Research & Development - Cyprus Profile

Research & Development

New R&D Frontier

With world-class scientists and a rapidly growing number of innovative start-ups, Cyprus is producing new pioneers of the R&D frontier.

From developing pioneering techniques for storing renewable energy, to technologies that can tell whether a Picasso is a fake, Cyprus punches well above its weight when it comes to innovative scientific research that can be commercialised. Researchers at Cyprus’ universities, institutions and private research and development (R&D) companies collaborate closely with prestigious counterparts across the globe, and often act as coordinators of many EU-wide R&D projects.

There is now major potential for further R&D development in Cyprus given the existing research infrastructure, the availability of research scientists, and the government’s plans to treble investment in R&D to 1.5% of GDP in coming years. All this is likely to attract foreign investment in areas such as renewable energy sources (RES) innovation, biomedical engineering and information and communications technologies (ICT).

Merging Research and Business

The ambitious new national industrial strategy of Cyprus’ business-friendly government encourages investment in R&D to generate new models of economic development and foster know-how, innovation and start-ups. There are new tax and other incentives to attract foreign direct investment in high-tech and knowledge-based industries and to entice innovative manufacturers seeking an ideally located base for easy access to the world’s biggest markets.

Incentives already in place include a fast-track visa programme for start-up entrepreneurs from outside the EU to establish ventures with high growth potential. Although Cyprus’ expenditure on R&D accounts for a smaller percentage of its GDP than most of its EU partners, the island ranks first per capita among EU members competing for funds from Europe’s largest research and innovation programme, Horizon 2020. Cyprus has secured almost €90 million so far to finance some 250 projects by academic and research centres and companies. The universities and private R&D companies alike use internal sources to fund their R&D projects but are mainly funded on a project basis by the EU, and by customers and clients for applied research. The government is striving to capitalise on robust investment in R&D by the universities by improving synergies between academia and industry – with the University of Cyprus (UCY) providing the widest range of infrastructural facilities for R&D and applied research.

Cooperating with Both East and West

Because Cyprus has historically good relations with Russia as well as the EU and US, it has been able to develop relationships in innovation and R&D with both East and West. A high-powered Cypriot delegation visited Russia recently to accelerate the exchange of technologies and boost collaboration on innovation and start-ups. Formalising these aims, Cyprus’ investment promotion agency, Invest Cyprus, signed a memorandum of cooperation in Moscow with the management of the Skolkovo Innovation Centre. This is a sprawling science tech business hub near the Russian capital that is home to hundreds of start-ups and to more than 30,000 researchers. The aim is to boost cooperation between the two countries’ governments, businesses and research centres. The Cypriot delegation also promoted opportunities for Russian investment in Cyprus in R&D, technology, biomedicine and health, education, and energy.

Growing ICT Sector

Information and communications technologies (ICT) are a serious growth area for Cyprus – and a sector that is seeing active support from the government who recently provided €15 million in funding for the island’s leading ICT institution, matching the sum it had secured from the EU’s Horizon 2020 programme. The University of Cyprus’ KIOS Research and Innovation Centre of Excellence, in collaboration with Imperial College London, conducts multidisciplinary work that focuses on the monitoring, control, security and management of ‘critical infrastructure systems’. These include large-scale, complex systems and networks such as power, energy, water and transportation systems, telecommunication networks, and emergency management and response systems.

Contemporary concerns that such infrastructure is vulnerable to cyber-attacks underscores the global importance of KIOS’s work, which centres on producing advanced engineering and management tools that can be applied to solve real-life problems. To ensure that its research has maximal applicability and impact, KIOS collaborates with a large network of national and international academic, industrial, and governmental organisations. KIOS also has an innovation hub to promote technology transfer and liaisons with industry, as well as an entrepreneurship network to facilitate start-ups and venture capital investments.

The Rise of Rise

Unless you are a student or academic, it is unlikely that you will come across a research centre, which are mostly found in the leafy grounds of university campuses. Now a new kind of highly accessible research centre has been established in the heart of old Nicosia, which aims to help enterprises in that part of the Cypriot capital. Called RISE – an approximate acronym for Research into Interactive Media, Smart Systems and Emerging Technologies – it is an incubator and accelerator for both start-ups and established companies, with common working spaces and laboratories where innovative ideas can be tested. It is also a place for students and academics to develop their research in a user-friendly direction.

