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Cyprus Technology Sector Transforms Into Economic Powerhouse

by THEFUTURE.TEAM

May 21, 2026

Robust Growth Redefines The Economy

KPMG Cyprus Partner Christophoros Anayiotos said Cyprus’ technology sector has evolved into one of the country’s main economic growth drivers, with its contribution projected to reach €5.9 billion, or 16.2% of GDP, by 2025.

Speaking at the TechIsland Summit, Anayiotos presented findings from KPMG Cyprus’ 2025 economic impact assessment, which examined the expanding role of technology and ICT activities within the Cypriot economy.

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Sectoral Contributions And Economic Impact

According to the report, the sector’s total gross value added is expected to reach €5.5 billion, accounting for approximately 17% of Cyprus’ overall GVA. Information and communication technology activities contribute the largest share at €4.1 billion, followed by professional, scientific and technical services at €875 million and financial and insurance activities at €604 million.

KPMG estimates that when indirect and induced economic effects are included, the sector’s broader impact rises to €11.9 billion. The findings highlight the increasing influence of technology across multiple areas of the economy.

Transforming The Labor Market

Employment growth in the technology sector has also accelerated significantly. The report showed that direct technology employment expanded at a compound annual growth rate of 9.7% between 2016 and 2025, reaching approximately 48,200 jobs. That workforce includes around 31,700 Cypriot nationals, 4,100 employees from other EU countries and 12,400 non-EU professionals. Growth among non-EU employees reached 30.1% annually during the period, considerably faster than the 6.2% annual growth recorded among Cypriot workers. Combined with indirect employment effects, the sector currently supports roughly 79,000 jobs across Cyprus.

Driving Investment And Innovation

Technology and ICT activities have also become increasingly important for foreign direct investment. The sector now represents 17% of Cyprus’ inward FDI stock, making it the country’s third-largest destination for foreign investment after financial services and real estate. Cyprus currently ranks third among EU member states in ICT contribution to total gross value added at 12.5%, well above the EU average of 5.6%. The report also noted that GVA per ICT employee in Cyprus is approximately 36% higher than the EU average, reflecting relatively strong productivity levels.

Challenges And Future Directions

Despite the sector’s rapid expansion, the report identified several structural challenges, including dependence on high-tech imports, relatively low private-sector research and development spending and limited financing availability for innovation projects. Lower patent and industrial design activity compared with other EU countries also remains a concern. Anayiotos called for greater investment in digital infrastructure, STEM education and workforce development to support long-term sector growth. Additional recommendations included improving international connectivity, strengthening Cyprus’ positioning as an ICT hub and advancing integration with the Schengen Area.

Conclusion

KPMG’s analysis highlights the increasingly central role technology plays in Cyprus’ economy through its contribution to GDP, employment and foreign investment. The report also suggests that sustaining future growth will depend on continued investment in skills development, infrastructure and innovation capacity.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.