From 2018 to 2023, Singapore’s digital economy grew at a compound annual growth rate (CAGR) of over 11 percent, according to the second Singapore Digital Economy Report developed by the Infocomm Media Development Authority (IMDA).
This is nearly double the nominal GDP growth rate for the entire economy.
Over 9 in 10 SMEs have adopted digital in areas including cybersecurity, cloud, e-payment, e-commerce, data analytics, and AI
These companies also use digital tools to improve core business operations.
Almost 82 percent of small and medium enterpeises (SMEs) employ digital solutions for general functions including accounting, document management, and digital marketing.
IMDA supports SMEs through initiatives including CTO-as-a-Service, Industry Digital Plans (IDPs), and the Productivity Solutions Grant (PSG), which offers access to over 400 pre-approved digital solutions
In addition, the PSG offers financial support for approximately 400 pre-approved digital solutions, 20 percent of which are AI-enabled.
This allows SMEs to offset some of the upfront costs.
Larger enterprises are also actively seeking digital transformation, turning to initiatives like IMDA’s Digital Leaders Programme to strengthen tech capabilities.
Rise in AI adoption
Artificial intelligence is a growth driver for Singapore’s digital economy, especially among larger companies.
In 2023, 44 percent of larger enterprises used AI solutions, up from nearly 17 percent in 2018.
To support AI integration, IMDA launched the GenAI Sandbox, a platform that allows businesses to test and implement generative AI applications.
Around 150 SMEs participated in the first sandbox phase, using AI for marketing, sales, and customer engagement, with 80 percent continuing use beyond the initial pilot.
On the talent front, Singapore is expanding its tech workforce through initiatives that train students and working professionals.
IMDA’s TechSkills Accelerator (TeSA) programme has trained over 243,000 individuals in tech domains including AI and 5G since 2016.
AI-related courses are integrated into education and training programs.
AI safety is also a core focus of Singapore’s digital framework.
Since 2019, IMDA has implemented a Model AI Governance Framework, recently updated to incorporate Generative AI.
International collaboration in AI governance includes partnerships with countries like Rwanda, aimed at co-developing frameworks for AI implementation and best practices.
Through sustained support for SMEs, targeted AI initiatives, talent development, and a focus on responsible AI governance, Singapore aims to drive growth in its digital economy.