Singapore’s Digital Economy remains robust

1. Singapore’s digital economy continued its strong contribution in 2023, accounting for S$113 billion of the nation’s Gross Domestic Product (GDP) according to the second Singapore Digital Economy Report (4.34MB) developed by the Infocomm Media Development Authority (IMDA).

2. Maintaining a 17.7% share of the GDP, the digital economy now accounts for approximately S$1 out of every S$6 in the economy. From 2018 – 2023, the digital economy grew at a healthy compound annual growth rate (CAGR) of 11.2%, nearly double the nominal GDP growth rate of 5.8% for the entire economy.

3. The Information & Communications (I&C) sector, which forms the vertical pillar of the digital economy, accounted for around one-third of Digital Economy. The remaining two-thirds stemmed from the horizontal impact of digitalisation across other non-I&C sectors, underscoring the broad-based contribution of digital technologies to Singapore’s economy.

Strong Tech Adoption Among SMEs

4. More than 9 in 10 SMEs (94.6%) have adopted digital in at least one of the six key digital areas examined such as Cybersecurity, Cloud, E-payment, E-commerce, Data Analytics and AI, reflecting a 0.5 percentage point increase from 2022.

5. Not only are SMEs adopting digital, but they are also deepening adoption:

• 82% of SMEs have used at least one digital solution to enhance general business functions up from 69% in 2021. The general business functions that are most commonly digitised include Accounting, Document Management and Digital Marketing.
• In terms of digital solutions that support specific sector needs¹, 85% of SMEs adopted at least one sector-specific digital solution in 2023, up from 61% in 2021.
• Digitalisation is bringing positive impact to the enterprises. SMEs that adopted digital solutions under the Productivity Solutions Grant (PSG) have declared cost savings of around 50% on average during the period of 2018 to 2023.

6. To further drive this momentum, IMDA is committed to advancing SMEs’ digital transformation through our initiatives, enabling them to harness the benefits of digitalisation. For example:

• SMEs can access digitalisation resources (including about 400 pre-approved digital solutions) via IMDA’s CTO-as-a-Service (CTOaaS) platform. To-date, over 145,000 users have accessed the platform for their needs.
• The digital solutions curated for the broad base of SMEs are guided by 22 Industry Digital Plans (IDPs) that set out sector-specific digital solutions relevant for businesses at each stage of their growth.

7. We are also seeing increased interest from digitally mature enterprises, participating in our Digital Leaders Programme (DLP) to build their digital capabilities and leverage tech to innovate and transform. One such enterprise is Markono, a book printing company which used technology to increase its product offerings (refer to Annex 1 for more details).

8. For enterprises needing bespoke digital solutions, they can tap on the Open Innovation Platform (OIP) for an effective and expedient manner of tapping on more than 13,000 technology solution providers to address their business issues. To-date, more than 300 challenges have been launched by enterprises. Yue Hwa Chinese Products faced significant challenges with staff scheduling, leading to inconsistent work schedules and declining employee morale. Through the IMDA Open Innovation Platform, they partnered with Synapsify to implement an AI-driven rostering system to improve workforce efficiency and positive work culture (refer to Annex 2 for more details).

AI at the Forefront

9. The adoption rate of AI is on the rise, led by non-SMEs. In 2023, 44% of larger enterprises implemented AI-enabled solutions, more than double the 16.7% in 2018. SMEs also improved their adoption rate, growing from 3.5% in 2018 to 4.2% in 2023.

10. IMDA will continue to support enterprises including SMEs in adopting AI for their business needs as follows:

• For most SMEs, they can adopt the AI-enabled pre-approved solutions on CTOaaS platform. Currently, around 20% of the pre-approved solutions on the platform are AI-enabled. IMDA will work towards raising the AI capabilities of these pre-approved digital solution providers, so that more pre-approved solutions are AI-enabled where feasible. Our aim is to enable 15,000 more SMEs to benefit from AI-enabled solutions within the next 2 years.
• For SMEs which wish to explore GenAI-enabled solutions before they invest in deploying these solutions across their organisations, IMDA has GenAI Sandbox for SMEs to experiment with pre-qualified GenAI-enabled solutions. Within the 3-month period of the first GenAI Sandbox, 150 SMEs participated in areas such as marketing, sales, and customer engagement. 80% found the solutions fitting and continued to use the solutions after the 3-month period. For example, Crestar Fan boosted sales and efficiency with GenAI-powered chatbot solutions (refer to Annex 3 for more details).
• For digitally mature enterprises that want to go deeper into AI adoption, they can tap on GenAI x Digital Leaders initiative where they can go through GenAI tech discovery with tech giants Microsoft and AWS. There, these SMEs can develop and implement GenAI solutions customised to meet their specific needs with tech advisory from these tech leaders and their tech partners. It is estimated that around 200 companies will benefit from GenAI for Digital Leaders programme by March 2025.
• SME can also tap on the OIP for bespoke AI solutions. The platform is seeing more participation for non-I&C sectors. More than half of the 55 innovation challenges under OIP were AI-related in the past year, compared to 25% (13 out of 52) the year before.

