Echoes from the future: The missing pieces in Cyprus’s emerging tech ecosystem

Business educationstartupstechnologyTop News Echoes from the future: The missing pieces in Cyprus’s emerging tech ecosystem Demetrios Zoppos Headshots Relevant News Echoes from the future: The missing pieces in Cyprus’s emerging tech ecosystem 24 June 2026 Temperatures to hit 38°C inland as Cyprus stays sunny on Wednesday 24 June 2026 Trump’s Board of Peace to meet in Cyprus next week, Times of Israel reports 23 June 2026 newsroom 24 June 2026 FacebookXWhatsAppEmailPrintViber Demetrios Zoppos on technology, innovation, and Cyprus’s place in the world that’s coming. How the future is manufactured Most people, including most policymakers, picture the production of technology as a relay race. Universities run the first leg by producing research. Government runs the second by funding it. Companies run the third by turning research into products. Customers run the fourth by buying them. The picture is intuitive, orderly, and broadly wrong. Technology production is not a relay race. It is something closer to a chemical reaction, in which the same agents have to be in the same room at the same time for anything to happen, in which the agents do not pass discoveries to one another in sequence but combine, recombine, fail, and occasionally produce something that did not previously exist. If we want to understand how Cyprus can become a producer of technology, we should first understand how the reaction actually works. Invention is not innovation The distinction matters and is usually blurred. The economic historian Joel Mokyr, who was awarded the Nobel Prize in Economics last year for this work, drew a careful line between what he calls propositional knowledge, our understanding of how the natural world works, and prescriptive knowledge, our understanding of how to do things in it. Universities, at their best, are factories of propositional knowledge. Engineers, craftsmen, and tinkerers are the keepers of prescriptive knowledge. Mokyr’s central argument, developed across his career, is that sustained economic progress requires the two to feed each other in a tight loop, and that what we call the Industrial Revolution was in significant part the moment this loop closed: when scientific understanding and practical technique began to inform each other systematically, through institutions that allowed that interaction to happen. Joseph Schumpeter, working a century ago, was looking at the same loop from a different angle. He noticed that the agent who actually combines the two kinds of knowledge into something that produces new value is the entrepreneur. Most propositional knowledge never becomes prescriptive. Most prescriptive knowledge never finds a new application. Innovation, in Schumpeter’s sense, is what happens on the rare occasions when someone connects the two and someone else is willing to pay for the result. The operational test for whether this has happened is unforgiving. It is what venture investors call product-market fit: the moment when at least one identifiable customer segment is willing to put its hands in its pockets and pay for the thing being built. Until that moment, the company has a proposition and a hope. After it, the proposition has a chance to become a business. Everything else in the technology production system, the funding, the policy, the legal infrastructure, the talent, exists in service of the entrepreneur’s ability to reach that moment, or to fail in a way that allows another attempt. The cast of the reaction The agents in the reaction are fewer than people sometimes suppose. There is the researcher, who produces the primary discovery, usually in pursuit of something else. There is the technical translator, often a postdoc or research engineer, who recognises that a discovery might be useful and is willing to do the unglamorous work of figuring out what for. There is the entrepreneur, who leaves whatever they were doing and assembles a company around the possibility. There is the early investor, who provides the capital that lets the entrepreneur stop doing other work. There is the first customer, who buys an unfinished product because the alternative is worse than the risk. And there is the infrastructure, legal, regulatory, institutional, framework that governs whether any of this happens in months or in years. The entrepreneur is central not because they are the smartest or most important agent, but because they are the only one with no fallback. The researcher has academic papers to publish. The investor has a portfolio of deals. The customer has other vendors and options. The university has other research priorities. Only the entrepreneur is “all-in” with no neutral position they can occupy. Everyone else’s effort is leveraged by the entrepreneur’s committed presence. Remove the entrepreneur and the leverage disappears. What a technology startup actually is It is worth correcting a popular picture. Most technology startups are not inventing new technology. They are taking mature technologies, computers, the internet, mobile devices, cloud computing, machine learning, and combining them with specific customer problems. The risk in such a company is rarely whether the technology will work. The risk is whether anyone will buy what is built with it. Only a small fraction of startups, the deep-tech minority, carry primary technological uncertainty. The rest, which is most of them, are gambles on product-market fit using technologies that already exist. This matters for any country thinking about becoming a producer, because it tells us the realistic shape of the answer. Deep-tech founders are important but rarer, and they assume technological risk on top of the usual commercial one. Founders combining mature technologies with specific customer problems are typically the bulk of the producer’s economy. The small country, cursed and blessed Small countries face a particular condition. The curse is that there is no domestic market large enough to sustain a serious technology company in the early stages of product-market fit. A Cypriot startup that limits itself to selling in Cyprus will run out of customers before it runs out of product to sell. The blessing, which is real, is that this constraint forces a discipline that most companies in larger markets never develop. Cypriot startups have to think internationally from the first week of building, because there is no alternative. The result, when it works, is companies that are extraverted, ambitious, and competitive from the day they sell their first contract. Israel, the most studied case of a small country producing technology, did not succeed in spite of its smallness. It succeeded partly because of it. Cyprus has built more of this reaction’s infrastructure than its critics acknowledge, and less than its cheerleaders claim. The applied-research base is real: the universities, the eight Centres of Excellence, the grant funding channelled by the Research and Innovation Foundation, and the work of organisations like Cyprus Seeds in connecting deep-tech teams with the discipline of building companies. The framework strengths are real too: ease of incorporation, a common-law legal system, widespread English, a tax regime that includes specific incentives for risky equity investment. But the reaction is only now starting to shape, and the chemical-reaction picture explains why. We are missing several of the ingredients and many of the catalysts. The ingredients we lack are not impossible to find, they are simply not yet there in sufficient quantity. We do not have enough scientists willing to leave the laboratory and take the leap into entrepreneurship, and the culture that would push them to do so is only beginning to form. Apart from one or two specific sectors, we do not have a broad industrial base of corporate buyers ready to take a risk on a local startup as a first customer, which is the moment at which most companies either become viable or do not. And we have a handful of sectors in which Cypriot founders have learned how to sell internationally, but only a handful. The catalysts have been late to arrive. The governance and legal environment for spinouts has only just recently begun to be shaped to European standards. The venture capital sector deep enough to act as the reaction’s catalyst is emergent rather than established, including 33East, the fund where I am a partner, and a small number of others arriving in the past few years. The “valley of death”, the stretch between a working laboratory result and a paying customer, is wider in Cyprus than the strength of the upstream research would suggest, because the agents needed to close it – such as startup accelerators – are just beginning to arrive. This is an early-stage reaction that is only now beginning to show signs of taking off. The missing pieces are identifiable, finite, and addressable. None of what is missing requires Cyprus to become a different country. The community of entrepreneurs The reaction needs one more thing the textbooks rarely mention. Entrepreneurs are drawn to other entrepreneurs. They want to be near people doing the same impossible thing, because the conversations are different, the standards are different, the willingness to take a risk is different. A country that has one entrepreneur has a story. A country that has fifty has the beginning of a community. A country that has five hundred has a feedback loop in which the founders of one generation become the angels and mentors and acquirers of the next. Cyprus has begun to assemble both the imported founders who chose the island for their reasons, and an emergent community of founders starting from here. The international scaleups, over a longer horizon, will themselves seed new local founders. The reaction is starting. The elements are in the room. The catalyst has, finally, been added. What we do not yet know is how long it will take for the reaction to sustain itself and to produce something we will remember. *Demetrios Zoppos is a Partner at 33East. The views expressed are exclusively his own. 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