Cypriot business digital transition lags behind EU benchmarks

Cypriot businesses face a significant lag in digital adoption, with only 9.3% currently using artificial intelligence compared to the 20% EU average, according to the Cyprus Fiscal Council’s interim report. Productivity also remains at 80% of the European average. Disparities are evident across company sizes: small businesses report 7.7% AI usage, medium-sized businesses 15.3%, and large enterprises 35.1%, all trailing significantly behind EU benchmarks of 17%, 30.4%, and 55% respectively.

Industry experts emphasize that technical adoption requires structural changes. Kyriaki Parmakki, CEO of Limassol-based essere.ai, noted during a ClickUp event on October 8 that companies must prioritize data organization, policy establishment, and employee training before deployment. While 44% of individuals in Cyprus used generative AI in 2025—exceeding the 33% EU average—this individual willingness is not reflected in corporate operations.

To address this gap, the Fiscal Council suggests that training is insufficient on its own. The report calls for specific incentives for technology investment, the removal of barriers for small businesses, and the modernization of existing business models to improve overall competitiveness in the European economy.