Singapore’s digital economy continued to strengthen in 2024, reaffirming its role as a key pillar of national growth. According to the Singapore Digital Economy Report 2025, the country’s digital sector not only grew faster than the overall economy but also showed deeper integration of artificial intelligence (AI) across enterprises and the workforce.

In 2024, Singapore’s digital economy reached a nominal value added (VA) of S$128.1 billion, contributing 18.6 per cent of gross domestic product (GDP). This marked an increase from 18.0 per cent in 2023, underscoring the steady expansion of digitalisation across industries.

Between 2019 and 2024, the digital economy grew at a compound annual growth rate (CAGR) of 12 per cent, outpacing the overall GDP growth rate of 7.3 per cent during the same period. This sustained momentum illustrates the country’s continued success in harnessing technology as a driver of innovation and competitiveness.

Interestingly, the bulk of digital economic activity came from digitalisation within non-tech sectors. In 2024, digitalisation in industries outside the Information and Communications (I&C) sector accounted for two-thirds of total digital economy value, or 12.6 per cent of GDP.

The Finance and Insurance, Wholesale Trade, and Manufacturing sectors were key contributors to this expansion, reflecting how traditional industries are embedding technology at every level. The I&C sector, meanwhile, accounted for the remaining six per cent of GDP.

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AI adoption reaches new highs

The report highlights a striking surge in AI adoption across both firms and workers in 2024. Among non-small and medium enterprises (non-SMEs), AI adoption jumped from 44.0 per cent in 2023 to 62.5 per cent in 2024. This surge points to a growing confidence in deploying AI for productivity, decision-making, and innovation.

More notably, SME adoption tripled, rising from just 4.2 per cent to 14.5 per cent within a year. This rapid uptake was driven largely by off-the-shelf generative AI (Gen AI) tools, which have lowered the barrier for smaller firms to integrate AI into daily operations.

The Information and Communications and Professional Services sectors led the charge, with adoption rates of 35.9 per cent and 25.7 per cent respectively. Across AI-using firms, the technology was most commonly applied in Information Technology (49 per cent), Customer Service (43 per cent), and Finance and Accounting (40 per cent) functions.

Looking ahead, companies plan to deepen their AI capabilities by investing in workforce training (68 per cent), job redesign (63 per cent), and AI-related infrastructure (59 per cent). These priorities signal a proactive shift from experimentation to long-term capability building.

AI adoption is not limited to organisations. The report found that nearly three in four workers (73.8 per cent) used AI tools in their jobs, with most engaging them daily or several times a week.

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Workers reported leveraging AI for brainstorming and ideation (58 per cent), writing and editing (54 per cent), and administrative tasks (42 per cent). The findings indicate that AI is increasingly used beyond routine automation, supporting both cognitive and creative processes.

The benefits were widespread: 85 per cent of AI users cited improved efficiency, productivity, and work quality. Nearly half (48 per cent) said AI enhanced their creativity, while a third (33 per cent) found it helpful for learning and skill development.

Employers have also played a crucial role in supporting this shift. Around 70 per cent of AI-using employees received organisational backing, primarily through training programmes (62 per cent), access to paid AI tools (42 per cent), and usage guidelines (30 per cent). This structured support has enabled more workers to use AI confidently and responsibly.

As Singapore’s digital economy matures, the findings from the 2025 report reveal a country in transition. One where the benefits of technology are extending beyond tech companies to the wider business community and workforce.

The next phase of growth will depend not just on technology adoption but also on developing a future-ready talent base. With strong emphasis on digital literacy, reskilling, and inclusive access to AI tools, Singapore is positioning itself as a leader in both digital innovation and sustainable economic transformation.

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Image Credit: Zhu Hongzhi on Unsplash

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