Singapore’s digital economy grows to S$144.1 billion as AI adoption accelerates
Nearly one in four Singapore businesses adopted AI in 2025, up from about one in seven a year earlier, according to the Singapore Digital Economy Report.
The digital economy accounted for 19.3 per cent of Singapore’s gross domestic product in 2025, according to the Infocomm Media Development Authority’s Singapore Digital Economy Report. (File photo: iStock)
New: You can now listen to articles.
This audio is generated by an AI tool.
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
SINGAPORE: Singapore’s digital economy grew to S$144.1 billion (US$112.4 billion) in 2025, outpacing growth in the broader economy, while artificial intelligence (AI) adoption accelerated.
The digital economy accounted for 19.3 per cent of Singapore’s gross domestic product (GDP), up from 18.8 per cent or S$136.5 billion in 2024, Infocomm Media Development Authority (IMDA)’s said in its Singapore Digital Economy Report released on Monday (Oct 5).
This represented a year-on-year growth of 5.6 per cent, outpacing the nominal GDP year-on-year growth of 3.1 per cent in 2025.
Non-information and communications (I&C) sectors remained the dominant growth driver, making up more than two-thirds of the digital economy, said IMDA. The nominal value-added from digitalisation in these sectors grew 3.6 per cent year-on-year to S$97 billion.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Meanwhile, the I&C sector grew 6.1 per cent year-on-year to S$47.1 billion in 2025.
This expansion in both I&C and non-I&C sectors is reflected in tech employment – which grew 3.8 per cent year-on-year to 222,200 in 2025 – with roles in AI, data and cybersecurity among the fastest-growing.
Demand for tech talent is also concentrated outside the tech industry, with tech employment growth led by non-I&C sectors at 5.3 per cent, compared with 1.8 per cent in the I&C sector, said IMDA.
AI adoption has also expanded as Singapore pushes to make AI accessible and practical for enterprises, added IMDA.
AI ADOPTION
AI adoption sustained its growth momentum in 2025, said IMDA, with the adoption rate among all enterprises rising from 14.7 per cent in 2024 to 23.5 per cent in 2025.
AI adoption among small and medium enterprises (SMEs) rose from 14.5 per cent in 2024 to 23.4 per cent in 2025, while that of large local enterprises increased from 62.5 per cent to 70.4 per cent, according to the report.
The proportion of enterprises that have not adopted AI but plan to do so in the next 12 months has risen from 5.6 per cent in 2023 to 12.1 per cent in 2025.
IMDA noted that AI-adopting enterprises deploy AI differently according to their resources and needs, with almost nine in ten using commercial off-the-shelf AI tools such as ChatGPT, Claude, Gemini or Microsoft Copilot.
Meanwhile, 28.3 per cent of these enterprises customise AI tools to suit their needs, such as AI agents developed using Claude Cowork or Google AI Studio.
Notably, two in five AI-adopting enterprises are expanding deployment of AI or have fully deployed or integrated the technology across their operations.
IMDA added that AI adoption continues to deliver tangible business outcomes, with 87.6 per cent of AI-adopting enterprises citing productivity and process improvement as a key benefit, while 44 per cent reported cost reduction and resource optimisation.
In addition, SMEs that adopted AI-enabled digital solutions via the Productivity Solutions Grant reported average cost savings of 49.5 per cent in 2025.
In terms of AI adoption rates among economies in the Organisation for Economic Co-operation and Development (OECD), Singapore’s rate among enterprises with 10 or more staff was 34.6 per cent in 2025, well above the average of 20.3 per cent, said IMDA.
WORKERS USING AI
At the same time, more workers in Singapore are integrating AI into their work, with 86 per cent using the technology at work in 2026, up from 78 per cent in 2025.
Of these workers, 73 per cent reported productivity improvements, 69 per cent cited better work quality and 68 per cent noted stronger problem-solving capabilities.
Among those who reported time savings as a benefit, about six in ten said they saved up to one hour a day, freeing up time for other work.
Workers are also using AI for a wide variety of workplace tasks, with content creation the most common use case at 77 per cent, followed by process automation, then data exploration and analytics.
However, despite strong AI usage at work, “a gap remains between workers’ ambitions and their access to training”, said IMDA.
It found that about 68 per cent of workers recognised the need to upskill or reskill in AI, but only 37 per cent attended AI-related training in the past 12 months.
Of those who did not go for training, around 35 per cent said they were not nominated by their employers. A similar proportion of workers said they lacked the time, and about one in four were unsure of the right 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.
To support workers, IMDA said it is expanding the TechSkills Accelerator under the National AI Impact Programme (NAIIP) to improve AI capabilities across the tech sector and the wider workforce.
The accelerator will upskill 40,000 tech professionals over the next three years to equip them with advanced AI skills.
For the non-tech workforce, the NAIIP will train 100,000 professionals in domain-specific AI skills by 2029, with such training already underway in the accountancy and law sectors.
“Singapore’s digital economy continues to demonstrate encouraging growth as both enterprises and workers embrace new solutions in their digital transformation journeys,” said IMDA chief executive Ng Cher Pong.
He added that IMDA will continue investing in continuous learning in practical, domain-specific AI skills to ensure Singapore’s workforce remains competitive.
TECH JOBS & WAGES
Demand for tech professionals in Singapore also rose in 2025 as the economy continues to digitalise, with tech roles relating to AI, data and cybersecurity among the fastest-growing tech occupations, said IMDA.
The number of tech workers increased by 3.8 per cent year-on-year, from 214,000 in 2024 to 222,200 in 2025. This is higher than the 2.7 per cent year-on-year growth registered in 2024.
Meanwhile, tech jobs continue to offer strong wage outcomes, with the median monthly wage for resident tech workers at S$8,000 in 2025, higher than the overall resident median of S$5,000.
“This suggests that tech roles continue to provide strong wage outcomes, supported by sustained demand for tech professionals across both the I&C and non-I&C sectors,” IMDA said in its report.
Source: CNA/dy(rj)
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
