Filenews 23 February 2026 - by Evagoras Prokopiou
With upgraded programs, research centers, internationalization and a more targeted student sponsorship, Cypriot universities are attempting to become a bridge between technology, innovation and the real needs of the labour market.
Cypriot higher education is at a turning point. In the period 2024–2025, public and private universities moved towards a model that is not limited to knowledge production but seeks to transform knowledge into skills, applications and career paths. The focus is on technological developments, innovation, internationalization and the search for a better connection with the labour market, in an economy that is changing rapidly and requires human resources with modern skills.
At the same time, according to the government's recent announcements in the social part of the policy, student sponsorship is being modernized and the budget rises to €62 million. The beneficiaries are expanded and the income and property criteria for families with five or more dependent children are abolished. This is an intervention that aims to reduce barriers to access and support households with increased needs, at a time when the cost of education and living remains a critical factor in choices.
Tertiary education as an "industry" of knowledge
The higher education sector has evolved into an important pillar of the Cypriot economy. More than 50,000 students are currently studying at universities and colleges, with about half of them coming from abroad. This internationalization strengthens the position of Cyprus as a regional educational hub in the Eastern Mediterranean and gives the system a dual role, educational and economic.
This picture, however, is accompanied by increasing competition. Trends in Greece, changes in the European academic environment and increased student mobility are pushing institutions to redefine their identity and invest in better quality programs, stronger research and greater extroversion.
The new institutional framework and the bet on quality
The immediately preceding period was marked by the approval of a new Strategic Plan by the state for the improvement and upgrading of higher education, based on quality and excellence, connection with the labor market, internationalization and incentives for foreign students. The goal is clear, a system that is more competitive internationally, but also more useful for the economy and society at home.
At the core of the discussion is the "skills mismatch", the mismatch between skills produced by the education system and skills demanded by businesses. Addressing it requires updating programs, better tools for tracking graduates, but also collaborations that bring students into contact with real projects, even before they complete their studies.
As a temporary response, in recent years the import of qualified personnel from abroad has been strengthened with tax breaks, mainly in high technology. This policy, however, is not considered viable, as without upgrading Cypriot education there is a risk of consolidating a "two-speed economy", with highly paid foreign workers.
Internationalization: an opportunity, but also pressure
Internationalization does not only function as a tool to attract students. It is also a mechanism for upgrading, through cooperation networks, participation in European schemes and joint actions with universities abroad. The strengthening of English-language programs, synergies and the approach of third countries are emerging as key tools, at the same time that the landscape is "growing" with the launch of a branch of the National and Kapodistrian University of Athens in Cyprus and with moves by Cypriot institutions to expand in Greece.
The message sent by the market is that academic competitiveness will be judged not only by the brand of an institution, but by its ability to offer modern programs, research with tangible results and a clear path to employment.
Public universities: research, applications and interconnection
In the public sector, the University of Cyprus and the CUT emerge as the main bodies for the production of research and know-how. Synergies with research centers, industry days and participation in projects with European or private funding create an environment where students not only come into contact with theory, but also with applied research.
In CUT, the most applied physiognomy is reflected in practical exercises and career structures that act as a "corridor" to the market.
At the Open University of Cyprus, distance learning is linked to upskilling needs, mainly for professionals and adult students, in fields such as IT and digital transformation.
Private universities and flexibility in the labour market
Private universities usually move with greater speed and adaptability, emphasizing the immediate updating of curricula and close contact with employers.
The University of Nicosia has integrated internships into its academic model through credit-based internships in fields such as IT, fintech, and cybersecurity, with internships often serving as a direct recruitment channel.
In the same context, European University Cyprus and UCLan Cyprus organize career and internship fairs every year, in which dozens of technology companies, consulting organizations and startups participate. These events are a key mechanism for connecting students and employers, enhancing the visibility and access of graduates to the labour market.
Frederick University, with a strong presence in engineering and information technology, maintains stable internship and international exchange mechanisms, enhancing the employability of graduates both in Cyprus and abroad.
Research, innovation and transfer of know-how
Strengthening research and innovation is a key pillar of higher education policy. Since the previous period (2024–2025), legislative regulations have been promoted that allow the creation of new Research Units and Centers of Excellence in public universities.
The House of Representatives has approved regulations that institutionalize the operation of these Centers of Excellence, offering universities the opportunity to specialize in high-priority areas and attract external funding. An indicative example is the "QSciTec" Center of Excellence at the University of Cyprus, which secured European funding for quantum technology research.
At the same time, in collaboration with the Deputy Ministry of Research, Innovation and Digital Policy, bills were drafted to modernize the legal framework of universities, with the aim of giving public institutions more flexibility in their participation in spin-offs, so that research results can be more effectively converted into products and services. The proposed amendments are reported to have been submitted to the Parliament and are expected to be examined.
The same period is accompanied by discrimination. The KIOS Center of Excellence of the University of Cyprus was honoured in 2024 with the European Digital Water Award of Water Europe, for its research in digital water resources management. Through the Research and Innovation Foundation (RIF) and European programmes, funds are channelled to universities and collaborative research networks, with the aim of enhancing the participation of Cypriot scientists in cutting-edge projects.
