GEM study shows growing business optimism in Cyprus
Nearly 40 per cent of Cypriots see opportunities to start a business, a new national report by the University of Cyprus has found.
The 2023–2024 Entrepreneurship Report also revealed that 60.5 per cent believe they have the skills to launch one.
However, 53.3 per cent report a fear of failure, which may prevent them from taking action.
The latest report marks Cyprus’ eighth consecutive participation in the Global Entrepreneurship Monitor (GEM), providing insight into entrepreneurial activity in the country.
The findings were welcomed by the Minister of Energy, Commerce and Industry George Papanastasiou, who stated that GEM is a particularly useful tool for the ministry and government.
He said that “its findings guide us on entrepreneurship issues and support efforts to promote Cyprus as an attractive destination for business activity”.
Moreover, he mentioned that there are around 125,000 businesses operating in Cyprus, employing approximately 500,000 people.
Of these, 119,000 are very small businesses employing fewer than 10 people, providing jobs for about 190,000 individuals.
A total of 5,400 small businesses employ between 10 and 49 people and account for around 100,600 jobs.
There are 858 medium-sized businesses, employing between 50 and 249 people, with about 82,500 employees.
Additionally, 155 large businesses in Cyprus employ over 249 people and provide work to approximately 125,500 individuals.
“These figures demonstrate the significant role that businesses play in our country,” the minister said.
He emphasised the ministry’s commitment to supporting businesses as part of the government’s strategy for economic growth and competitiveness.
He highlighted the rise in the number of adults in Cyprus who believe there are good business opportunities, reaching 39.8 per cent.
He also noted that new business ownership rose to 4.7 per cent from 3.9 per cent.
Cyprus ranks sixth in Europe in established business ownership, further reinforcing the positive perception of the country’s business environment.
“Cypriots are becoming more optimistic about the entrepreneurial opportunities they have,” he said.
He added that the increase in the number of new businesses indicates an activated market.
Furthermore, he stated that Cyprus compares favourably with other European countries and maintains a mature and stable business environment.
He also underlined the importance of calculated risk-taking, saying that failure typically affects those who are unprepared or take excessive risk.
Papanastasiou referenced policy efforts, including the Competitiveness and Internationalisation Strategy for Cypriot Industry 2025–2030.
The policy aims to shape a flexible, innovative, and technologically advanced industrial base.
The ministry, he mentioned, is implementing grant schemes to ease access to finance and improve liquidity.
“Our goal is to provide incentives to our business community to make investments that further strengthen competitiveness, making use of technology and the opportunities arising from green and digital transition,” Papanastasiou said.
The ministry has secured €362 million for the current programming period until 2027 for targeted grant schemes.
Specifically, €40 million is allocated for new entrepreneurship schemes, up from €21.7 million in the previous period.
The scheme has already launched its second call with a total budget of €20 million.
The report found that while more Cypriots see opportunities, many remain hesitant to act due to fear of failure.
The national survey was conducted with 2,000 adults aged 18–64, as well as 36 experts.
The percentage of adults seeing good business opportunities increased from 26.8 per cent to 39.8 per cent.
Those believing they have the capabilities to start a business rose to 60.5 per cent, above the European average of 51.8 per cent.
Fear of failure also increased, from 51.7 per cent to 53.3 per cent, higher than the EU average of 45.1 per cent.
In Cyprus, 66.9 per cent of respondents said they know an entrepreneur, compared to 52.1 per cent in Europe.
Fewer Cypriots, however, believe that starting a business is easy.
The Total Early-stage Entrepreneurial Activity (TEA) rate in Cyprus reached 11 per cent, up from 8.3 per cent and above the EU average of 9.2 per cent.
What is more, the report also showed that the gender gap remains notable.
Men in early-stage entrepreneurship totalled 14.5 per cent, while women stood at 4.9 per cent.
The ratio of women to men was 0.6, up from 0.4 but below the EU average of 0.7.
Among those aged 18–34, 14.4 per cent reported starting or running a new business.
In the 35–64 age group, only 5.8 per cent said the same.
Motivations included wealth creation (85.4 per cent), earning a living (65.5 per cent), making a difference (39.7 per cent), and continuing family tradition (27.1 per cent).
Cyprus ranks sixth in Europe for established business activity, with 8.2 per cent of the population running businesses older than 42 months, above the EU average of 7.6 per cent.
Meanwhile, the National Entrepreneurship Context Index (NECI) declined.
Elsewhere, respondents cited physical infrastructure as Cyprus’ strongest advantage.
Commercial infrastructure, government policies (taxes and bureaucracy), and market access scored lower than in the previous year.
Government entrepreneurship programmes ranked poorly compared with other countries.
In the aftermath of these findings, the University of Cyprus’ Centre for Entrepreneurship made several recommendations.
These included integrating financial literacy in education, training teachers in entrepreneurial methods, and creating mentoring and accelerator programmes for students.
The centre also proposed support services for women and vulnerable groups, incentives for investment in start-ups, tax breaks for global investment funds, and innovation funds aligned with public sector needs.
Further recommendations included digital strategy guidance, technology upgrade grants, improved physical infrastructure, and a national mentoring network of experienced entrepreneurs.
