A NEW ERA FOR THE UNIVERSITY OF CYPRUS AND ACADEMICS - FROM THE LABORATORY AND THE RESEARCH CENTRE OUT TO SOCIETY AND THE LABOUR MARKET - Filenews 26/4 by Evangelia Sizopoulou
An important decision concerning public universities, which are now entering another era, was recently taken by the Plenary Session of the Parliament, after the necessary discussions. In particular, the House approved amendments to the legal framework that regulates the establishment and operation of spin-offs, known by the international term "spin-offs", by public universities. These amendments are essentially aimed at improving the provisions governing the mechanisms for the utilization, conversion and dissemination of scientific know-how and inventions for the purpose of commercial exploitation of products or services.
The term "spin-offs" may not be particularly well known to the general public, but only to researchers and academics, but internationally it is a particularly popular term and entities. Spin-offs are innovative companies, founded by members of academic or research institutions (researchers, professors and students) and aim to commercialize intellectual property, technology or research results produced within the university.
The aim is to transfer the technology and research produced inside the university laboratory out to the market, transforming theoretical knowledge into practical solutions. Spin-offs, although opening up to the market and by extension, to society, continue to maintain an institutional relationship with their institution of origin, i.e. the university, which in turn can also participate in the corporate scheme.
Among the benefits recorded internationally are economic growth as spin-offs attract investment from large multinational companies and organizations, the utilization of scientists and researchers as well as the improvement of the quality of life of citizens through their products and inventions.
This field is of particular interest. Suffice it to say that if you do a quick search on the internet for spin-offs, you will "remember" that Google started in January 1996 as a research project of two PhD candidates at Stanford University in California and evolved today, just as we know it.
The new Cypriot legislation aims to encourage the establishment of spin-offs by the public universities of Cyprus to exploit their intellectual property, i.e. the research results produced by the academic institutions themselves and the conversion of scientific know-how and inventions into marketable products or services.
It is worth noting that the relevant amendments have been designed taking into account the best practices applied in academic institutions abroad where the institution of spin-offs is successfully implemented as well as the positions of academic bodies.
This decision satisfied the University of Cyprus, which already has a plan for its next day regarding spin-offs. Utilization, results and benefits from the whole process are on the table. The Vice-Rector for Academic Affairs of the University of Cyprus, Professor Tatiana – Eleni Synodinou, speaks to "F" about this issue and the great importance of this development.
–Why was it deemed necessary to amend the legal framework?
-The legal framework passed in 2018 was not supportive of the creation of spin-off companies, with the result that no spin-off has been established by public universities to date. The anachronistic restrictions it included, especially in terms of the participation of academics, discouraged the commercial exploitation of scientific know-how and inventions. The amendments that have been voted aim to remove these restrictions and align the legislation with international best practices.
– What are the main changes that have now taken place in the legal framework?
-The main point of change is that the restriction that existed on the percentage of participation in the share capital of spin-offs established by the University of Cyprus by the members of the academic staff and the permanent members of the Special Educational Staff of the University of Cyprus, which was set at 24%, is lifted. With the amendment, the percentage of the share capital that can be held by the permanent academic staff will be negotiated with the University, with the total percentage that the two parties can hold remaining at 49%.
In addition, non-permanent members of the staff of the University of Cyprus, such as researchers, inventors and co-inventors of the intellectual property exploited by the company, are given the opportunity to participate in the remaining percentage of the share capital. In this way, the possibility is provided to involve young researchers and postdoctoral students with ownership rights who will work for the further development of the inventive results and their commercial exploitation.
– How is it ensured that there will be no conflict of interest or unfair competition with the private sector?
-The new framework sets out clear approval procedures and restrictions to avoid the creation of situations of conflict of interest or unfair competition. In particular, it is made clear that the permanent members of the academic staff of the University can participate in these companies without assuming any executive role and remuneration and after obtaining a relevant approval that ensures that their participation is not incompatible with the function of the academic staff and does not go against the interests and mission of the University. In addition, the members of the academic staff are now given the opportunity to take a leave of absence of up to one year without pay if their greater involvement in the company is required, thus ensuring that they will not be employed at the University at the same time.