At the same time, it is pointed out that the country's overall innovation performance has improved since 2018, however recent data show a slowdown in the rate of improvement compared to the European average, which highlights the need for further investment.
The startup ecosystem and the role of universities
The connection between higher education and innovation is also reflected in the rapid growth of the Cypriot start-up ecosystem. According to the StartupBlink Ecosystem Index 2024, Cyprus recorded the largest increase globally, climbing nine places and receiving the title of the fastest growing startup ecosystem in the European Union.
The country ranks fourth globally among countries with a population of less than two million. Among the indicators listed, the 6th place in the world in the number of startup exits under 1 billion is also recorded. and the 9th place in the world in the number of investors per capita, while it is reported that there are five times more startups than in 2020. It is also pointed out that this is the only country with a population of less than two million that has four cities listed in the global startups index.
Cyprus shows strong performance in sectors such as fintech and gaming. It is reported to be ranked 39th globally in the Fintech sector and 25th globally in the Gaming sector, with Limassol occupying the first place in Southern Europe.
The Director General of the RIF, Theodoros Loukaidis, has pointed out that success is based on combined state support, financial programs and investment incentives. "We are creating a favourable environment for startups to develop products, attract private investment, expand internationally and succeed," he said.
Skills, STEM, and Employability Challenges
Despite the growing demand for skills in STEM (science, technology, engineering and mathematics) fields and the initiatives of recent years, Cyprus continues to record one of the lowest student participation rates in STEM studies in the European Union, which intensifies skills mismatches in the labour market.
According to forecasts by the Human Resource Development Authority (HRDA), about 40% of the total employment demand from the period 2022-2032 concerns STEM professions which, as some preliminary data show, have an increasing trend. However, only 25% of the working population has received relevant education. In 2023 (the latest real data), the share of higher education students enrolled in STEM programmes stood at 14.9%, compared to 26.9% in the EU, recording a decrease of 3.4 percentage points compared to 2015 and falling well short of the European target of 32% by 2030. In this context, the Council of the European Union recommended in 2025 that Cyprus increase student participation in STEM fields.
The majority of STEM students in Cyprus are directed to studies in engineering, manufacturing and construction (51.2%), a percentage close to the EU average, while participation in Information and Communication Technologies programs is higher than the European average (28.6%). On the contrary, enrolment in natural sciences remains lower.
At the same time, it is pointed out that STEM programs in higher education do not fully meet the needs of the laboir market, with the newly established National Graduate Tracking Mechanism expected to highlight further gaps and mismatches.
An obstacle to strengthening STEM is also the low performance of students in basic skills, as recorded in the results of the OECD's PISA 2022, which limit the possibility of excellence and innovation. To enhance the attractiveness of STEM, optional extracurricular programmes have been implemented in selected primary and secondary schools, but there is still no comprehensive national strategy exclusively for education in these areas.
The promotion of STEM is mainly part of broader policies for digital transformation. The national digital strategy 2020–2025 aims to increase the number of STEM graduates and improve their employability, while funds of approximately €24 million. euros from the Recovery and Resilience Plan finance digital education and relevant skills development actions. At the same time, the national strategy for artificial intelligence seeks to strengthen digital and AI skills by schools.
However, there are no mechanisms for systematic monitoring and evaluation of the effectiveness of these interventions. However, the new national digital strategy is expected to be issued in the immediate future with several additions.
At the same time, Cyprus is consistently among the EU countries with the highest tertiary education completion rates. In 2024, 60.1% of people aged 25–34 held a tertiary education degree, well above both the EU average and the European 2030 target. The expansion of the sector, particularly after the establishment of private universities from 2007–2008, led to a 42% increase in student enrolment in 2015–2023 and a 125% increase in the number of graduates over the past decade.
Despite the improvement in the employment rates of recent graduates, which in 2024 stood at 83.8%, skills mismatches remain pronounced. In 2023, 30% of workers with higher education qualifications were employed in positions that did not require this level of qualification, while the gender gap in favour of women remains significant.
At the same time, Cyprus records a particularly high outgoing student mobility, with almost one in three graduates obtaining their degree abroad.
As part of the sector's upgrade, a new strategic plan for higher education was adopted in December 2024, with a focus on improving quality and excellence, connecting more closely with the labour market and attracting international students. Among other things, it provides for the provision of undergraduate programs in foreign languages by public universities and the operation of branches of foreign universities as non-profit institutions.
Despite institutional reforms and the strong presence of higher education, data show that Cyprus is called upon to bridge the gap between high educational participation and the real needs of the economy, especially in the STEM sectors, which are considered critical for the country's green and digital transition.
A system that is maturing, but calls for a clearer direction
The overall picture shows a sector that is maturing and looking for a more substantial connection with the economy. Student sponsorship attempts to reduce barriers to access and respond to social inequalities.
Universities, on the other hand, are under pressure to produce graduates who will not just have a bachelor's degree, but cutting-edge skills, experience, and adaptability.
The big bet for the next phase is twofold: to increase the quality and international competitiveness of higher education, but at the same time to reduce the gap between studies and the real needs of the market, especially in STEM fields, which are considered critical for the country's green and digital transition.
