Singapore businesses adopt AI with selective implementation: report

Over two-thirds of firms in Singapore report some level of automation, though most have only automated up to 25% of their processes.

Singapore’s businesses are advancing steadily into a digital-first future, embracing automation, AI, and e-commerce—but with a measured, pragmatic approach.

A new regional survey released ahead of the IPS-SBF Global City Conference shows that while most firms have begun their digital transformation, few have gone all-in.

Over two-thirds of firms in Singapore report some level of automation, though most have only automated up to 25% of their processes. Still, nearly 64% plan to increase automation over the next three years, aiming for improved efficiency without significant job loss.

Advanced technologies are gaining traction. About 21% of Singapore firms have adopted industrial robots, and 19% are using AI or machine learning—among the highest rates in Southeast Asia. Yet, these tools are deployed selectively and strategically.

Most firms expect automation to boost productivity by 7.5–10%, and 67% anticipate no change or even growth in employment, signaling confidence in human-technology integration.

Singapore’s digital business landscape is also maturing. Online channels are deeply embedded in firm operations, with 13.7% of companies reporting that all their sales happen online—the highest share in the region.

Another 80% conduct between 25% and 49% of their sales online. Online advertising, digital procurement, and shipment tracking are widely used. Only 10% of firms say they don’t operate online at all.

Firms are also navigating a complex digital regulatory environment with relative ease. Singapore-based businesses report higher exposure to policies around data privacy, cybersecurity, and intellectual property than their ASEAN peers.

These policies are generally viewed as neutral or beneficial, though SMEs in particular still seek more support to adapt. Government grants and training remain critical in helping firms meet compliance requirements and scale up digital capabilities.

Despite progress in digitalisation, other areas remain uneven. On sustainability, firms respond primarily to customer expectations and regulatory mandates. Civil society pressure has limited influence.

Most prefer internal solutions—like manager training and process reform—over hiring dedicated environmental staff. Investments tend to increase only when tied to client demand, highlighting a need for stronger incentives or shared sustainability infrastructure.

On trade, Singapore remains highly internationalised, with nearly 70% of firms reporting foreign ownership and 66% operating foreign subsidiaries. Yet, businesses still face hurdles expanding overseas, particularly around regulatory complexity, cost, and underutilisation of trade agreements.

Many firms report confusion around Rules of Origin and limited applicable FTAs, calling for more targeted government guidance and expanded agreement coverage.