Nearly 3 out of 4 firms in Singapore have not adopted AI: MOM survey
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Larger companies show higher adoption rates, with 76.4 per cent of firms that have more than 500 employees having adopted AI.
ST PHOTO: LIM YAOHUI
SINGAPORE – Around 70 per cent of firms in Singapore have not adopted AI in their operations, despite the nation being one of the most digitally competitive economies globally.
Larger companies show higher adoption rates, with 76.4 per cent of firms that have more than 500 employees having adopted AI. In comparison, just 23.9 per cent of firms with fewer than 25 employees use AI.
These were among the findings of the Ministry of Manpower’s inaugural survey on the extent of AI adoption among firms and its implications on the workforce, published on April 30.
The survey was conducted between January and March, and had garnered responses from 2,560 firms that collectively employ close to 500,000 workers.
The findings show that the AI adoption rate among firms in Singapore trails that of other digitally competitive countries such as Denmark, Finland and Sweden.
China has emerged as a frontrunner in AI adoption, with nearly half of its firms having adopted AI for work.
Among the 28.5 per cent of firms in Singapore that have begun using AI, most remain at the planning or piloting stages, while only 3.8 per cent have begun integrating AI into core processes.
Larger firms also showed deeper levels of AI integration than smaller firms.
“Larger firms are also more likely to possess the digital infrastructure and organisational capabilities needed to integrate AI into existing workflows,” said MOM in its findings.
High implementation costs and lack of in-house expertise are among firms’ most commonly cited barriers to AI adoption, said MOM. Smaller firms also face other challenges such as lack of strategy and low trust in AI, while larger firms face challenges with integration complexity and data security concerns.
Sectors that have the highest rate of AI adoption are those that are digitally intensive and knowledge-based, such as information and communications at 74.1 per cent, professional services at 57.5 per cent, and financial and insurance services at 56.4 per cent.
These sectors are characterised by jobs with a higher share of tasks that can be automated or augmented by AI, such as in the areas of software development, systems analysis and data analytics, said MOM.
Among firms that use AI, 70.7 per cent have reported improvements in worker productivity, and 13.3 per cent have made gains in decision-making.
Overall, firm-level adoption remains limited and uneven, despite Singapore’s strong digital readiness.
“The findings show that AI adoption is still at an early stage of diffusion,” said the ministry.
It added that early evidence suggests that AI is complementing, rather than displacing labour.
“There is no indication of widespread displacement,” said MOM, citing how 6.2 per cent of firms have reported reduced headcount.
“Instead, firms are redesigning roles (18.9%) and creating new AI-related jobs (13.9%), indicating that AI is primarily transforming tasks rather than replacing roles.”
AI is reshaping work and creating opportunities to improve productivity, said MOM.
It added: “The key challenge is whether firms and workers can keep pace: smaller firms risk falling further behind on adoption, while workers who do not upskill risk being left behind as AI transforms our day-to-day tasks.”