I should note here that the participation of researchers is a standard practice in all European countries and necessary for the success of these companies as these researchers and their teams of partners have developed the intellectual property that is exploited by the company and know very well the specifics of each sector.
The amendments also provide for the possibility for the company to use the facilities or equipment of the University with the relevant charge being made on purchase terms and in compliance with the principle of full competition. In this way, spin-off companies in which the University of Cyprus participates will be able to use its facilities, paying, like any other company or organization, the relevant fee.
Benefits at various levels for everything. Cyprus and the country
–What are the benefits of the creation of spin-offs by the University of Cyprus?
-The creation of spin-offs by the University of Cyprus is expected to offer multiple benefits for the academic community, the economy and society in general. Through the establishment of such companies, the University of Cyprus fulfills in practice its public mission of offering to society and transferring knowledge for its benefit, strengthens its role as an innovator and utilizes its intellectual property more effectively, while attracting new sources of external funding.
At the same time, for researchers, the creation of spin-offs provides them with the opportunity to participate substantially in the exploitation of their research results. In addition, the opportunities for funding and the development of collaborations for the development of their research are expanded and the prospects of attracting and staying highly qualified human resources in the research ecosystem of Cyprus are enhanced.
Significant benefits are also expected for the economy and society including, inter alia, the development of innovative products and services with high added value, the creation of quality jobs, the diversification of the production base towards knowledge-intensive activities and the strengthening of cooperation between academic institutions and industry.
– What is the international situation regarding spin-offs?
The creation of spin-offs is one of the most powerful levers of knowledge transfer from universities to the market internationally, contributing to the enhancement of innovation and the creation of high value-added jobs.
In many countries in Europe and worldwide, there are regulations that allow the flexible participation of academics, the use of university infrastructures and facilitations of participation in the commercial exploitation of research. This is linked to the "third mission" of universities, which is to participate and contribute to the community and to transfer knowledge and research for the benefit of society.
In Cyprus, the existing legal framework adopted in 2018 has not succeeded in practically leading to the creation of such companies as no spin-off has been set up by public universities to date. The amendments remove anachronistic restrictions and align the legislation with international best practices.
It should be clarified that the amendments do not introduce privileges but instead remove restrictions that do not apply almost anywhere else in Europe and will allow the University of Cyprus to fulfil its role in innovation and the dissemination of knowledge.
Key Points of the Reform
The government, announcing the change in the legislation, noted that it is opening new paths for the transformation of research into marketable products and the creation of specialized jobs. He spoke of a significant upgrade of the institutional framework with an emphasis on modernization and economic growth.
The new framework approved on 19/2/2025, by the Council of Ministers, aims to facilitate the transformation of scientific knowledge and research achievements into marketable products and services, leveraging the strong research base of Cypriot universities and research centers.
• Strengthening entrepreneurship in research: Spin-off founders will be able to acquire a larger percentage in their company, enhancing the incentive to do business.
• Facilitation of parallel activity: Staff members of public universities will be able to be active both in academia and in spin-offs at the university and in the spin-off, ensuring the continuous transfer of know-how.
• Institutional clarity and transparency: A clear separation is defined between the activities of universities and spin-offs, with the possibility of using university infrastructures under market conditions.
• Facilitating access to capital: Changes in the institutional framework are expected to enhance the potential of spin-offs to attract high-risk investments, enhancing their sustainability and growth.
The new regulatory framework emerged after extensive consultation with all stakeholders and the assessment of a dedicated know-how transfer expert from the United Kingdom, with the aim of identifying and removing barriers that have limited the development of spin-offs to date.
With these interventions, the Government noted that it is strengthening research and innovation, creating the conditions for the transition of scientific knowledge to the market, the creation of new highly specialized jobs and the further development of the Cypriot economy.
The new legislative framework aims to contribute to the further development of the Cypriot economy and the strengthening of its competitiveness at an international level, responding to the modern needs of the market.
