CYPRUS: Innovation is the key to future economic growth

While Cyprus lags behind the rest of the European Union in digital transformation and innovation, the government has appointed Kyriacos Kokkinos as chief Scientist in an effort to improve its game.

Kokkinos has been assigned to oversee the implementation of Cyprus’ research, technological development and innovation strategy together with the National Research and Innovation Council, and the Research and Innovation Foundation.

Kokkinos has experience in private sector companies that promote innovation and previously held the position of vice president of the Research Promotion Foundation, and as Chief scientist is also an ex-officio member of the National Research and Innovation Council, which was formed in October last year, as an advisory body that reports to the President of the Republic.

Talking to the Financial Mirror, the Chief Scientist acknowledged that Cyprus is lagging in innovation, and his task and the RIF, and the Innovation Council is to build the ecosystem in which companies and the state will be able to make use of innovative ideas and products.

He said that while Cyprus is performing well when it comes to research carried out by excellent researchers when utilizing ideas and research to create new products and services the country is seriously behind.

The quality of research is measured by international indicators using specific objective criteria. Today, for the most part, our scientists and academics produce research, which is often published in accredited scientific magazines, expanding the country’s academic prestige and helping a university to achieve a higher ranking on global charts. Unfortunately, that is as far as we go, said Kokkinos.

Our role is to bring the academic-research area to the market in order to secure the sustainable future of our country.

He said there is a wide gap between this basic or applied research to transforming it into an innovative idea which can then be commercialized. Basic research is very important, but it is only a part of the route and few ideas become a complete product in any case.

While research is on track the great challenge we have before us is to connect it with the business community to come up with ideas and products through the collaboration of academic research centres and businesses.

The universities do not have the knowledge or the mandate to take things to the next level. It is like they are working in a silo. This is the task we have before us. To build bridges between the academic and the business world.

This gap is referred to as the Valley of Death. Kokkinos said in his opinion there are two death valleys: the technological and the commercial.

For example, the idea as an idea in the workshops may be good, but it is not mature or so important as to make business use. Or they do not have the technological knowledge to turn it into a product. On the other hand, excellent technological ideas may lack essential components such as a good business model, or investors who will contribute to their realisation or a good communication plan.

No Culture

A recent CyStat study revealed that just 36.5% of companies in Cyprus employing ten or more employees had carried out any kind of innovative activity in the years 2014-2016. Kokkinos said that companies do not have the culture or have yet to feel the need to invest in innovation.

We need to educate the country’s business world on benefits of investing in innovation. My personal view is that companies cannot ensure their sustainability without investing in innovation. We need to familiarize them with things like startups and venture capital.

On whether Cyprus invests enough on innovation, Kokkinos admitted that the country should do more, but added that just providing innovation grants to companies will not get us very far, as the island lacks infrastructure.

Europe is not homogeneous in terms of research and innovation.

While Scandinavia and countries like England and Germany have a higher momentum. In the south, even Spain, this is a process which has now begun. We, as Cyprus, spend only 0.56% of GDP on research. Europe is currently at 2% and wants to go to 3%. For Cyprus, even one percentage point upwards is about Euros 200 mln a year. Together with the Euros 110 mln given today, the sum amounts to Euros 350 mln.

Kokkinos said it was important that infrastructure must be laid, which is what he and the Innovation Council is focusing on.

If we were to increase the budget as of tomorrow, the companies receiving grants would not know what to do with it. That is why we need to convince companies on the need for innovation and its benefits.

The Chief Scientist also said that for business to move forward with innovative products and services cooperation with companies excelling in the sector is needed.

That is why we are pushing for companies to take part in EU and state-financed programmes such as the ‘Teaming’ and ‘Horizon 2020’.

Kokkinos said Cypriot companies can excel in innovation. This year three Cypriot proposals were selected by the EU’s Horizon 2020. The proposals concern the creation of new Centers of Excellence with a total budget of Euros 90 mln.

The three proposals selected are: “Marine and Maritime Research, Innovation, Technology Centre of Excellence” coordinated by Larnaca Municipality which aims to create an international scientific and business centre of excellence in the fields of maritime and marine research.

East Med Climate

The second is “Eastern Mediterranean and the Middle East – Climate and Atmosphere Research Center”. Coordinated by the Institute of Cyprus, aims at upgrading and expanding the existing infrastructure of the Institute of Atmospheric and Climate Issues, a Center for Research and Innovation, focused on the environment.

And the third is “Biobanking and the Cyprus Human Genome Project”. Coordinated by the University of Cyprus, aims to upgrade existing infrastructure to a modern Biobanks and Research Infrastructure for the human genome with multiple applications in the health sector.

Each of the Centres of Excellence will receive a total of EUR 30 mln. Some EUR15 mln will be provided by the Horizon 2020 Program and EUR 15 mln by the Republic of Cyprus through the budget. A total of EUR 190 mln worth of grants have been absorbed from EU mechanisms regarding innovation schemes.

This is just part of the strategy, currently on the drawing table, until the creation of a Deputy Ministry of Innovation which is planned for this year.

We are embarking on a long journey, but the destination will be worthwhile. Currently, Cyprus is famous for its sun and its tourism. Our aim is to put Cyprus on the map also as an innovation centre, said Kokkinos.

The country’s economic system has what it needs to stay alive. Innovation is what will make it grow and become more competitive.

Asked about how digitalization of the economy fits into the picture, the Chief Scientist said that digitalizing the economy on its own, cannot be considered as innovation, as the process has been running for a couple of decades. It is, however, a tool necessary for the advancement of innovation.

The same goes for e-governance. Citizens should have been able to execute 80% of their dealings with the state online.

On the digital signature, which has been discussed for some years now, Kokkinos said that Cyprus is still far from moving from theory to practice.

Regarding eGovernment issues, these are unfortunately more difficult and will take some time. However, I believe that in the next 18-24 months we will see things being launched. The problem we have with eGovernment is the time-consuming tender process.

Kokkinos said people and businesses should not fear technological advances and innovation as this does not mean the loss of jobs as many fear.

Yes, we may see companies such as banks laying off people as they adopt innovative technologies, but at the same time jobs are being created in other departments such as client experience and designing innovative products.

Source: The Financial Mirror