Demetris Skourides: Cyprus' innovation ecosystem has emerged as one of Europe’s most rapidly developed

Demetris Skourides, Chief Scientist of the Republic and Chairman of the Research & Innovation Foundation (RIF), examines the island’s innovation ecosystem, identifies what’s missing and explains what is being done to help startups make the crucial step from research to commercially viable products and services.

In a recent interview with GOLD magazine, he, among other things, also shares his expert opinion on international partnerships, the adoption of AI tools and robotics and RIF's future funding plans.

How strong is the innovation ecosystem in Cyprus?

Our innovation ecosystem has made significant strides in recent years, establishing itself as a dynamic and rapidly growing hub for research, technology and entrepreneurship. Cyprus has successfully combined its strategic location, skilled workforce and strong institutional framework to attract investment and foster innovation.

Our ecosystem consists of 500+ startup and scale-up companies, more than 15 incubators and accelerators, 12 universities, 7 centres of excellence and over 12 research institutes employing 3,500 highly paid young Cypriots.

Our ecosystem has emerged as one of Europe’s most rapidly developed, especially considering the country’s size and capabilities. For the third consecutive year, Cyprus remains a strong innovator on the European Innovation Scoreboard 2024, with the European Commission noting it has evolved from ‘embryonic’ to ‘quite dense’ for its size.

Additionally, Cyprus has risen on the 2024 Global Innovation Index to 27th place among 133 countries. It has secured 32 European Research Council (ERC) grants, including seven in the last three years. The country has also made impressive strides on the Startup Blink Global Startup Ecosystem Index 2024, climbing nine places to 45th, its first appearance in the global Top 50.

What support does it receive?

The country’s R&I ecosystem is supported by top-tier institutions like the University of Cyprus, the Cyprus University of Technology and the Cyprus Institute. Funding for innovation comes from national agencies such as the Research & Innovation Foundation (RIF) and EU programmes like Horizon Europe.

R&I focuses on vital sectors like ICT, clean energy, biotechnology, maritime technologies and agrotech, driving economic development. Numerous accelerators, incubators and funding programmes foster entrepreneurship and international collaboration, especially with the EU and countries in the Eastern Mediterranean.

Despite challenges – brain drain, limited private sector R&D investment, etc. – Cyprus offers significant opportunities in digital transformation, green initiatives and attracting foreign investment. It is positioning itself as a leader in regional research and technological advancement.

Intense competition often stops the commercialisation of research, not only in Cyprus. What are the best ways of getting ideas off the ground, out of the lab and into the market?

One of the main challenges in Cyprus and across the EU is that of bridging the gap between research and commercialisation. Innovation often stalls at the point where ideas need to move from the lab to the market. To address this, we need to focus on several key strategies.

First, strengthening public-private partnerships is essential. One of my first priorities was to host a stakeholder roundtable in October 2023 to discuss making the Cypriot economy more competitive. Armed with insight for the research and innovation strategy 2024, we delivered Partner Industry Innovation Day, where we gathered 43 enterprises, 22 consultants, 39 startups, 67 researchers, and 420 participants, fostering community and private sector collaboration. Our goal was to promote research commercialisation and facilitate the transfer of knowledge and technology between research institutions and industries.

Commercialisation requires a very different mindset; it is not about investing more in basic research but rather thinking of the route-to-market strategy and how licensing can create value for new revenue streams, while protecting IP. In 2023 and 2024, the focus at RIF was all about helping companies prepare their IP strategy, and we now have great references of startups promoting their patents in international markets.

Commercialisation will arrive when researchers start prioritising the large-scale impact of their inventions. It can happen faster when established companies leverage the services of researchers under sponsored research and it is time that innovation companies started investing appropriate funding in the Chief Growth Officer and Chief Product Owner roles.

International collaboration is also vital, as the market for many innovations is global. I have already accommodated 850 meetings in the first 15 months of my tenure, advocating for the Cypriot R&D 2024-2026 strategy worldwide and paving the way for MOUs and strategic partnerships with Israel, Japan and other countries.

We are actively pursuing cooperation with several countries and have made significant progress in establishing a pathway for Cyprus-based organisations and startups to enter new markets, including the GCC and ASEAN regions. By 2026, Cyprus-based companies will have the opportunity to access markets with a combined population of over 1 billion.

The GCC market is particularly promising, with the ICT sector alone projected to be worth US$129.07 billion in 2024, growing to US$203.09 billion by 2029. Meanwhile, the ASEAN economy, with a nominal GDP of US$3.6 trillion in 2022, is expected to continue its strong growth, forecast to expand by 4.6% in 2024 and reach US$10 trillion by 2030.

What truly matters is our ability to differentiate ourselves as a Cypriot Research and Innovation ecosystem.

What’s missing in the innovation ecosystem in Cyprus and preventing more local success stories from emerging?

First, access to risk capital is a critical gap. While there are some funding options available through RIF programmes, we still face challenges in attracting sufficient private investment, particularly for early-stage startups.

Encouraging more venture capital, angel investors and corporate partnerships will be key to scaling up promising ideas and supporting their journey from the lab to the market. In this context, I recently visited the United States, where I addressed the diaspora and highlighted the strategic importance of innovative collaborations, such as the Cyprus Seeds initiative, and also had meetings with people at MIT and Harvard, in addition to the discussion with the National Science Foundation (NSF).

