget, enhance the effectiveness of our investments and maximise their impact on the economy and society. Several key RIF initiatives in 2026 will set the stage for this future.

  • New funding rules: We launched a public consultation on the new rules governing our funding framework. Our operations are shaped by multiple layers of legislation and regulation, and our goal is to strike the right balance: responsible management of public funds, accountability, simplicity and impact.
  • A new grants management system: This is the digital backbone that will carry us through the next ten years. This is more than an IT project, it’s the infrastructure that will allow everything else to work better. A system that will make it easier to apply, to manage, and to deliver impactful projects, leveraging on advanced technologies and providing enhanced data insights.
  • Partner experience: Year after year, we are investing more on how we support our ecosystem. We are no longer waiting for the doers to come to us, we are going to them. Through on-site visits, direct engagement and new channels of support, the RIF’s presence in the field is designed to make their journey smoother and more impactful.

Our overarching goal is clear: Over the next five years we will be looking to strengthen Cyprus’ position as a regional research, innovation and technology hub, contributing meaningfully to Europe’s competitiveness and strategic autonomy. We are ideally positioned to achieve that!

The RIF emphasises building an entrepreneurial mindset alongside research. What specific initiatives do you believe are needed in Cyprus’ education system to support this?

Building an entrepreneurial mindset must start early. We need to prepare a generation that is not only employable, but entrepreneurial, adaptable and globally competitive. This requires a system‑wide effort that embeds future skills and innovation mindsets at every level of learning.

We must cultivate creativity, problem‑solving, resilience and opportunity‑recognition from the earliest years. That means integrating entrepreneurial thinking, design thinking, collaboration and project‑based learning as core learning experiences.

As technology cycles accelerate at unprecedented speed, we must equip the future workforce with the skills that endure: digital fluency, critical thinking, data literacy, and an ability to learn and adapt. These are the foundations of entrepreneurial confidence.

We need more programmes where students, including at university, solve real problems and foster collaboration between companies, research centres and the public sector. Aligning curricula with the needs of the market, present and future, is important.

And for an island nation, facilitating brain circulation is vital. We should ensure that the next generation and the one after next can move fluidly between Cyprus, Europe and the world, bringing back new perspectives, networks and ambition.

And for all that to happen we need to provide stronger support to the educators. We need to start by equipping them with the skills so they can then be the multipliers that pass it onto the next generation.

We need more innovation support structures: knowledge and technology transfer offices, incubators, pre-accelerators and accelerators. Every university and research centre should have them and they should aim at nurturing a vibrant environment where students can turn ideas into startups.  Even if they fail, they learn more deeply

And finally, it’s not just about teaching, it’s also about inspiring. We must bring the doers into the classroom. Cyprus now has success stories: researchers, founders, investors and innovators whose stories can ignite ambition. Their presence makes entrepreneurship real and tangible.

At the RIF, we are fully committed to supporting this transformation. Through the Future Founder Academy, sponsorship of national competitions, supporting student participation in international events, funding programmes for skills development, supporting incubators and accelerators, operating the Central Knowledge Transfer Office, supporting the establishment of such offices in universities and research organisations, and hosting events that provide opportunities for students to meet the doers, we are building the foundations of an entrepreneurial nation.

The future is ours to build! And it starts with having the talent to build it.

Looking ahead, how do you see the role of RIF in fostering public-private partnerships and attracting private investment into research and innovation in Cyprus?

Public funding alone cannot build a thriving innovation ecosystem. Sustainable innovation requires strong, long‑term collaboration between the public sector, academia and industry.

At the RIF, this is where exactly we see our role as a catalyst that brings these actors together, creating the conditions for knowledge, talent, and investment to flow from research institutions into the market.

Over the past five years, the projects supported by RIF have leveraged more than €34m in private investment, demonstrating that public funding can act as a powerful multiplier when combined with entrepreneurial initiative.

Our programmes are intentionally structured to strengthen public–private collaboration. For example, the Co-Develop programme requires enterprises and research organisations to co‑create solutions; and the PhD in Industry programme embeds doctoral researchers directly within companies to accelerate technology transfer and deepen cooperation.

Going forward, we want to further expand this model by encouraging greater private sector participation in research activities, support the creation of more high-growth technology companies and attract more international investment into our ecosystem. This includes widening access to innovation funding instruments, strengthening knowledge‑transfer mechanisms and creating more opportunities for companies to engage with universities, research centres and global partners.

If we succeed in aligning public investment, scientific excellence and entrepreneurial ambition, Cyprus can develop a sustainable innovation economy capable of competing internationally, attracts talent and capital, and turns research outcomes into real economic and societal impact.