Singapore’s digital economy continued to expand in 2025, reinforcing the country’s position as a leading digital hub in Asia. The latest Singapore Digital Economy Report shows a market that is no longer defined only by technology companies: digital value is being created across the wider economy, as organisations modernise operations, adopt AI, and invest in people with increasingly specialised skills.
The report’s most important message is that Singapore is moving from digital adoption to digital depth. More businesses are using digital tools, AI is moving into everyday workflows, and workers are reporting measurable gains in productivity, quality, and problem-solving.
A Digital Economy Growing Faster Than the Wider Economy
Singapore’s digital economy reached S$144.1 billion in nominal value-added in 2025, up 5.6% year-on-year. That growth outpaced the 3.1% expansion of Singapore’s nominal GDP and lifted the digital economy’s contribution to 19.3% of GDP, compared with 18.8% in 2024.
Information and Communications remains a critical foundation, but the larger story is the value created through digitalisation across non-technology sectors. Finance and insurance, wholesale trade, manufacturing, professional services, and public services are all part of the country’s broader digital transformation.
“Singapore’s digital economy is no longer a specialist sector. It is becoming the operating layer through which the wider economy creates value, improves productivity, and competes globally.”
Digitalisation Is Deepening Across Enterprises
Enterprise digitalisation continued to progress in 2025. Digital adoption reached 96.4% of enterprises, up from 95.1% in 2024, while the average digital adoption intensity rose from 2.3 to 2.5 out of six measured digital areas.
The improvement was broad-based. Small and medium-sized enterprises recorded one of the largest increases in digital intensity, rising from 2.3 to 2.5. That matters because the next phase of Singapore’s digital economy will depend not only on advanced adoption by large companies, but on whether smaller firms can translate digital tools into stronger everyday operations.
AI Adoption Has Entered the Mainstream
AI adoption among Singapore enterprises increased sharply in 2025. Across all enterprises, adoption rose from 14.7% in 2024 to 23.5%. Among enterprises with at least ten employees, adoption reached 34.6% — placing Singapore above the OECD average in the report’s international comparison.
Adoption is also becoming more practical. Most AI-adopting firms reported using commercial off-the-shelf tools, while others used customised commercial tools or solutions developed in-house. This suggests that businesses are choosing a mixture of speed, flexibility, and control depending on their data, workflows, and risk requirements.
AI adoption is producing measurable business benefits
The most frequently reported benefit was improved productivity and processes, cited by 87.6% of AI-adopting firms. Cost reduction and resource optimisation followed at 44.0%. Other reported gains included customer retention, new customer acquisition, and revenue contribution.
However, the report also shows that adoption is not automatic. Among firms that had not adopted AI, the main barriers included a perceived lack of need, insufficient budget or investment, infrastructure readiness, limited skills, and poor awareness of the technology. For many businesses, the challenge is now less about access to AI and more about identifying a valuable, safe, and repeatable first use case.
Workers Are Already Using AI at Work
AI is not only an enterprise technology story. It is already part of everyday work for a growing majority of surveyed workers in Singapore. AI usage rose to 85.7% in 2026, up from 77.6% the year before, with most users working with AI daily or weekly.
Workers reported using AI across content creation, process automation, engagement with people, data exploration, analytics, and research. The most common individual task was generating or editing written content, followed by document processing, data extraction, research, translation, and workflow automation.
These benefits point to an important shift in how AI should be evaluated. The value is not limited to automating tasks or reducing headcount. AI can help workers spend more time on higher-value work, solve problems more effectively, and build capability faster — provided they have the confidence and guidance to use it responsibly.
The Skills Gap Is Becoming More Specific
Singapore’s technology workforce continued to grow, reaching 222,200 professionals in 2025, up from 214,000 in 2024. Tech professionals accounted for 5.4% of total employment, with growth supported by both information and communications and non-technology sectors.
Demand is also becoming more specialised. The share of tech job postings requiring at least one AI skill increased from 14.0% in 2024 to 16.7% in 2025. The share requiring at least two AI skills rose from 4.9% to 7.6%.
This is a signal for employers entering or expanding in Singapore: demand is not simply for generic software capacity. Organisations increasingly need people who can connect AI to data, products, cybersecurity, operations, and measurable business outcomes.
| Report signal | What it means for organisations |
|---|---|
| Digital economy at 19.3% of GDP | Digital capability is central to Singapore’s wider economic competitiveness. |
| 96.4% enterprise adoption | Digital tools are becoming a baseline expectation, not a differentiator by themselves. |
| 23.5% AI adoption across all enterprises | The market is moving from pilots toward repeatable, operational AI use cases. |
| 85.7% worker AI usage | Workforce enablement and responsible-use practices are now strategic priorities. |
| 16.7% of tech postings require an AI skill | Hiring, reskilling, and specialist partnerships must evolve with demand. |
What This Means for Companies Expanding into Singapore
For international companies, Singapore offers more than a sophisticated technology market. It provides a digitally mature operating environment in which regional products, services, and teams can be tested and scaled.
- Use Singapore as a regional launchpad: the country’s digital infrastructure and enterprise environment support regional experimentation and expansion.
- Build for AI-enabled workflows: AI is becoming part of how teams work, so products and services should be designed with practical augmentation in mind.
- Plan for specialist talent: demand is increasing for people who combine engineering, data, AI, cybersecurity, and commercial understanding.
- Support SMEs and partners: supply-chain and channel success will increasingly depend on the digital readiness of smaller organisations.
- Make adoption measurable: the strongest digital programmes connect technology investment to productivity, quality, cost, customer, or revenue outcomes.
Conclusion: A More Capable, More Connected Economy
Singapore’s digital economy is entering a more mature phase. Growth is continuing, but the defining change is the spread of digital capability across the economy: enterprises are deepening adoption, AI is producing tangible benefits, workers are using AI at scale, and technology roles are demanding more specialised skills.
The opportunity for companies is to move beyond simply becoming digital. The next advantage will come from building organisations that are digitally intelligent — able to combine technology, data, people, and trusted partnerships into better products and faster decisions.
Precision Consulting Asia helps companies establish and grow in Singapore and across ASEAN. From identifying local technology partners to building specialist teams and shaping a practical market-entry plan, we help turn regional opportunity into operational progress.
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