Speech by the Deputy Minister of Analysis, Innovation and Digital Coverage of the Republic of Cyprus, Dr Nicodemos Damianou, on the ninth Innovation and Entrepreneurship Discussion board
Good morning and thanks for the chance to be a part of this discussion board – a platform basically – connecting policymakers, business leaders, innovators and entrepreneurs, to offer solutions to a significant problem: methods to develop and scale up revolutionary ventures. For us, as Authorities, this interprets into how we may help the ecosystem navigate the journey from analysis to innovation, and in addition from bringing ground-breaking concepts to market, all the best way to rising them into scaleups and profitable companies.
Scaling up a enterprise is after all not nearly rising income or increasing market attain. It’s about constructing a sustainable basis for long-term success, whereas creating worth and having a significant influence on society. It entails reworking an concept, product, or service from one thing small and localised into one thing that may compete on a bigger scale, even globally. And administration capital is certainly essential right here; extra so than monetary capital normally. Professor Kavadias, I’m certain, will present us with a lot perception in that respect.
The query for me is: the place and the way can the federal government play a task? Why right here? Why on this nation and never elsewhere? And in response to this query, I imagine that our position as coverage makers is to create an setting that’s conducive to all the following: analysis – innovation – expertise retention and enterprise development.
Now that is fairly broad and generic; nevertheless, all of it begins with a imaginative and prescient, and there’s one for Cyprus that we have to construct on. It’s known as Imaginative and prescient 2035: for Cyprus to be one of many world’s greatest locations to stay, work, and do enterprise in. That’s the place innovation, digitalisation, the inexperienced transition, a sustainable and resilient economic system and a world-class academic system, amongst others, turn into strategic instructions and key enablers.
If we do a deep-dive into our analysis and innovation (R&I) technique, particularly, now we have a sensible specialisation technique that focuses (basically equally) on eight sectors: digital applied sciences, revolutionary supplies, agri-food, delivery, renewable power, house, well being and setting. And that’s all the things that issues; all the things that’s necessary. Nevertheless, in my opinion – and I’ll go away that for an additional dialogue – we have to begin prioritising and specializing in particular areas the place we are able to actually make a distinction, with out, after all, excluding any of those dimensions. Nobody, particularly small markets like ours, can excel in all the things equally properly.
For the previous few years (3-4 a minimum of), now we have been speaking about Cyprus changing into a regional expertise and innovation hub, and I feel that we are able to now discuss this extra meaningfully than ever. Our virtually non-existent R&I ecosystem 10-15 years in the past, has now grown right into a vibrant ecosystem with: 12 universities, 20 analysis organisations, 7 centres of excellence, but additionally greater than 500 startups and scaleups, 3500+ researchers and 4000+ entrepreneurs. If we take a look at the map of the European Innovation Scoreboard 2024, Cyprus is the one nation from south-eastern Europe to be a part of the Robust Innovators group – and it’s the third 12 months in a row, so it’s no coincidence. The optimistic trajectory of our ecosystem can also be mirrored within the International Innovation Scoreboard, the place Cyprus is twenty seventh globally, up from twenty eighth final 12 months. On the identical time, Cyprus is now that includes within the Prime 45 startup ecosystems globally in accordance with the StartupBlink International Startup Ecosystem Index and within the prime 50 in accordance with the European Patent Workplace, when it comes to the variety of patents issued.
All of that is complemented by a formidable development of the Info and Communication Know-how (ICT) sector, the quickest rising sector of the economic system over the previous 5 years, which now contributes greater than 13% of the nationwide Gross Home Product (GDP). This development is pushed by a creating neighborhood of tech multi-nationals selecting to convey their regional or international headquarters in Cyprus – and we have to construct on and interact with this neighborhood.
In response to the State of European Tech Report for 2024, introduced final week on the Slush occasion in Finland, which examines the evolution of the European tech ecosystem over the past ten years, Cyprus now options in eighth place in Europe (fifteenth globally) in the case of capital invested as a share of GDP (%) by nation. That is attributed, in accordance with the report, to a big prolong to Cyprus’ enticing bundle of reform measures and incentives. In truth, Cyprus recorded a 129% enhance in Overseas Direct Investments (FDI) primarily based on the evaluation by FDI Intelligence of the Monetary Instances – which is the best enhance amongst European Union (EU) member states – with the expertise sector main the best way.
Our bundle of tax incentives is certainly necessary and combines incentives each for the authorized entities but additionally for the people, which makes it fairly distinctive. We now have a really aggressive Mental Property (IP) regime, successfully lowering tax to 2.5%. Buyers in licensed Cypriot revolutionary corporations are capable of declare a 50% tax exemption, whereas corporates are allowed a 120% deduction on eligible Analysis & Improvement (R&D) bills. On the identical time, we provide enticing incentives to international employees to relocate to Cyprus, comparable to a 50% tax exemption for international nationals whose revenue is greater than €55K per 12 months (and that’s for 17 years), the Blue Card offering extra beneficial work and residence situations for extremely expert professionals, and the Startup Visa for launching revolutionary startups in our nation. We are literally at the moment revising the Startup Visa scheme to make it extra enticing and versatile, and we are going to quickly be capable to announce it.
