Innovation Europe > News > Innovation EU Vol2-1 > Innovation Cyprus

Tourism is the principal economic activity of Cyprus, followed by financial services and real estate; manufacturing contributed 7.9% to GDP and 9.8 % to employment in 2007. Average annual GDP growth was 3.8% over the last decade, outstripping by 1.5% the EU-27 average of 2.3%. GDP per capita rose to 94.6%. The current crisis has affected the country – GDP growth is expected to slow but remain positive.

The government has made significant efforts towards a knowledge society, considering this the best model for sustainable economic development. The target is to increase competitiveness and maintain and/or enhance the role of Cyprus as a hub in the Eastern Mediterranean. EIS 2008 classifies Cyprus as a “Moderate innovator”, combining a close to EU-27 average level of performance with a high growth rate. “Finance and support”, “Linkages & entrepreneurship” and “Innovators” are strong dimensions of the country’s overall performance, while in “Human resources”, “Finance and support” and “Throughputs” categories, Cyprus ranks below the EU average.

In the last five years, significant growth has been observed in “Finance and support” (10.2%) and “Linkages and entrepreneurship” (8.6%). Other categories also perform positive growth. Innovation policy has attracted attention without becoming a well co-ordinated and effective part of Cyprus’s economic development policy. Policy focuses on the utilisation of R&D results, diffusion of new technology and entrepreneurship – almost exclusively through direct support.

Main innovation challenges

• Increase inputs and efficiency of business innovation.
• Increase the number of S&E graduates.
• Main innovation policy challenges.

Conclusions

Innovation policy is yet to become a well co-ordinated and effective part of Cyprus’s overall economic development policy. Government innovation remains too closely linked to research and technology only. Meanwhile the business sectors view innovation as a process of non-technological change. The main need to be addressed is improved co-ordination.

The continuation of increasing international cooperation may create new opportunities in the role Cyprus can play in the Eastern Mediterranean. Joint ventures with leading international organisations can attract more global organisations to the country.