The role of start-ups in Cyprus today

With Cyprus being included in a list of emerging tech hubs, Andrey Dashin, founder of ForexTime Ltd (FXTM), Chairman of the Board of Directors and shareholder of the Alpari brand, discusses how start-ups can help boost the economy of the country.

I was glad to see that the World Intellectual Property Organisation in its 2013 Global Innovation Index listed Cyprus as a country showing great potential in intellectual property and technology output. With sophisticated infrastructure, low business set-up costs and a favourable tax system, many globally renowned companies such as NCR, TSYS, Viber and Wargaming are choosing Cyprus as the location for their regional headquarters and corporate administration centres. In addition to that, Bitcoin marketers Neo & Bee opened their first real-life branch in Nicosia this month.

The above news are an encouraging indication of the potential of Cyprus in incubating start-ups. But how can the country exploit this potential to boost the economy in the midst of an unprecedented economic crisis?

First of all, start-ups can contribute to the economy by creating new jobs even in a difficult economic climate. Several economic studies suggest that start-ups are where the job-creation action occurs. A 2010 study from the Kauffman Foundation demonstrated that all net new jobs in the US have been created by new firms less than a year old. I am confident that this applies to Cyprus. With unemployment in the country reaching 17 per cent and an estimated 73,000 people out of work, I would argue that increasing the number of start-ups will be one of the driving factors for the recovery of the economy in Cyprus.

It goes without saying that, to nurture start-ups, a business-friendly environment is crucial. Luckily Cyprus’ business culture can offer major advantages including a skilled multi-lingual workforce. I would urge these skilled young people to be alert, to spot opportunities and take risks. There are several communities, networks, movements and individual initiatives that aim at helping young people learn the basics of founding startups, pitch their ideas, gain access to funds and eventually launch successful ventures. Take advantage of these resources and give it a shot. You will not regret it. As Jeff Bezos, founder of Amazon, put it: “I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying”.

I would also encourage relevant institutions and authorities to further stimulate and support creative young entrepreneurs and to also promote funding and other opportunities that can enable and enhance the creation of startups.

Finally, start-ups can be a key vehicle for fostering innovation and driving growth. While hard times can create stagnation, they can also provide a spark for innovation and creativity. Research and innovation results from academic organizations and research bodies can be commercialized via the creation of startups thus multiplying their benefits for the economy and creating further development opportunities.

I firmly believe that this thriving start-up trend can help Cyprus secure better prospects for the future and emerge stronger from the crisis with renewed hopes for a better future.

Note: The content in this article comprises personal opinions and ideas and should not be taken or misunderstood as investment advice.