Research spending in Cyprus remains low — private businesses lead the way

Research spending in Cyprus remained at a low level of 0.83 per cent of Gross Domestic Product (GDP) in 2021, despite a significant 8 per cent increase compared to 2020, according to the latest report from the state’s statistical service.

These figures indicate that Cyprus continues to lag behind the European Union (EU) average of 2.26 per cent of GDP allocated to research and development activities.

According to the report, the business sector accounted for 42.2 per cent of total research expenditure in 2021, with 23.3 per cent funded by public sources, totalling €46.4 million.

The majority of research spending was focused on natural sciences, amounting to €85.5 million, while the number of individuals employed in research activities reached 4,209.

Although there was an 8 per cent increase in research expenditure in 2021, compared to the previous year, the statistical service highlighted that “Cyprus’ share of GDP allocated to research and development activities remains low compared to other countries”.

Across EU member states, the average research expenditure as a percentage of GDP stands at 2.26 per cent, ranging from 0.47 per cent in Romania, 0.64 per cent in Malta, and 0.69 per cent in Latvia to 3.19 per cent in Austria, 3.22 per cent in Belgium, and 3.35 per cent in Sweden.

However, the report also highlighted that Cyprus has one of the highest average annual growth rates in research expenditure, reaching 10.6 per cent for the period 2000-2021, compared to the EU average of 4.1 per cent for the same period.

Breaking down the research expenditure by sector, the business sector accounted for €84.1 million, a share of 42.2 per cent of the total, followed by tertiary education with €76.6 million, which accounted for 38.4 per cent.

In addition, non-profit private institutions spent €26.8 million, a share of 13.4 per cent, and the public sector spent €12 million, a share of 6 per cent.

These figures represent a slight shift compared to 2020, with shares of 44.3 per cent, 36.1 per cent, 13.5 per cent, and 6.1 per cent, respectively.

Within the business sector, the information and communication sector was the main contributor to research activity, with expenditures reaching €49.4 million.

The manufacturing industry, particularly the production of pharmaceuticals, electronic computers, electronic and optical products, and electrical equipment, also made a significant contribution, amounting to €23.5 million.

It should be noted that public sources funded 23.3 per cent of research activity in 2021, amounting to €46.4 million, compared to €42.5 million or 23 per cent in 2020.

In addition, public universities accounted for €26.9 million, while €44.3 million came from external sources, including funding from the European Union. Private sector funding amounted to €81.9 million, accounting for 41 per cent of the total.

Moreover, the majority of research expenditure was focused on natural sciences (€85.5 million), followed by engineering sciences (€64.2 million), social sciences (€22.7 million), medical sciences (€10.6 million), agricultural sciences (€8.9 million), and humanities (€7.6 million).

In terms of employment, the number of individuals engaged in research activities in 2021 reached 4,209, compared to 4,196 in 2020.

In terms of full-time equivalent employment, this figure amounts to 2,249 individuals, of whom 889 or 39.5 per cent were women.

What is more, approximately 32.4 per cent of the research workforce held a doctoral degree.

Despite the overall increase in research expenditure in Cyprus, these findings highlight the need for further investment in research and development to bring the country closer to the EU average and foster innovation and scientific progress in various fields.