Singapore is eyeing making the country as a global leader in artificial intelligence (AI) solutions, and an AI-empowered economy.

According to its Economic Strategy Review (ESR) Committees’ final report released on Wednesday, AI is set to reshape economies the way electricity or the internet did.

“Singapore does not have the scale of larger economies. We need not compete to build the biggest frontier AI model or host the largest AI data centers,

“Instead, we should position Singapore as a trusted hub where AI solutions are developed, tested, and deployed to tackle real-world problems at scale,” said the report.

According to the report, Singapore’s advantage lies in its ability to bring together government, industry and research institutions to channel resources and create the most enabling environment for breakthrough innovation.

Based on the earlier recommendations of the ESR, the government has established the National AI Council (NAIC), with national AI missions across four areas: advanced manufacturing, finance, healthcare and logistics.

In addition, the ESR recommends the following: making Singapore a location of choice for high-impact AI solutions; developing leading firms as “Champions of AI”; accelerating economy-wide AI adoption.

According to the report, the NAIC should work with industry to co-develop ambitious sector-specific problem statements that are well-suited for AI deployment.

“We should marshal critical resources (e.g. datasets and data infrastructure, compute, regulatory sandboxes) to attract leading AI companies and talent to develop and deploy solutions, and move beyond pilots to scale these solutions from Singapore,

“We should also update our rules for AI governance and invest in AI safety capabilities, so that Singapore becomes a trusted environment for responsible AI innovation,” it said.

To unlock meaningful gains, the report opined that AI must be integrated end-to-end across firms’ operations and workforce capabilities.

This requires significant changes to systems, workflows and business models, and carries real implementation risks such as cybersecurity and operational vulnerabilities.

“We should offer tailored support to leading Singapore-based companies to help them undertake full-scale AI transformation, build new capabilities, and manage these risks，

”These companies can then serve as reference models for their industries，” it added.

The report also highlighted that AI adoption must extend beyond leading firms to the wider business base.

It noted that many small and medium-sized enterprises (SMEs) face capability and cost constraints, and lack access to sufficiently large, high-quality datasets to develop AI solutions effectively.

Smaller firms also still find it hard to navigate and access existing government support schemes.

“TACs can play a stronger coordinating role to aggregate demand, pool data where appropriate, and work with AI developers to create shared, sector-level solutions that can be deployed across firms more easily,

“Initial efforts can focus on sectors where there is strong potential for common AI use cases and wider productivity gains,” said the report.

Meanwhile, the ESR also recommend to expand access to growth capital and strengthen support for startups.

According to the report, Singapore’s startup ecosystem has developed significantly over the past decade.

However, companies still find it difficult to secure growth-stage capital.

“To close this gap, we should promote the development of different forms of private capital such as venture debt and private credit, alongside venture capital,

“We should also strengthen the public equities market in Singapore, building on the momentum from the Monetary Authority of Singapore (MAS)’s Equities Market Review, to support promising companies that are ready to list and raise capital,” said the report.

The report also highlighted that the city state should prioritize AI technologies that augment workers.

This means investing in and deploying AI where human capabilities such as judgement, interaction and trust remain central, and where AI can open up new roles and unlock career opportunities that did not previously exist.

It noted that te government should set clear expectations on worker outcomes when it supports companies in adopting AI, including redesigning jobs, investing in training, and improving prospects for workers.

“Where these outcomes are not delivered, the government should review how such support is applied,

“Tripartite partners should also work closely to support, upskill and redeploy workers affected by AI disruption, including through platforms such as the Tripartite Jobs Council,” it added.

The ESR also recommend to closely monitor the impact of AI on workers and adjust policies where needed.

According to the report, the full effects of AI on jobs, wages and the labor market are still unfolding.

“We should therefore continue to monitor developments closely, strengthen our data and foresight capabilities, and be prepared to adapt our interventions as circumstances evolve,

“If AI leads to more severe or broad-based disruption than expected, the Government should consider more structural changes to ensure that the gains from AI are shared fairly across society,” it said.

It also said the benefits of AI cannot accrue only to those with capital. Workers must also benefit through better jobs, stronger wage growth and broader opportunities.

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