Contrasting Perspectives: Exploring Cyprus’ Startup Ecosystem Rankings

by Marios Roussos
Cyprus is ranked on 56th position of 62 other countries,

Navigating between contradictions in reports and European statistics

Key Facts

  • CEOWORLD Magazine ranks the most startup-friendly countries in the world in the world.
  • The top 10 are the United States, the United Kingdom, Canada, Israel, India, Germany, Poland, Malaysia, Sweden, and Denmark.
  • Cyprus according to CEOWORLD is ranked 56, with quite bad stats compared to other countries of similar size.
  • Research innovation and Technology begs to differ as Cyprus ranks 10th in the European innovation scoreboard for 2nd year in a row and 27th in the global innovation scoreboard.
  • Demetris Skourides underlines the efforts of the Government to support the startup ecosystem in Cyprus, as he names the country as one of the most attractive among startup powerhouses.

Cyprus the past decade has opened its arms to the startup world, which has resulted in an ever-growing technology community. Despite the problems that might occur from time to time it is questionable how friendly the country is, a factor that affects Cyprus’s attractiveness.

On one side, we have a report from CEOWORLD Magazine that shows Cyprus with a bad ranking concerning startup friendliness, and on the other, we have country officials stating that the whole picture is wholly different and pointing to other reports. In this article, we try to mention both sides and shine some light on this.

The method

Before we dive into the table as such, let’s see how this ranking is formatted. According to the general methodology of the CEOWORLD, the rankings are based on five major metrics of a country’s competitiveness and capabilities. The overall Score (100%) is the sum of the following:

  1. Human Capital Investment: This looks at how much money is (invested) in developing and nurturing tomorrow’s workforce.
  2. Research and Development: This examines a country’s research and development (R&D) capacity to see if it has the facilities that attract funding and create innovations that could be commercialized and contribute to economic growth.
  3. Entrepreneurial Infrastructure: This determines the success rate of converting research into commercially viable products and services.
  4. Technical Workforce: This composite measures the relative presence of high-end technical and scientific talent.
  5. Policy Dynamics: This evaluates technology outcomes to assess how effective policymakers and other stakeholders have been at parlaying regional assets into regional prosperity.

Over 194,976 respondents were sent a long list of more than 256 indicators drawn from leagues on every continent and asked one simple question: which countries will be the most friendly in the world in 2024? Each respondent picked five countries and ranked their selection. All the votes were added together to give a raw score. An economy needed to receive votes from at least 500 respondents to qualify for the list.

Best of the best

Based on the results of the survey, the United States has earned recognition as the world’s most startup-friendly nation, followed by Canada at 3rd place, and the United Kingdom ranking 2nd in global startup-friendliness. India secures the 5th position, while Israel claims the 4th spot.

Interestingly, the top European member states on the list, are Germany and Poland, on 6 and 7 position, Sweden and Denmark, on 9 and 10 position respectively. Between them, in 8th position is Malaysia.

The United States continues to uphold its leading status as the premier destination for startups, attributable to a multitude of factors, prominently among them its robust research and development (R&D) capabilities. Boasting a prolific startup landscape and a thriving ecosystem supported by active angel and venture funding networks, the U.S. stands out for its steadfast commitment to cultivating a knowledge-driven economy.

The assessment, conducted by Magazine’s Startup Ecosystem Ranking, scrutinizes 62 nations across five pivotal categories, encompassing human capital investment, research and development initiatives, entrepreneurial infrastructure, technical talent pool, and policy dynamics.

What about Cyprus?

As we mentioned above, the news for Cyprus is not good if we take into account only this report, as the country is in 56th position from the 62 countries on the list.

To be more specific, our island has a score of 37, just one point above Serbia and two below from Iran. Human Capital Investment and Policy Dynamics are the lowest points for Cyprus, while Research & Development and Technical Workforce are higher. The Entrepreneurial Infrastructure, is the hidden ace for the island, though generally, the scores for Cyprus are below average on every matter.

For statical reasons, Malta, which is considered a competitor country on many matters, is higher, in 38th position, with much better scores.

See below the ranking for Cyprus:

Cyprus is ranked on 56th position of 62 other countries, according to a worldwide report from CEOWORLD Magazine

For the full list see here

Startup World Cup Cyprus

“We are attractive”

The Future contacted with the Chief Scientist of Research Innovation and Technology of the Republic of Cyprus, Mr Demetris Skourides, and asked him about the above results. As we mentioned the report is based on a 200k respondents survey asking them to rank the friendliness of 130 countries. To make it into the list, a county should be recognized by at least 500 respondents.

The survey has a rather subjective nature and tends to favour larger, more recognized ecosystems. Cyprus’s presence on this list underscores its emerging status in the global market, suggesting a growing acknowledgement and recognition of its dynamic economic landscape.

Mr Skourides comments

He also notes that the report includes dimensions such as Human Capital Investment, Research and Development, Entrepreneurial Infrastructure, Technical Workforce, and Policy Dynamics. Similar dimensions can be found in the European Commission’s European Innovation Scoreboard where Cyprus stands at 105.4% relative to the EU average, the World Intellectual Property Office Global Innovation Index at which Cyprus ranks 28th out of 132 economies and the Global Entrepreneurship Monitor. Even more, in a recent report McKinsey & Company describes Cyprus as a burgeoning startup hub within Europe, ranking it highly for its ability to support startup scaling and its substantial contributions to the national economy through a vibrant startup ecosystem.

“The Government of Cyprus has and will continue to support the development of favourable conditions for entrepreneurship and innovation therefore fostering a supportive environment for startups. This includes favourable policies, such as advantageous tax regimes and supportive immigration policies, aimed at attracting and retaining talent as well as equity-based and equity-free investment within the startup sector” he highlights.

Cyprus’s method to record these data is taking into account the European Innovation Scoreboard, which is measuring the following in more detail:

As Mr Skourides explains, “the Cyprus Government support the launch and operation of the 7 centres of excellence which surpass 100m euro, showcasing tremendous commitment in supporting the R&D expenditure to public sector addressing point 2.1.1 above”. In addition, the policies in place for IP tax at 2.5%, tax deduction of 120% on R&D, and 50% tax allowance for investment in Cypriot-based innovation companies create a decisive advantage for Cypriot R&I and the startup ecosystem.

He also adds, substantial investments in modernizing the broadband connection for the entire country, while the national plan for skills development provides equity-free training for digital skills in areas such as workplace and office modernization, cloud technologies and AI.  Additionally, a major focus is also undertaken by the Cyprus Chamber of Commerce and other organisations which roll out training seminars to increase the skill capability of the public (1.3.2 and 2.3.1).

“Cyprus ranks 10th in the European innovation scoreboard for 2nd year in a row, and 27th in the global innovation scoreboard. The tax incentives combined with the strong human capital, geo-strategic location and strengths mentioned above, make Cyprus attractive amongst top countries for startups” Mr Skourides concludes.


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