The project is a joint venture between Cyprus’ three public universities and the municipality of Nicosia, along with the Max Planck Institute for Informatics in Saarbrucken Germany, and University College London. In effect, RISE builds creative partnerships between local government, commerce and academic scientific research. Launched in November 2017, RISE has an initial team of academics from its partner institutions and is recruiting researchers with plans to have a staff of 120 within three years. The project has been very successful in competing for funds, so far securing €50 million, with €15 million from the EU’s Horizon 2020 programme – a figure matched by the Cyprus government that will be scheduled over 15 years, and with PwC and Eurobank offering their services in kind.

Economic Catalyst

The prestigious Cyprus Institute (CyI) in Nicosia has three research centres – developed in partnership with leading overseas institutions – each addressing challenging problems in the eastern Mediterranean region, but which also have relevance globally. at the CyI is truly international in its work and aims is reflected in the make-up of its more than 100 research staff – just under half of who are Cypriots, with the rest coming from 20 countries. The institute is also home to a graduate school whose mission is to train students from Cyprus, the region and beyond to become tomorrow’s leaders. As a non-profit institution, the CyI’s aim is not to make money but to ‘catalyse’ the economy. It has a growing number of mature projects that can be patented and marketed. The CyI, for instance, is a world-class centre for drone development. Its scientists can fit drones with atmospheric sensors that can provide almost instant 3D measurements of air pollutants. Meanwhile, the institute’s centre on energy, the environment and water, has carried out well- documented work in collaboration with the Massachusetts Institute of Technology (MIT) on the development of solar power and on monitoring climate change.

The institute’s Science and Technology for Archaeology Research Centre (STARC) brings together researchers from a broad range of subjects, including art history and archaeology, computer science, chemistry and physics, to preserve and understand cultural heritage. More specifically, STARC employs bio-chemical-physical techniques to analyse works of art, ancient artefacts and archaeological discoveries. It has also led the way in the 3D documentation of heritage assets and the development of digital libraries.

Harnessing the Power of the Sun

Given that Cyprus has 340 days or around 3,300 hours of sunlight a year, it is hardly surprising that so many local R&D projects aim to exploit the power of the sun to satisfy the island’s demand for energy, which currently is mostly imported. The University of Cyprus (UCΥ) will become the island’s first ‘green area’ in mid-2019, courtesy of a photovoltaic park that will have a peak output of 10 megawatts coupled with battery storage of 2 MWh capacity, making it the island’s largest self-sufficient renewable energy facility. The University already covers around 15% of its electricity needs through photovoltaics with around 400 kWp already installed on a number of university buildings.

Central to this flagship project is the work of the University’s FOSS Research Centre for Sustainable Energy, which carries out cutting-edge research in the field of renewable sources of energy, with emphasis on solar energy, smart grids, smart buildings, grid integration and enabling technologies. FOSS has been highly successful in competing for funds, so far securing €16 million, mostly from more than 50 EU, national and industrial-funded projects. Well-known international players in the field of energy such as Honeywell, Hanwa Q Cells, Gantner Instruments, IBM amongst other leading international brands are already collaborating with FOSS and are testing their products in Cyprus. FOSS strives to promote cooperation between academia, industry and business sectors, as well as contributing to the transfer of knowledge from advanced European clusters to the region. A key aim is to make Cyprus a hub for solar innovation, technology transfer, industry start-ups and job creation where ideas can grow and achieve their full potential.

Also, a €175 million project that uses an innovative graphite-based system to store energy generated by concentrated solar power is due to be operational by the summer of 2019. The 50 MW capacity EOS (green energy) plant is being developed by Alfa Mediterranean Enterprises Limited, a Paphos company, on 1.8 million square metres in the Alassa area of the Limassol district. The company secured €60.2 million funding from the European Investment Bank after winning a competition for innovative renewable energy technology held by the European Commission’s NER300 Scheme. The Concentrated Solar Thermal Power plant (CSP) system is innovative because it uses pure graphite to store solar-generated energy. The plant in Alassa will be the first of its size and type in the Mediterranean basin capable of storing solar-generated energy for 24 hours a day and operating for 365 days a year. It will supply about 5% of Cyprus’ electricity generation – enough for more than 65,000 households – with power on demand even after sunset.

