The Innovation and Entrepreneurship Dynamics Newsletter which is published annually by EY, provides key information, data and developments in the Innovation and Entrepreneurship sectors in Cyprus, based on official data from the European Commission and the Government of Cyprus.
The promotion of innovative Companies and entrepreneurship is amongst the top policy priorities of the European Union as it is thought to be one of the main drivers of competitiveness and job creation. The 7th edition of the Regional Innovation Scoreboard1 (RIS) includes Cyprus at the country level and ranks it as a moderate innovator, a ranking that is well below the EU average.
As at the end of 2015, almost all the businesses in Cyprus (99.8%) were Small and Medium sized Enterprises (SMEs ) accounting for 45.7% of total employment. The European Union recognises that SMEs play an ever-increasing role in innovation and is exploring means of improving the environment for entrepreneurship and small firm development and increasing the innovation capacity of enterprises.
Research and Development (R&D) expenditure only accounted for 0.48% of Cyprus’s GDP in 2014, or €83.48m in real terms, amongst the lowest rates in the EU. At the same time, 52.7% (or €44m) of total R&D expenditure was attributed to research carried out at higher educational institutions (2014).
The Cyprus Entrepreneurship Fund was established by the Republic of Cyprus and financed by the European Investment Bank (EIB), with the view to facilitate access to finance for Cypriot SMEs, thereby supporting and strengthening entrepreneurship in the country. To promote investment in innovative businesses in Cyprus, the government has proposed new legislation that includes targeted personal income tax allowances. The proposed legislation is expected to go to the House of Parliament for a vote well before the end of the year.
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