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Cyprus: boosting engagement between universities and research institutes with businesses

A PSF expert panel has made recommendations on how Cyprus’s publicly funded universities and research institutes can increase their engagement with the business community. The main reason for the current low level of engagement is a shortage of firms with sufficient “absorptive capacity” to benefit from the research, laboratory and consulting services that universities and research institutes offer. Measures to boost engagement with the enterprise sector need to go hand-in-hand with policy action to raise business demand for knowledge-based services.

Cyprus boasts three public universities, five private ones, and three non-profit colleges. Together they have some 44,000 students, almost half of whom come from abroad. In addition, there are several private, non-profit research organisations and three public research institutes doing high-level work. But as the university and research sectors have grown, the expectation that this would generate positive spill-over effects for the economy have not been met.

While Cyprus has a high level of tertiary education attainment among the population at large (ranking second in the EU), brain drain is endemic as graduates fail to find employment on the island and leave for better opportunities abroad. In addition, in 2016 the Cypriot higher education sector derived just 0.8% of its income from business sources. A key reason is that 95% of the island’s firms are micro-enterprises (i.e. have less than 10 employees), and the great majority are active in traditional trades and local services. 

In 2019, the Cypriot authorities turned to the Horizon 2020 Policy Support Facility (PSF) for strategic advice to boost the engagement of the country’s publicly funded universities and research institutes (RIs) with businesses. Following two field visits to the country and detailed analysis, the PSF panel of innovation experts from Austria, Finland, Greece, Luxembourg and The Netherlands have produced 15 operational recommendations grouped under three priorities:

  • The first set of recommendations aims to reset the framework conditions under which the RIs engage with business, including: mandating universities and research institutes to engage in “knowledge transfer/innovation”, providing financial incentives to encourage this engagement and clarifying the EU State Aid regulations regarding RI-business interaction.
  • The second group is about professionalising RIs’ service offerings, developing similar, structured service offerings for contract and collaborative research, laboratory services, and technical consultancy, underpinned by standard forms of contract (templates) and clear pricing principles and practices, along with full economic costing of their services to external parties in order to resolve the (real or imagined) constraints of the EU State Aid Framework.  
  • The third priority is to revise public schemes incentivising research and innovation to actively support RI-business interaction, including: a competitive Key National Infrastructure Programme to provide RIs with a stable source of funding for large-scale research facilities while avoiding unnecessary duplication, the existing business innovation voucher scheme, a collaborative research programme not tied to specific scientific fields or economic activities but intended to launch new or improved products or services, and a graduate placement scheme whereby SMEs receive financial assistance for the employment of recent university graduates.


For further information: 

Read the summary article of the Horizon 2020 PSF Specific Support to Cyprus

Read the Executive Summary in Greek of the Horizon 2020 PSF Specific Support to Cyprus

Read the Final Report of the Horizon 2020 PSF Specific Support to Cyprus

Read more about the Horizon 2020 PSF Specific Support to Cyprus

Learn more about the Horizon 2020 PSF Policy Support Facility 

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