The CSP system works by having solar-heated water pumped through coils of stainless steel pipes in steel tanks containing high purity graphite blocks. The result will produce super-heated ‘dry’ steam which in turn will power a turbine to produce electricity. The main advantage of this system is that it is autonomous and can operate around the clock. The CSP technology, developed by Solastor PTY Ltd, an Australian company, has been tested in Australia and China, but the plant in Cyprus will be the first to proceed as a planned commercial venture. Production will be sold to the Electricity Authority of Cyprus (EAC) at a price which is 40% cheaper compared to EAC’s current sell prices. This technology is also environmentally friendly as the water that evaporates into steam is partly re-circulated through the system, thus saving in water consumption. There are no green-house gas emissions involved and no chemicals or batteries are needed.

Developing Ideas into Viable Products

Most R&D activities in Cyprus are carried out in academic institutions and while they do excellent work, they do not offer the business and technical services to develop a product commercially. There are, however, private R&D companies which are commercially driven. The flagship of these companies is the Cyprus Research and Innovation Center (CyRIC), founded six years ago by Panayiotis Philimis, holder of a PhD in mechanical engineering and computer-aided product design and manufacturing.

CyRIC’s core areas are mechanical engineering design and prototyping, electrical and electronics engineering, robotics and wearables, biomedical engineering and information communication technologies. As a certified BIC (Business Innovation Centre), CyRIC has a national role in propelling innovation and supporting the entrepreneurial ecosystem, providing high-quality services to start-ups and SMEs and anyone who has a bright idea for an innovative product or service.

With its staff of 20, half of whom have PhDs, CyRIC can assist in validating the idea, draw up a business plan, develop the IP, design and develop a prototype which the centre can then help take to investors and to market. CyRIC has been involved in more than 35 R&D projects – mostly funded by EU and industry – worth over €40 million.

CyRIC founded Gravity, an international venture-building incubator which focuses on developing start-ups from early-stage to mature ventures, by assisting them in all the necessary steps and being with them throughout their journey. Gravity provides all necessary services, including access to working spaces, laboratories to develop prototypes in-house with the support of technicians, developers and engineers, mentoring and coaching, funding, among others. In 2016, CyRIC became the first BIC in Cyprus, certified by the European Business Network (EBN). Dr Philimis is also president of the Cyprus Association of Research Innovation Enterprises (CARIE).

Success Stories

Cyprus recently launched a fast-track visa scheme for technological entrepreneurs from outside the EU who launch or operate innovative start-ups with high growth potential. Tellingly, in the case of an already existing start-up, an external auditor must certify that at least 10% of the operational expenses went to R&D in at least one of the previous three years. This requirement reflects the importance that the government places on encouraging investment in R&D in the private sector. Several major international ICT companies have long operated regional headquarters in Cyprus, using the island as a hub for so ware development, system integration, testing services, R&D activities, project management, marketing and sales.

Among these are NCR, an America-based world leader in consumer transaction solutions, including ATM teller machines, and AMDOCS, a leading multinational so ware and services provider to global communications and media companies. Others who have their global headquarters in Cyprus include Wargaming, one of the world’s most popular and pro table publishers of video games, and Viber, an online communications program that competes with Skype. Viber’s success in Cyprus is a good advertisement for the island as it seeks to attract more tech entrepreneurs. Viber was started in 2010 by a team of foreign nationals who needed a place within the EU that had favourable taxation and was near to their homeland, so they set up in Cyprus with headquarters in Limassol. Viber grew rapidly and in 2014 was bought by the Japanese e-commerce giant Rakuten for US$900 million. Viber’s founders each realised a multiple return on their investments after paying the standard Cyprus company tax rate of 12.5% on their gains.

A Future of Innovation

Few would bet against Cyprus’ ambition to become a regional hub given the entrepreneurial air of Cypriots, the high percentage of those in tertiary and postgraduate education, and the business- friendly attitude of successive administrations – none more so than the current government. No EU country per capita is better at competing for EU R&D funds, while coordinated strategic planning by the government and private sector has already resulted in the launch of successful projects and the creation of many innovative products.

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September 2018

Cooperation Partners