Recent data from the Infocomm Media Development Authority (IMDA) reveals a significant acceleration in technology adoption across Singapore’s business landscape. According to the latest Singapore Digital Economy Report, the country’s digital economy reached $144.1 billion in 2025, increasing its contribution to the nation’s Gross Domestic Product (GDP) to 19.3%. Furthermore, the use of artificial intelligence (AI) within enterprises saw a marked rise, confirming the deep integration of digital tools into daily operations.
Growth in AI Adoption and Digital Sector Contribution
The report, released on October 5, details how AI penetration among all businesses climbed from 14.7% in 2024 to 23.5% in 2025. This increased usage was observed across both small- and medium-sized enterprises (SMEs), whose adoption rate rose from 14.5% to 23.4%. Meanwhile, larger corporations showed strong growth, with AI adoption jumping from 62.5% to 70.4% during the same period.
The overall digital economy expanded substantially, growing from $136.5 billion in 2024 to $144.1 billion in 2025. IMDA noted that this growth demonstrates how digital technologies are fundamentally reshaping operations across diverse industries and changing how employees perform their jobs.
The calculation of the digital economy encompasses two elements: the economic value derived from the information and communications sector (such as telecommunications, computing, and software services), and the added value generated by non-tech industries through the adoption of digital solutions.
Within these components, non-tech industries represented the largest segment, achieving a value of $97 billion in 2025, marking a 3.6% increase from the previous year. The technology sector itself expanded by 6.1%, reaching $47.1 billion.
Workforce Trends and Tech Talent Demand
The employment landscape reflected this digital shift. Tech employment grew by 3.8% year-over-year, reaching 222,200 people in 2025 (up from 214,000 in 2024). The fastest-growing job roles were concentrated in AI, data, and cybersecurity. Interestingly, the growth in tech employment was primarily driven by non-tech sectors, which saw an increase of 5.3%, compared to 1.8% growth within the tech sector.
Wage expectations also point to the high value of tech skills. In 2025, the median monthly salary for tech workers was $8,000, which was 60% higher than the overall median salary for all resident workers, which stood at $5,000. (For comparison, in 2024, the median wages were $7,950 for tech workers and $4,860 for all workers).
Adoption Gap and Upskilling Initiatives
While digitalization remains widespread, there are clear areas for development. In 2025, 96.4% of all businesses utilized at least one of six defined digital areas: cybersecurity, cloud technologies, e-payments, e-commerce, data analytics, and AI, a slight increase from 95.1% in 2024.
Furthermore, the number of businesses planning to adopt AI increased dramatically, doubling from 5.6% in 2023 to 12.1% in 2025. For those already using AI, approximately two in five are moving beyond simple experimentation and integrating the technology broadly into their operations.
On the worker side, AI use is accelerating. Nearly 86% of workers reported using AI at work in 2026, an increase from 78% the previous year. The most common uses cited by employees included generating content (used by almost 77% of users), automating processes (64%), and engaging with people (54%).
Despite these gains, a gap exists in worker preparedness. While 68% of workers recognize the need to enhance their skills or retrain in AI, only 37% had received AI-related training within the preceding 12 months. Common barriers cited by workers included not being nominated by their employers (35%) or simply lacking time.
In response to these findings, IMDA is expanding its National AI Impact Programme to upskill a total of 140,000 tech and non-tech professionals by 2029. The program is designed to train 40,000 tech professionals over the next three years in advanced AI skills, including agentic AI. Additionally, it will train 100,000 non-tech professionals by 2029 in domain-specific AI skills, areas such as law and accountancy.
Industry experts emphasized the challenges ahead. Ang Yuit, president of the Association of Small and Medium Enterprises, stated that AI adoption remains inconsistent among SMEs, citing difficulties in securing the necessary time, budget, and manpower for process automation. Meanwhile, OCBC chief economist Selena Ling cautioned that the benefits of the digital economy might not be distributed equally across the workforce, suggesting that workers in lagging sectors could face stagnation or job displacement without focused government intervention.
