SINGAPORE – The integration of artificial intelligence (AI) into businesses across Singapore is on the rise. By 2025, over 20% of enterprises are projected to use AI technology, reflecting the rapid digital transformation of the nation’s economy, which has now reached over $144 billion.
Growth in AI Adoption
According to the latest Singapore Digital Economy Report released by the Infocomm Media Development Authority (IMDA) on October 5, AI adoption increased significantly from 14.7% in 2024 to 23.5% in 2025. This trend is especially pronounced among small and medium-sized enterprises (SMEs), where usage rose from 14.5% to 23.4%. Meanwhile, larger enterprises saw an increase from 62.5% to 70.4% during the same timeframe.
Impact on the Digital Economy
The digital economy’s contribution to Singapore’s gross domestic product (GDP) has similarly expanded, climbing from 18.8% in 2024 to 19.3% in 2025. The total digital economy value grew from $136.5 billion to $144.1 billion, with crucial advancements in technology sectors leading the charge.
Non-technology industries now account for the majority share of this growth, increasing from $93.6 billion to $97 billion. Meanwhile, the tech sector itself grew by 6.1% to $47.1 billion.
Expanding Tech Workforce
As a result of this digital growth, the tech job market is also experiencing a boost. Employment in tech positions increased by 3.8%, reaching 222,200 jobs in 2025, up from 214,000 the previous year. Notably, the highest demand is for roles related to AI, data, and cybersecurity, with tech wages remaining competitive. The median monthly salary for tech workers was reported at $8,000, significantly higher than the overall median of $5,000.
Future Plans and Employee Benefits
Looking ahead, many businesses are eager to adopt AI. The proportion of enterprises planning to implement AI within a year has surged from 5.6% in 2023 to 12.1% in 2025. Moreover, among those currently utilizing AI, 40% are transitioning from trial phases to more extensive integration in their operations.
Firms that have adopted AI report substantial benefits, primarily in terms of productivity and operational efficiency. Nearly 88% acknowledged enhanced productivity, while 44% noted reduced costs and optimized resources.
“Digital technologies continue to reshape how enterprises operate across various industries,” said IMDA.
Employee Engagement with AI
On the employee front, the use of AI is also gaining traction, with approximately 86% of workers utilizing AI tools in their roles by 2026, a rise from 78% the year prior. A significant 73% of these users benefit from increased productivity. Other advantages include improved work quality and enhanced problem-solving abilities.
Common applications among workers involve content creation (77%), automating processes (64%), and data analytics (52%). However, there remains a noticeable gap in training, with only 37% of workers who recognized the need for AI upskilling undergoing relevant training in the last year. Many cited lack of employer support or uncertainties regarding the right training as obstacles.
Strengthening AI Skills Among Workers
In response to this skills gap, IMDA is enhancing its National AI Impact Programme, targeting both tech and non-tech workers. The initiative aims to upskill 40,000 tech professionals and train 100,000 non-tech workers by 2029. Efforts are already underway in sectors such as law and accounting to prepare individuals for AI integration.
Despite the potential benefits of AI, challenges remain, particularly for SMEs. The president of the Association of Small and Medium Enterprises, Ang Yuit, noted that smaller businesses often struggle to find the resources and expertise necessary for effective AI implementation.
As the digital economy evolves, economists, such as OCBC's Selena Ling, caution that the advantages of growth may not be evenly distributed across the workforce. Attention to structural skill mismatches and support for affected industries will be essential to ensure that all workers benefit from Singapore’s expanding digital landscape.
