Immediate access to the latest advances in information technology is vital to business success and Cyprus has made innovation a top priority in its strategy to develop a digital economy.
Cyprus has managed to successfully exploit its strategic location at the crossroads of Europe, Asia and Africa – establishing it as a thriving international business centre with global connections. This success could not have been achieved without the support of an advanced communications infrastructure. Promoting the digital economy and developing secure electronic communications networks is high on the agenda in 2016, including creating more efficient e-solutions across all sectors. The government’s commitment to attracting foreign investment into Information and Communications Technology (ICT) projects and with start-ups springing up, Cyprus is being noticed internationally and was recently included in a list of eight emerging global technology hubs by Transfer Wire.
All the Right Connections
Cyprus has a fully digital network with reliable high-speed international connectivity via eight fibre optic submarine cables, including the world’s longest optical submarine telecommunications cable, SEA-MEWE-3, which links directly with South East Asia, the Middle East and the rest of Western Europe. Cyprus’ network boasts 100% broadband coverage, with DSL network capacities of at least 2Mbps, while telecommunications costs are among the cheapest in Europe. Satellite communications are an important part of business in Cyprus and the country has developed a simple, flexible and competitive licensing model. Cyprus has already issued three authorisations, resulting in one satellite in operation and four new satellites expected to be launched in the next three years. In the last five years, investments of companies in the sector reached €300 million. In addition, Cyprus has secured a significant amount from EU structural funds for the deployment of step-change technology, for the roll-out of Fibre-To-The Home (FTTH) networks. By 2020, FTTH networks are expected to extend to every private residence.
Telecoms and Privatisation Mobile operators in Cyprus offer high speed broadband mobile access through 3G and 4G technologies, with constant investment in new technologies. Cyprus also boasts some of the most cost-effective call rates within the EU and plans to proceed with the authorisation of new frequency bands (800/2600 MHz) by early 2016, which will give the opportunity for current and new providers to further enhance their networks in terms of speed, capacity and quality of service. Increasing numbers of technology companies are choosing to locate their operations in Cyprus, attracted by the island’s high-quality services, skilled workforce and favourable tax and business environment. The Cypriot government also offers financial incentives for innovative small and medium- sized enterprises setting up on the island. State-owned operator Cyprus Telecommunication Authority (Cyta) continues to dominate the market offering a full range of telecommunications services. Other key players with a prominent role in the telecoms landscape are MTN, Primetel and Cablenet. 2016 will be a critical year for the country, and following the stabilisation of the economy, the country is focused on attracting significant FDI to Cyprus.
With increased competition, the roll-out of 4G and expanding development in new solutions such as cloud services, Cyprus is continuously re-evaluating and upgrading its technology sphere. A key development in support of Cyprus’ digital strategy is the launch of the country’s first-ever Science and Technology Park (STP) in Pentakomo, near Limassol. The large scale project is a welcome move and will create applied research and development centres as well as office and support facilities tailored for science and technology companies. A key objective is also to promote business incubators in a bid to expand the range of opportunities for research and development.
The planned STP, located near the country’s main electricity power station and a short distance from the island’s main ports and airports, provides strategic investors with an interesting opportunity to finance, design, build and manage a landmark project. The tender notice was published in 2015 and has already attracted international interest. To sweeten the deal for foreign investors, Cyprus offers various incentives, such as tax breaks, greater flexibility in authorisation procedures and easier application process for residence and employment permits. In addition, investors will have tax-breaks for expenditure on acquiring patents or copyrights, buying shares in innovative businesses and startups, and additional breaks for the cost of buying fixed assets to be used in innovative operations. To expand the scope of the project, strategic investors could build an on-site hotel accommodating up to 100 guests, featuring restaurants and a conference centre, and an array of governmentfunded projects up to €3 million, including the road network and setting up power, telecommunications and water supply.