As Innovation takes centre stage within the transformation of our nationwide economic system, we want, nevertheless, to focus past tax incentives. In response to the latest Draghi report, Europe, regardless of being a pacesetter in analysis in lots of respects, lags behind areas like america and China in the case of disruptive innovation and scaling up revolutionary corporations.
The information generated by our universities, our analysis institutes, all our artistic minds, can and must be harnessed to gas the entrepreneurial engine that drives development and progress. Because the Minister of Innovation and Digital Coverage, I’m conscious of the challenges our ecosystem is dealing with, in that respect. Whereas there isn’t any one-size-fits-all answer, the Authorities is dedicated to fostering an setting conducive to innovation and entrepreneurship, as I’ve identified earlier. This contains putting in a variety of instruments and measures to assist the ecosystem that reach past funding – which is able to, after all, at all times be a key part of our worth proposition.
By way of the Analysis and Innovation Basis, the Authorities gives an array of aggressive funding programmes that cater to all levels of the entrepreneurial journey, in addition to a portfolio of knowledge-transfer and innovation assist providers accessible freed from cost to the R&I ecosystem. As well as, the government-backed Cyprus Fairness Fund can be operational by the tip of the 12 months, providing a further financing supply to revolutionary startups and small and midsize enterprises (SMEs). Having stated that, we’re, after all, conscious that the expansion of the ecosystem is creating the necessity to revisit our budgeting in the direction of supporting this ecosystem.
One final level is the important facet of expertise and abilities; a scarce useful resource and a really difficult downside for all international locations globally, not simply in Europe. Linking schooling to actual market wants investing in steady reskilling / upskilling, whereas additionally introducing incentives to draw and retain prime expertise are key priorities. Micro-credentials and the collaboration of huge corporates with academic establishments are gaining traction and it’s as much as the business and the academic neighborhood to choose up the tempo. With ICT specialists now accounting for five.4% of the Cypriot workforce, recording a exceptional enhance of 17% compared to final 12 months, properly above the EU common of 4.3%, we’re making regular progress in constructing a powerful tech workforce able to spearheading innovation and digital transition. Cyprus, being small, has an necessary alternative to construct expertise density – allow us to not overlook that Cyprus has the best % of graduates with tertiary schooling in Europe.
To that finish, our governmental agenda features a holistic digital transformation of schooling, trainings supplied freed from cost by means of the Human Sources Improvement Authority, that are at the moment being revised below the course of the brand new Board of Administrators, in addition to Analysis & Innovation Basis (RIF) programmes – comparable to PhD in Trade and Submit-Doc that join the analysis neighborhood with Cypriot enterprises.
Girls and gents,
Coming again to our position as authorities, I imagine {that a} important success issue can be discovering the best way to attach the dots; constructing stronger hyperlinks between our analysis neighborhood, our innovating startup corporations and our entrepreneurs, and in addition offering the wanted ecosystem instruments, providers and assets for our researchers and entrepreneurial minds. So, let me shut by saying the next; yesterday we had the 2nd intergovernmental assembly with the Greek Authorities – as you will have heard.
As a part of this dialogue, within the space of analysis, innovation, expertise and digital coverage, now we have mentioned, amongst different issues, the next that relate to this purpose:
– Change experiences and sensible information to construct a startup ecosystem platform in Cyprus primarily based on the corresponding Elevate Greece platform. On the identical time, discover the linkage of the 2 nationwide startup registries in ways in which matter for each international locations. I do know that that is an space of explicit curiosity for the Centre for Entrepreneurship (C4E), and one the place the Centre can contribute, so we can be reaching out.
– Work along with the Ministry of Digital Governance of the Greek authorities to take part in a typical program for Synthetic Intelligence (AI) factories below the EuroHPC initiative. This program goals to create an ecosystem that can present entry to computing assets, digital providers and instruments wanted to develop exercise in AI.
– Collaborate on joined calls between the 2 international locations that can assist with the extroversion of our ecosystems. In truth, simply final week, we introduced a primary joined name with a complete finances of 4m euros, 2m euros by every nation.
These are two sensible examples of what we have to do to create this setting that can permit significant development for our ecosystem in a method that positively contributes to the economic system and helps scaling up of innovating concepts and companies.
I apologise for not having the ability to stick with you all through this nice expertise because of a Ministerial Council assembly. I want all of these competing at present within the entrepreneurial competitors the most effective of luck.
Thanks.
