Singapore trails China and Hong Kong in firm-level AI

High implementation costs and a lack of in-house talent keep 71% of local firms on the sidelines.

The majority of companies have yet to adopt artificial intelligence (AI) in their organisations, despite Singapore’s strong national emphasis on its use.

According to the Ministry of Manpower’s (MOM) “Adoption of Artificial Intelligence Among Firms” report, 71.5% of companies said they have not begun adopting AI in their operations.

Despite being one of the world's most digitally competitive economies, Singapore lags behind peers on firm-level AI adoption. At 28.5%, Singapore trails China (47.5%), Hong Kong (41.0%), Denmark and Finland in the proportion of firms that have adopted AI.

“Amongst the 28.5% that have adopted AI, the depth of use remains shallow, with only 3.8% of firms reporting that AI has been integrated into their core business processes,” the report read.

The ministry said this distribution suggests that AI adoption in Singapore is still in the early phase of diffusion. Data shows a large concentration of firms at the non-adoption stage and only a small minority achieving meaningful integration.

“The persistence of this gap points to structural barriers rather than a lack of interest for AI adoption. Firms frequently cite high implementation costs (44.9%) and the lack of in-house capabilities (42.4%) as key constraints,” the report said.

A separate report by Accenture also pointed out a gap between AI investment and technology, with 46% of companies saying they have yet to redesign their job roles or responsibilities.

Accenture said this gap “creates a specific and costly situation: AI tools exist, but the organisation has not updated its operating model, decision rights, incentives, risk controls, performance measures and career pathways to support new ways of working.”

Prime Minister Lawrence Wong has said in his Budget Speech in February that Singapore would focus on building industry clusters powered by AI, linking companies across sectors to develop technologies that could compete globally.

Experts said this signals a shift in economic strategy, with the government betting on AI and industry collaboration to drive growth.

“AI adoption is beginning to reshape job roles and work processes. Rather than displacing workers, firms are redesigning jobs, augmenting tasks and creating new AI-related roles,” rhe ministry said, adding that this points to the need for workers to adapt to evolving job requirements.

“Ensuring that AI adoption is broad-based and that workers are equipped to adapt will be critical to maximising its benefits while mitigating the risk of widening gaps across firms and the workforce,” it added.