Cypriot R&D spending inching slowly upwards, finds report

Spending on research and development (R&D) in Cyprus would appear to be inching its way upwards, albeit slowly, according to the latest report from the country's statistical office. In 2004, Cyprus spent a total of CYP 27.2 million (€47.1 million), compared to CYP 23.9...

Spending on research and development (R&D) in Cyprus would appear to be inching its way upwards, albeit slowly, according to the latest report from the country's statistical office.

In 2004, Cyprus spent a total of CYP 27.2 million (€47.1 million), compared to CYP 23.9 million (€41.4) in 2003, and CYP19.4 million (€33.6 million) in 2002. This accounts for an increase in total R&D expenditure of 13.8% in 2004 relative to 2003.

The increase in spending can be seen across all sectors. In 2004, about 43% (CYP11.8 million or €20.4 million) of R&D activity was financed from government funds compared to 41.2% in 2003. As for the business sector, it increased its spending slightly, from CYP6.2 million (€10.7 million) in 2003 to CYP6.7 million (€11.6 million) in 2004.

The largest portion of R&D expenditure went to the natural sciences (CYP10.9 million/ €18.8 million), followed by agri-sciences, social sciences, and engineering and technology, which all saw investments of over €6 million.

However, despite an overall increase in spending, the share of the Gross Domestic Product (GDP) in Cyprus devoted to R&D is still low, standing at 0.38% in 2004, just 0.03% up from 2003. This is considerably below the average R&D intensity in the EU, which stood at 1.9% in 2004.

Cyprus' low levels of public and private R&D investment may go some way in explaining the country's poor performance in innovation applications. According to the fifth edition of the European Innovation Scoreboard (EIS), Cyprus is well below the EU average, ranking 17th among the 25 Member States.

The need to further increase R&D investment is one of the main priorities cited in the Cyprus National Reform Plan. The aim is to reach 0.65% of GDP in R&D investment by 2008. This will be achieved through a policy mix which focuses on boosting the country's scientific base and developing human resources. The programme also envisages increasing private R&D with the creation of innovation poles, along with 'business incubators' to help emerging companies survive and grow during the start-up period.

In a review of the programme earlier this year, the European Commission welcomed these measures, saying that they 'assemble the necessary building blocks for developing a full-scale research and innovation system'. However, questions remain regarding potential bottlenecks along the way and links between public and private R&D spending, while issues such as knowledge transfer and venture capital for innovation may deserve more attention, says the Commission.

Countries

Cyprus