Cyprus remains one of the EU’s lowest spenders on research and development (R&D) as a share of GDP, despite recording gradual growth over the last decade. According to fresh data from Eurostat, Cyprus’s R&D intensity — the proportion of GDP dedicated to R&D — rose from 0.48% in 2013 to 0.68% in 2023.

While this increase signals progress, Cyprus still lags behind most of its European counterparts. Its R&D intensity remains well below the EU average of 2.2%, a figure that has stayed consistent since 2022.

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R&D Expenditure on the Rise

In monetary terms, Cyprus’s R&D spending reached €213.5 million in 2023, up from €207 million in 2022 and significantly higher than the €87.5 million recorded in 2013. The steady growth in expenditure highlights the country’s ongoing, albeit modest, efforts to support research and innovation.

Across the EU, R&D spending saw a 6.7% rise in 2023, reaching €381.4 billion, up from €357.4 billion the previous year. Compared to 2013, EU spending on R&D increased by 57.9%, reflecting the bloc’s broader push toward technological development and innovation.

Cyprus vs. the EU: A Stark Contrast

Although Cyprus has made progress, it still ranks among the EU’s five lowest performers in terms of R&D intensity. Other countries in this group include Romania (0.5%), Malta (0.6%), Bulgaria (0.8%), and Latvia (0.8%). In contrast, Sweden (3.6%) leads the bloc, followed by Belgium and Austria (3.3% each) and Germany and Finland (3.1% each).

From 2013 to 2023, R&D intensity increased in 19 EU countries. The largest gains were seen in Belgium (+1 percentage point), Poland (+0.7 pp), and Greece (+0.7 pp). Cyprus, with its +0.2 percentage point increase, made more modest progress in comparison.

Where Does EU R&D Funding Go?

In 2023, the EU’s R&D expenditure of €381.4 billion was largely driven by the business sector, which accounted for 66% of total spending (€253.1 billion). The higher education sector followed with 21% (€81.7 billion), while the government sector accounted for 11% (€41.0 billion). The non-profit sector had the smallest share at just 1% (€5.5 billion).

Cyprus’s R&D trajectory shows signs of growth, but the country faces a steep climb to catch up with the EU average. Despite a decade of incremental increases, Cyprus remains one of the bloc’s lowest spenders relative to GDP. With R&D playing a crucial role in driving technological advancement and economic competitiveness, the need for accelerated investment in this sector has never been more urgent.