Second, commercialisation support is an area where more focus is required and, third, talent retention and attraction is another critical area. To address this, we need to invest more in fostering an entrepreneurial culture within our universities and research institutions and create incentives for top talent to stay and contribute to the local ecosystem.

Fourth, entrepreneurs and innovation companies must understand that success can only be achieved if they build multiple revenue streams in their business model and shift their thinking to scaling up solutions and services for global audiences.

The market size of Cyprus suffices as a test bed but is unlikely to sustain a startup aspiring to grow into a unicorn. I am creating bridges with innovation ecosystems across the globe that will open doors for Cypriot based innovative solutions and researchers.

Fifth, we need to anchor strong global cooperations, be they with angel investors, chip designers, innovative Defencetech, Retech and Energytech startups and top-tier universities with established technology transfer offices that focus on commercialisation, which requires building specialised capacity in strategic domains. From a government perspective, we also need to create a more favourable environment for innovations created by our startups and SMEs to be adopted by both the public and private sectors. Finally, global connectivity and market access need further development.

The bulk of the €180 million of RIF funds dispersed since 2016 target research. Will you continue with the same strategy going forward or are there any plans to increase funds for innovation?

I recognise the critical importance of supporting both research and innovation for the future growth of Cyprus’ innovation ecosystem. The €180 million allocated by RIF up to May 2024 has played a vital role in advancing scientific research across various sectors. Moving forward, while research will continue to be a priority, we also recognise the need to focus more on fostering innovation and commercialisation.

Additionally, we plan to explore ways to enhance funding mechanisms, such as creating more targeted programmes that bridge the gap between research and business development. I have also made a commitment to the rectors’ council and researchers to increase amount allocated through competitive funding.

To become a research hub, we must attract top tier researchers and doing so will also increase the competitiveness of our researcher community.

You mentioned your recent visit to the US and you have also been in Singapore and Indonesia as Cyprus looks to expand its partnerships with foreign institutions. How do these partnerships help in practical terms?

Partnerships with advanced countries such as the USA, Israel and Japan will enhance our ability to move from lab to market. The world is changing fast, and we need to ensure that our research and commercialisation culture is fit for purpose. We cannot remain stagnant.

My trip to the US had three objectives, the first being to focus on strengthening bilateral cooperation in science, research and innovation, and my meetings at MIT and Harvard explored potential cooperation with Cyprus-based research organisations.

A second objective was to discuss with the National Science Foundation (NS) the possibility of collaboration with the NSF’s “I-Corps” programme and the third was to showcase the results of the Cypriot Research and Innovation ecosystem.

I was particularly satisfied with our interaction with the Hellenic diaspora, angel investors and venture capitalists and how they perceived the two Cypriot startups EnergyIntl and Embio diagnostics. During my visit to Asia, among other things.

I discussed the possibility of collaboration between Cyprus, ASEAN and India, through Cyprus joining the ASEAN ScaleHub Programme 2025 to provide local scale-ups with access to SEA markets and create opportunities for engagements between Cyprus and scale-ups in ASEAN/India looking to expand into the EU/MEA through Cyprus.

In Indonesia, we explored areas of complementary value creation in the healthcare, energy, agriculture and maritime sectors.

What sectors in Cyprus stand to gain the most from adopting AI tools and robotics?

In healthcare, AI can enhance medical imaging, predictive diagnostics and personalised treatment plans, improving patient outcomes and efficiency. In agrotech, robotics and AI can revolutionise farming with precision agriculture, optimising irrigation, pest control and crop management to increase yields while reducing environmental impact.

The ICT sector stands to benefit from AI-powered data analytics, cybersecurity and smart infrastructure, positioning Cyprus as a competitive player in the global digital economy. Integrating these technologies will be a catalyst for economic growth, innovation and sustainability.

At last month’s SAFEVAT Forum, I presented more than 15 examples of companies utilising AI and machine learning with products and services “Made in Cyprus”, specifically in financial services (by Dynamic Works, Quadcode and payable.) and in healthcare (CING, CatBrain, Biobank.cy, Medicover Genetics and Agora 3.0. We also have solutions and applications in critical infrastructure from the Cyprus Marine and Maritime Institute, KIOS Research and Innovation Centre of Excellence, Eratosthenes Centre of Excellence, CYENS Centre of Excellence and, of course, in cybersecurity from Odyssey and Malloc.

We also have products in other sectors, like robotic solutions from ASBIS, AI holograms from RAVATAR, and programming language IDEs platforms like JetBrains confirming that an unprecedented amount of R&D is taking place in Cyprus.

I would also like to emphasise that Data and Artificial intelligence are two radical transformers for every business and every entrepreneur and businessperson should consider Data as the new Oil and AI as the new Energy. These two technologies can create a paradigm shift for any company and, with cloud prices dropping, I expect that a large number of startups and entrepreneurs will be looking for a new base for their company and Cyprus should be at the top of their list.

Today, over 50 public and private organisations are adopting AI in Cyprus, which has 100% 5G coverage. Cyprus is progressing rapidly on its digital transformation journey and we also expect robotic process automation to be used extensively across both the public and private sectors to create productivity benefits, alleviating the extensive administration burden for operators and reducing wait times for citizens. Our country is on the AI highway and, with respect to AI adoption in Cyprus, 2025 is going to be a year of major change.

This interview first appeared in the January edition of GOLD magazine. Click here to view it.