As a business services hub it is crucial for Cyprus to keep up with cutting-edge technology, and a new mentality geared towards innovation is slowly opening the market for more current and sophisticated tech solutions. International giants such as Microsoft, Oracle, SAP and IBM have been on the ground, supporting Cyprus’ tech evolution for many years, but there is room for further development and growth in the sector. Recognising that Information and Communication Technologies (ICT) are a catalyst to increase productivity and economic growth, Cyprus launched its ‘Digital Strategy’ in 2012. The strategy, which is line with the Digital Agenda for Europe, promotes the use of ICT in all sectors of the economy in a bid to increase private sector competiveness and to modernise the public sector.
The country’s digital agenda outlines a series of key objectives, which include connecting Cyprus with high-speed networks and to promote competition to create a more sophisticated infrastructure and cost-effective services. Modernising public administration through electronic services is a top priority, and in January 2016 Cyprus signed a memorandum with Estonia in the field of eGovernance and ICT. Through the agreement, Cyprus will benefit from Estonia’s extensive knowledge and pioneering know-how in eGovernance, which could result in annual savings of 2% of GDP. Another aspect is the creation of tools to promote eDemocracy, by consolidating government data centres and setting up call centres and online services to better inform both citizens and businesses about government services. Cyprus has also been looking at ways to encourage economic institutions, including government departments, to use technologies or implement policies and practices that are environmentally friendly both in production cycles and operations.
With plans to roll-out a national health scheme by 2019, the importance of eHealth solutions in Cyprus is rising. Installing an eHealth system in all hospitals is a strategic aim at controlling both the quality of service and cost. Cyprus’ performance in eHealth can be greatly improved by encouraging a greater adoption of medical data exchange. Currently, only 24% of Cypriot general practitioners exchange medical data electronically, versus 36% in the EU. In addition, Cyprus needs to increase its performance in relation to ePrescriptions, where only 16% of its general practitioners transfer prescriptions to pharmacists electronically. An important aspect of the agenda is also the inclusion of vulnerable groups into the helm of digital Cyprus, as well as promoting learning through ICT – using it as a dynamic tool to upgrade and reform the educational process. Digital entrepreneurship is an objective that goes hand in hand with this, in an bid to help businesses use ICT extensively to increase their productivity and become more competitive in domestic and international markets. In addition, a strong focus has been placed on increasing public and private spending on research and innovation in the ICT sector, which opens ample opportunities for foreign expertise.
Innovation and Start-ups
Compared to many of its European counterparts and regional neighbours such as Israel, Cyprus is still in its infancy in terms of its start-up ecosystem. However, the past few years have seen a leap in the provision of funding, support and mentoring opportunities to aspiring entrepreneurs and innovators. Start-up accelerators such as the Cyprus Business Angels Network, Cypriot Enterprise Link, Chrysalis Leap and Repower Cyprus have all boosted the environment, along with events such as Hack Cyprus Hackathons, the CleanLaunchpad Competition, as well as Startup Weekend and Startup Live. Youth unemployment is a serious challenge Cyprus has yet to overcome, but is also breeding more innovation in the ranks of the young. Homegrown talent and a burgeoning tech landscape have already launched some inspirational success stories. InfoScreen is revolutionising the corporate services industry in Cyprus, while 3D-construction toys system ENGINO is snapping up awards. Teach’n Go is a learning management system designed for professional education providers, while Covve has turned a simple concept into a powerful product to facilitate business. Diyful is taking the hard work out of do-it-yourself by offering an online platform and Ladybug is a monitoring and controlling system allowing users to regulate their household energy consumption.
An Emerging Tech Hub
Cyprus has big plans to become a centre of excellence for technology development, and with so much untapped potential the island provides interesting opportunities for tech-savvy investors and innovators. Both Cyprus University of Technology and the University of Cyprus are providing increasing numbers of highly qualified graduates to meet the sector’s growing demand, while the Cyprus Institute – a world class research establishment – is engaged in several ground-breaking and technologically innovative projects. With its strategic geographical location and established framework for technology and research initiatives, Cyprus is perfectly placed to realise the European vision of a digitally democratised society and see substantial growth in coming years.