Cyprus has spent three decades building the foundations of a research and innovation economy. The next phase, according to Research and Innovation Foundation (RIF) director general Theodoros Loukaidis, is about scale: attracting more private capital, deepening the talent pool and translating research into durable commercial value.
Speaking to Cyprus News Agency as RIF marked 30 years since its establishment, Loukaidis said the country’s innovation landscape has changed materially. More companies are investing in research, more international partnerships are taking shape and innovation is increasingly part of the economic mainstream.
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From Building An Ecosystem To Maturing It
“It is no longer something that may perhaps be happening. It is something that is happening in Cyprus,” Loukaidis said, describing a broader shift in how research and innovation are viewed across the economy.
The challenge now, he argued, is not simply to create an ecosystem, but to help it mature. That means bringing in more private capital, making better use of existing talent, widening Cyprus’ international reach and ensuring the country does not remain only a consumer of technologies developed elsewhere.
Cyprus now ranks 25th globally in the Global Innovation Index among 139 economies, while its startup ecosystem is ranked 34th worldwide by StartupBlink. For Loukaidis, those positions reflect real progress, but also define the next benchmark.
“Today, 30 years later, we have an ecosystem which, with the long-standing support of RIF, has managed to improve its performance, rank highly internationally both in Europe and globally, and strengthen its international competitiveness,” he said.
The emphasis now, he added, is on turning that progress into scale. “We are looking at the next 30 years so that what we have built can evolve, create scale and grow, and through that growth bring even more successes to Cyprus.”
Public Funding As A Catalyst For Private Investment
One sign of the sector’s momentum is the surge in demand for RIF funding. A recent call drew 284 applications, compared with around 60 under the same programme five or six years ago.
That growth, however, raises a strategic question: how public money can be used to unlock more private investment rather than replace it. Loukaidis believes public support for research and innovation must rise, but its real value lies in mobilising capital from elsewhere.
The ecosystem itself is broadening. Universities, centres of excellence and businesses remain central, but investment funds are showing greater interest in Cypriot companies, while organisations such as Plug and Play have also entered the market.
RIF’s own programmes illustrate the leverage effect. Under DISRUPT, every €1 of public funding has mobilised €1.20 in private investment. Under BOOST, private capital has been twice the level of public support.
“This is the way we can use the programmes as force multipliers, to attract even more investment,” Loukaidis said, linking the flow of capital to productive activity and sustainable employment.
Talent Is The Other Constraint
Capital alone will not determine Cyprus’ next chapter. Loukaidis said talent is equally critical, both in attracting professionals from abroad and in making better use of skills already present in the country.
He pointed to Cypriots who studied in specialised fields but ended up working elsewhere because the local market could not yet offer the right opportunities. That is beginning to change in sectors such as biotechnology.
Where once there were only limited prospects, a small but increasingly visible technology ecosystem is now taking shape. Some companies have raised several million euros in private investment, built infrastructure and hired staff, while others are already exporting high-technology products and opening offices abroad.
How Startups Move From Founder Capital To Venture Funding
The financing journey for startups is also becoming more sophisticated. At the earliest stage, founders still often rely on their own savings, family and friends or investors willing to take an outsized risk.
As businesses develop, RIF programmes can step in without taking equity and without requiring repayment in the form of a loan. Business angels are also becoming more visible, bringing not only capital but expertise, networks and strategic guidance.
Further along the curve, venture capital and investment funds enter the picture. Loukaidis said several RIF-backed companies have already attracted investment from funds operating in Cyprus.
RIF is also working to improve the visibility of the Cypriot ecosystem abroad and connect local businesses with international investors. He cited Medochemie’s strategic investment in Theramir, a startup previously supported by RIF, as an example of the broader value such partnerships can create.
“Strategic investors can also bring product expertise, commercial knowledge and access to international markets,” he said.
Why Multinationals Matter To A Small Economy
The same logic applies to multinational and international ICT companies already operating in Cyprus. According to Loukaidis, their presence brings access to foreign markets, deeper commercial know-how, product development experience and the capacity to mobilise larger research and development budgets.
Just as importantly, they create links with universities, research institutes, centres of excellence and domestic companies. Those relationships allow Cypriot firms to gain technical know-how, improve standards and methodologies and, in some cases, introduce new forms of organisational innovation.
The long-term objective is straightforward: to make local businesses competitive enough to sell their expertise not only at home, but internationally.
Artificial Intelligence And Cyprus’ Competitive Niche
Loukaidis sees the same principle applying to artificial intelligence. AI is a highly disruptive technology with vast potential, but for a small economy it also presents a scale challenge. Cyprus cannot compete across every frontier.
Instead, he argued, the country should focus on areas where it already has advantage — notably shipping, financial services and professional services, sectors where Cyprus has international expertise and access to valuable data that can be transformed into new knowledge and intellectual property.