11. To further support enterprises in gaining hands-on experience with Generative AI solutions, we are launching in December 2024 GenAI Sandbox 2.0, an enhanced platform that will enable businesses to experiment with and integrate generative AI technologies more effectively. This builds on the success of the first iteration of the Sandbox and will support new solutions under Marketing & Sales and Customer Engagement, and a new solution category of HR Operations (refer to GenAI Sandbox 2.0 factsheet for more details).

Tech Talent Driving the Digital Economy

12. In spite of a more cautious hiring outlook in the tech sector globally and in Singapore, the demand for tech talent remains strong. In 2023, tech jobs grew to 208,300, representing a steady 3.4% year-on-year growth and accounting for over 5% of total employment. These roles offer competitive salaries and career opportunities, with resident tech professionals earning a median monthly salary of 1.5 times the overall resident workforce median monthly salary.

13. To ensure that our Singaporean talent is well-equipped with in-demand skills to seize these job opportunities, IMDA has put in place programmes to build a globally competitive local core. For example:

• For pre-employment training: to increase quantity and quality of future tech workforce, and equip ITE and Polytechnic students with necessary tech skills
  • 1 in 5 of local university intake for Information and Digital Technologies courses.
  • TeSA for ITE and Polytechnics (TIP) Alliance: Participation in the year-long enhanced internship has doubled to 1,300 students.
  • We will increase our AI-focused SG Digital Scholarship to 100 over the next three years.
• For continuing education and training: to enable working professionals to acquire in-demand digital skills via Place and Train and upskilling programmes
  • TechSkills Accelerator (TeSA): Since 2016, TeSA has placed and trained more than 18,000 locals in in-demand tech domains such as AI and analytics, 5G mobile technology, etc, and upskilled 243,000 individuals in tech.
  • I&C Jobs Transformation Map: Since August 2023, IMDA has curated about 200 AI-related courses and trained nearly 5,000 tech workers from 800 companies.
  • We will expand and extend TeSA with organisations that are scaling AI practitioner teams and building AI Centres of Excellence.

14. These initiatives are not only creating a robust pipeline of talent but also empowering individuals to carve their own unique paths in the tech industry. Royce Lua’s journey is a prime example of how Singaporean talent are transitioning into high-demand fields such as AI (refer to Annex 4 for more details).

Ensuring Safe and Responsible AI Usage

15. IMDA is committed to fostering a trusted ecosystem for the safe and responsible use of AI and Gen AI. Since 2019, we have established AI governance frameworks, including the recently launched Model AI Governance Framework for Gen AI, which balances innovation with safety.

16. We will continue to engage and collaborate with stakeholders, from policymakers to the public, to address AI challenges collectively. Our toolkits like AI Verify and Project Moonshot provide practical testing frameworks aligned with international standards, ensuring responsible AI implementation.

17. We are also actively engaging in international efforts to build capacity in AI governance across regional and international jurisdictions. With the establishment of Singapore’s AI Safety Institute, we aim to integrate scientific insights into our governance efforts and collaborate with global partners. We also worked with Rwanda to co-develop the world’s first “AI Playbook for Small States” designed to share best practices on implementation of AI strategies and policies.

Architecting Singapore’s Digital Future

18. Singapore’s digital economy is poised for further transformation and growth and IMDA’s role in shaping this digital future is more critical than ever. IMDA is committed to shaping a strong, secure and sustainable digital economy for our nation, in partnership with industry, workers, research institutions and other public sector agencies.

Resources:

• Annex 1: Markono: Transforming from Print to Supply Chain Powerhouse in Asia (94.34KB)
• Annex 2: Revolutionising Employee Satisfaction: Yue Hwa's AI-Driven Rostering Solution (46.17KB)
• Annex 3: How Crestar Fan Supercharged Sales and Efficiency with GenAI-Powered Chatbot Solutions (46.79KB)
• Annex 4: From Stretch Therapist to Generative AI Engineer: Royce’s Inspiring Career Transformation (121.85KB)