Cyprus tech sector grows as employers face STEM skills shortage

Nicosia, Cyprus. Cyprus’ technology sector has expanded through investment, startup growth and the arrival of international companies, while employers report a shortage of workers with skills in science, technology, engineering and mathematics.

Startup growth and investment

Cyprus’ startup ecosystem is valued at $4.2 billion after growing by 62.7 per cent over the past year. The country rose six places to 34th globally in the 2026 StartupBlink index, while Limassol entered the world’s top 200 startup cities for the first time.

In the first four months of 2026, seven Cyprus-based startups raised more than €12 million. Investment was directed towards artificial intelligence, robotics, fintech, property technology and mobile gaming.

Mismatch in education and labour demand

More than six in ten young people in Cyprus have completed tertiary education, placing the country among the European Union’s most highly educated.

However, 14.9 per cent of tertiary students are enrolled in STEM programmes, compared with 26.9 per cent across the EU. The Human Resource Development Authority (Anad) expects about 40 per cent of employment demand between 2022 and 2032 to be linked to STEM fields, although around a quarter of the active population has studied in those areas.

The European Commission’s latest assessment also identified continuing skills shortages in sectors needed for the digital and green transition.

Support for research and international recruitment

Technology businesses require developers, engineers, data specialists, cybersecurity experts and workers able to commercialise technology products.

International accelerators have entered Cyprus, more founders are choosing the country and public funding is being directed towards research and commercialisation. In March, a €3.4 million funding programme was launched to bring researchers and companies closer together.

Eligible companies can also recruit highly skilled workers from third countries, as attracting international talent forms part of Cyprus’ wider strategy for international businesses.