“The big challenge is not to end up simply adopting and using technologies which are produced elsewhere,” Loukaidis said.
That makes infrastructure essential. He pointed to Pharos-CY, part of the AI Factory Pharos initiative, and to Cyprus’ investment in a supercomputer in cooperation with Nvidia.
Researchers and innovative companies need access to that kind of infrastructure if they are to use their own data effectively and develop models tailored to local needs while retaining international relevance, he said.
Skills, Education And Productivity
Beneath the infrastructure debate lies another issue: skills. Loukaidis said Cyprus must encourage interest in science and technology from an early age, while also nurturing creativity, critical thinking, entrepreneurship and research capabilities.
Students and graduates also need a clearer understanding of the opportunities already available in Cyprus. In that context, he pointed to the Research & Innovation Summer Internships and the Accelerate Cyprus Talent (ACT) programme, which place students with companies in the hope of converting that exposure into long-term employment.
Technology is also broadening the skills profile companies need. Loukaidis cited Cyprus’ video games sector as one example, noting a recent report placing its value at around €3.2 billion. That industry, he said, requires not only technical specialists, but also professionals with backgrounds in the arts, marketing and other disciplines.
Shortages remain particularly acute in digital technologies and the green transition, making it essential both to redirect existing talent toward areas of demand and to continue upgrading skills across the economy. Artificial intelligence, he added, can significantly improve productivity if businesses and workers learn how to use it effectively.
Bringing Cypriot Talent Home
Attracting skilled Cypriots back from abroad, however, will take more than tax incentives. Loukaidis said initiatives such as Minds in Cyprus are useful, but financial benefits alone cannot build a strong innovation economy.
People need reasons to build their careers in Cyprus. That means an environment where companies can form and scale more easily, where private finance is available, where teams can grow and where professionals have access to networks, international partnerships and meaningful advancement.
“Talent goes where there is opportunity for development, advancement and the conditions for success,” he said.
Cyprus’ quality of life is an additional asset, in his view, but the broader ambition is to turn the country into a connected regional hub.
From Research Outputs To Commercial Winners
Loukaidis pointed to several companies that illustrate how research can become business growth.
NIPD Genetics began as a spin-off from the Cyprus Institute of Neurology and Genetics, later receiving RIF support and private investment from Cyprus and abroad. It developed diagnostic and prenatal tests for international markets, reached a valuation of €65m and was acquired by a Swedish multinational. Importantly, it remained in Cyprus, where it continues to employ around 150 people and invest in research and development.
Blue Analytics offers another model. The company combines artificial intelligence with aquaculture, received RIF support and later raised about €6m from a specialist blue-economy fund. It already has a product on the market and continues to develop from Cyprus.
Silicon Dali, founded four years ago with €200,000 in RIF support, has since surpassed €1m in sales, built a team of 18, opened an office in Spain and secured customers as far away as South Africa.
Loukaidis also cited Cleedee, an AI company focused on recruitment challenges in hospitality and hotels. It has received €500,000 from RIF and about €300,000 in private investment, and is now expanding into Greece and Austria. In fintech, he highlighted Klidi, which recently raised €2.1m in private investment.
Research Excellence Is Also Attracting European Capital
The progress is not limited to companies. Loukaidis also highlighted two female researchers working on cancer-related projects who were selected from 421 applicants under the highly competitive European Research Council programme.
Each first received €100,000 in national support before securing €1.5m in European funding, bringing a combined €3m into Cyprus. One researcher approaches the issue through life sciences, the other through engineering, reinforcing a broader point: modern medical challenges increasingly require expertise that extends well beyond medicine itself.
What Comes Next For RIF
RIF is already preparing for its next programming period, with a broader set of tools designed to support different stages of the research and innovation cycle.
Among them is PhD MINT, aimed at attracting and supporting new doctoral researchers, alongside Accelerate Cyprus Talent, which connects students with businesses. The foundation also plans to strengthen research excellence through VISION ERC, while continuing BOOST and DISRUPT.
It is also preparing Games Go Global, a programme intended to help Cyprus’ video games industry expand into international markets.
A Public Showcase For A Sector Coming Of Age
This year’s 30th anniversary coincides with the 20th European Researchers’ Night at the Cyprus International Fair, giving the foundation a public platform to showcase how far the ecosystem has come.
Loukaidis said the event would begin on Friday morning with school visits and feature more than 75 stands, allowing researchers, scientists and innovators to present their work in a format that is accessible and interactive.
For him, the event captures a larger shift in national attitudes. Research and innovation are no longer aspirational concepts discussed in the abstract. They are now part of Cyprus’ economic reality.
The next task, he said, is to make them a genuine career path for the country’s younger generation.
RIF continues to work with schools throughout the year through researcher visits, student competitions and other initiatives. Friday’s event is free to attend, giving families and the wider public a close look at a sector that is increasingly central to Cyprus’ future.
