Cyprus has recorded a sharp drop in its innovation performance for 2025, the European Innovation Scoreboard announced on Tuesday.

According to the report, Cyprus fell by 14.6 points compared with 2024. Its score now stands at 84.1, placing it in the category of ‘moderate innovators.’

Despite the setback, Cyprus has improved its overall performance by 17.6 points since 2018.

Cyprus ranks 17th among EU member states and 21st when neighbouring countries are included.

Its current score is below the EU average for moderate innovators, which sits at 85.9.

The country stands out as the EU’s leader in trademark applications. It also performs strongly in joint publications between public and private sectors and in international scientific collaborations.

Cyprus is ranked third in the EU for the share of its population with higher education.

Yet there are major weaknesses.

Cyprus ranks last in the EU for importing high-tech goods from outside the bloc and for business spending on research and development. It is 25th in venture capital spending and scores poorly in both direct and indirect state support for business R&D.

“The funding of research and development remains a significant challenge for Cyprus,” the report said.

The country lags far behind the EU average in public support, reaching only 19.9 per cent of the EU average. Business investment stands at 35.9 per cent of the EU average.

However, for innovation spending not tied to research and development, Cyprus is closer to the EU average at 83.1 per cent.

From 2018, Cyprus has made solid progress in using cloud computing, boosting joint public-private publications, and expanding fast internet access.

Over the past year, it has also increased the share of foreign PhD students, improved internet speeds, and expanded cloud technology use.

On the other hand, compared with last year, Cyprus recorded declines in the number of innovative small and medium-sized enterprises (SMEs) collaborating with others, in SMEs introducing business process innovations, and in employment in innovative firms.

Across the EU, the scoreboard shows only a small overall drop of 0.4 points between 2024 and 2025.

The European Commission warns that this recent slowdown highlights the need for faster action amid global uncertainty and growing competition.

In total, EU innovation performance has grown by 12.6 points since 2018. But only 13 member states improved their scores compared with last year.

Malta and Luxembourg saw the biggest increases this year.