Cyprus recorded a significant decline in its innovation performance for 2025, according to the European Innovation Scoreboard (EIS) released Tuesday by the European Commission. The country’s overall score dropped by 14.6 points compared to 2024, placing it in the “moderate innovator” category with 84.1 points, below the EU average of 85.9 for this group.

In the overall EU ranking, Cyprus now stands 17th among EU member states and 21st including neighboring non-EU countries. The drop represents one of the largest single-year setbacks in Cyprus’s recent innovation trajectory.

While Cyprus has made progress in some areas since 2018, this year’s fall is linked to chronic weaknesses in core pillars of innovation, particularly in the private sector. Business R&D spending remains significantly below the EU average, reaching only 35.9% of the EU benchmark. Public support for business R&D is even lower, at just 19.9% of the EU average.

The country ranks last in the EU in high-tech imports from non-EU countries and near the bottom in venture capital investment, at 25th place. These structural gaps have been compounded by a decline in indicators tied to small and medium-sized enterprises (SMEs), such as collaborative innovation, business process innovation, and employment in innovative firms.

Since 2018, Cyprus has recorded notable reductions in venture capital investment and imports of high-tech products from non-EU countries both of which are essential for scaling research into market-ready products. Compared to last year, there is a noticeable drop in the number of innovative SMEs engaging in partnerships, along with fewer enterprises introducing process-related innovations.

Despite the setback, Cyprus continues to outperform in specific areas. It ranks first in the EU for trademark applications, a long-standing strength, and maintains a high position in public-private scientific publications and international research collaboration. Additionally, the country holds third place in the EU in tertiary education attainment.

Since 2018, Cyprus has seen notable gains in the use of cloud computing services, access to high-speed internet, and the percentage of foreign PhD students, indicating gradual digital transformation and talent mobility.

In terms of non-R&D innovation expenditures, Cyprus is closer to the EU average, scoring 83.1%.

The Deputy Ministry of Research, Innovation and Digital Policy chose to attribute the drop in ranking to changes in the European Commission’s assessment framework, blaming the revised methodology for replacing indicators where Cyprus had historically performed well—such as broadband penetration and employment in knowledge-intensive sectors—with others where it ranks poorly, including non-EU tech imports and environmental production efficiency.

According to the Ministry, the updated methodology also affected indicators based on the Community Innovation Survey (CIS), particularly those tied to SME innovation adoption, employment in innovative firms, and inter-organizational networking. Changes in data collection and sampling may have further impacted results.

While the Ministry maintains a diplomatic tone, attributing some of the results to changes in measurement, the data reflect persistent structural issues in Cyprus's innovation landscape—especially in funding, private sector participation, and international technological engagement.

Still, the Ministry emphasized ongoing efforts to address these challenges. It cited the recent launch of the Cyprus Equity Fund and new blended financing programs from the Research and Innovation Foundation (RIF) as key steps toward improving capital access for innovative enterprises.

The 2025 Scoreboard also notes a slight overall decline in innovation performance across the EU, with the average dropping by 0.4 points since 2024. 13 member states improved their scores in the past year, with Malta (+7.6) and Luxembourg (+5.0) showing the strongest gains. Since 2018, all EU countries have improved, with progress ranging from +0.9 in Luxembourg to +30 in Estonia.