Singapore AI adoption rises to 23.5% as digital economy reaches $144.1bn

AI adoption among Singapore businesses rose sharply in 2025, with nearly one in four enterprises using the technology as demand for digital talent continued to grow across industries.

The latest Singapore Digital Economy Report, released by the Infocomm Media Development Authority (IMDA) on October 5, showed that AI adoption among all enterprises increased from 14.7% in 2024 to 23.5% in 2025.

AI adoption among small and medium-sized enterprises (SMEs) rose from 14.5% to 23.4%, while adoption among larger businesses increased from 62.5% to 70.4%.

Tech jobs expand

Tech employment increased 3.8% year on year to 222,200 in 2025, up from 214,000 in 2024, with AI, data and cybersecurity among the fastest-growing areas.

Demand for technology talent was particularly strong outside the technology sector. Tech employment in non-tech industries grew 5.3%, compared with 1.8% growth in the technology sector.

Tech workers also continued to command higher wages. Median monthly pay for tech workers reached $8,000 in 2025, 60% above the overall median of $5,000 for resident workers.

Digital economy grows

Singapore’s digital economy expanded from $136.5 billion in 2024 to $144.1 billion in 2025, with its contribution to GDP rising from 18.8% to 19.3%.

Non-tech industries accounted for the largest share of the digital economy, growing 3.6% to $97 billion. The technology sector expanded 6.1% to $47.1 billion.

IMDA said the steady growth “reflects that digital technologies continue to shape how all enterprises across various industries operate, and how workers do their jobs”.

Digitalisation also remained widespread, with 96.4% of businesses adopting at least one of six digital areas in 2025, up from 95.1% in 2024. These include cybersecurity, cloud technologies, e-payments, e-commerce, data analytics and AI.

AI moves beyond trials

More businesses are preparing to adopt AI. The proportion of enterprises that had not adopted AI but planned to do so within the next 12 months increased from 5.6% in 2023 to 12.1% in 2025.

Among businesses already using AI, two in five were moving from experimentation towards broader implementation across their operations.

Productivity and process improvements were the most widely reported benefits, cited by nearly 88% of AI-using enterprises. Another 44% reported lower costs and better resource optimisation.

Workers report gains

AI adoption is also accelerating among employees. Nearly 86% of workers reported using AI at work in 2026, up from 78% the previous year.

Productivity was the most commonly reported benefit, cited by nearly 73% of AI users, followed by improved work quality at 69% and better problem-solving abilities at 68%.

Around one-third of AI users said they spent less time on tasks, with six in 10 saying they saved up to an hour a day.

Content creation was the most common workplace use of AI, cited by almost 77% of users. Other major uses included process automation at 64%, engaging with people at 54% and data exploration and analytics at 52%.

Skills gap widens

Despite rising AI use, a significant skills gap remains. While 68% of workers said they recognised the need to upskill or reskill in AI, only 37% had undertaken AI-related training in the previous 12 months.

Among workers who had not attended training, 35% said they had not been nominated by their employers.

A similar proportion cited a lack of time, while around one in four were unsure which AI course to take.

“This suggests that clearer signposting and broader support for workers to take up suitable training could help more workers build relevant AI capabilities,” said IMDA.

Government boosts training

IMDA is expanding its National AI Impact Programme to strengthen AI capabilities among both tech and non-tech workers.

The programme will upskill 40,000 technology professionals over the next three years, including advanced AI capabilities and knowledge of agentic AI.

For non-tech workers, the programme aims to train 100,000 professionals by 2029 in AI skills relevant to specific domains. Training is already being rolled out in sectors including accountancy and law.

SMEs face barriers

Association of Small and Medium Enterprises president Ang Yuit said that many SMEs face difficulties in finding the resources needed to determine how work processes can be automated using AI.

“There are not as many specialised talents with strengths and experience in implementing AI for enterprises, compared to more established work functions like social media marketing,” he added.

OCBC chief economist Selena Ling also cautioned that digital economy growth may not benefit workers equally, depending on the industries and skills they are exposed to.

“It depends on whether workers are in growing industries with core digital domains that have a talent shortage, or if workers are in industries that are lagging behind and which may stagnate without government intervention due to structural skills mismatch or job displacements arising from AI and tech automation,” she said.

AI adoption remains uneven among SMEs, with many smaller businesses facing constraints around time, budgets and manpower.