The next growth engine

Business Times

a day ago

AS FAR as nation states go, Singapore is relatively young at 60 years old but has achieved a lot in a short timeframe. It has emerged as a regional leader in business, financial services, shipping, air transportation and logistics, developing these advancements within a generation.
As the Republic celebrates its diamond jubilee this year, it is worth having a look at how Singapore proactively leveraged technology to drive its growth and leadership, and how it can continue to do so, especially with the advent of rapid improvements to artificial intelligence (AI).
Singapore's transformation into a digital leader began decades ago with strategic economic planning. Following independence in 1965, the government prioritised industrialisation by focusing on creating a conducive business environment and building a manufacturing base for global export markets, leveraging the country's strategic location as a free port.
However, Singapore's visionary leaders recognised early on that the country faced strategic limitations in terms of its small land area and labour force. They therefore prioritised investing in technology, education and workforce development. This shift paved the way for transitioning into a high-value economy, fuelled by greater value manufacturing, services, finance and innovation.
By the late 1990s, Singapore had repositioned itself as a financial and business hub, supported by world-class telecommunications and logistics, as well as a pro-business environment. These pillars are now enabling the country to take the lead in digital transformation, particularly in AI.
A smart nation built for AI
Singapore's digital economy began to emerge in the early 2000s, but it advanced significantly with the Smart Nation initiative in 2014. This strategy – framed as a whole-of-nation transformation – was focused on the integration of digital technologies into transport, healthcare, urban planning and public services.
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High-speed broadband, nationwide 5G, and advanced cloud infrastructure were all developed as public goods to enable faster growth. These efforts laid the groundwork for practical AI deployment across sectors.
Singapore's more recent AI aspirations are centred around its 2023 National AI Strategy 2.0. This more recent strategy seeks to position the country as a global leader in AI by focusing on five critical areas: innovation, talent, infrastructure, governance and partnerships. It also provides guidelines for ethical use, ensuring that AI deployment benefits society at large.
The government has committed plenty of funding to support AI research and development, and nurture a 15,000-strong AI talent pool. This includes new degree programmes, research fellowships and technical certifications that are relevant to industry needs.
Solving AI's structural weaknesses
Despite its potential, AI poses well-known risks, and Singapore has been upfront about confronting them head-on.
Distorted and gap-filling outputs from AI models are one critical concern – especially in sectors where accuracy is paramount. These false outputs often stem from poor data quality or gaps in training sets.
In Singapore, regulators and developers are encouraged to implement strict data governance protocols, such as structured validation, augmentation from many different sources, and human review during the training phase.
Bias in AI is another issue, particularly in high-stakes use cases such as hiring, credit scoring and healthcare diagnostics. Models trained on historical data can replicate – and even amplify – existing inequalities.
To address this, Singapore encourages inclusive data practices, the use of bias-detection algorithms, and the involvement of multidisciplinary review boards to assure fairness before models go live.
Transparency is therefore central to the trust needed to ensure AI accuracy. Many advanced models, especially large language models, operate like black boxes. This minimises accountability.
Singapore encourages explainable AI (XAI) – tools and frameworks that provide clarity on how and why an AI system made a decision. XAI is increasingly being embedded into regulatory requirements, particularly in industries such as finance and healthcare.
These principles – transparency, fairness, and accuracy – are critical to building AI that society can trust.
Singapore recognises the importance of trust as a core pillar of its digital strategy. The Personal Data Protection Act guarantees high standards for data handling and consent, fostering business confidence and enabling data flows with major economies.
The Republic is also advancing international cooperation through frameworks such as the Asean Guide on AI Governance and Ethics, promoting cross-border trust and ethical norms.
Singapore's path forward
As Singapore advances, AI can play a role in developing systems that can scale responsibly and provide concrete advantages throughout the economy. As automation improves over time, agentic AI is gaining attention for its ability to function independently.
Unlike conventional AI, these systems can diagnose issues, resolve problems and adapt based on real-time data. Singapore's robust IT infrastructure and governance framework provide a strong foundation for deploying such technologies, especially in mission-critical fields such as cybersecurity and smart infrastructure.
In tandem, the country is making sustained efforts to close the digital skills gap. SkillsFuture provides a national framework for lifelong learning, offering credits and subsidies for citizens to pursue AI-related courses. More than just classroom training, the initiative also supports on-the-job learning and industry-recognised certifications.
TechSkills Accelerator works closely with employers to co-develop workforce strategies. These include company-led training schemes as well as tech immersion and placement programmes, which are designed for real-world job roles.
These initiatives are part of a broader move to ensure that AI growth does not widen inequality. Instead, they strengthen economic mobility and national resilience, giving every citizen a pathway to participate in the digital economy – whether through mid-career conversion or enhanced technical specialisation.
The investment landscape reflects growing global confidence in the Republic's ability to be a global AI leader. Today, Singapore is home to more than 1,100 AI startups, many of which specialise in deep tech, medtech and enterprise software.
It also hosts over 150 AI-focused research and development teams, including those from Google, Nvidia and Alibaba. OpenAI's new office opening is another signal of increasing interest in Singapore from players all around the world.
To scale this ecosystem, the government is backing AI Centres of Excellence, working with more than 100 firms to embed the technology across logistics, manufacturing, finance and professional services.
These collaborations aim to increase AI adoption, improve productivity and create new job categories. With its world-class intellectual property protection and transparent regulations, Singapore offers a highly competitive base for AI-driven growth across South-east Asia.
Singapore is building an AI ecosystem grounded in trust, talent and technology. Its mix of strong regulations, workforce readiness and infrastructure makes it a strategic AI hub, not just in Asia, but globally. As the country looks ahead to its next 60 years, AI is poised to play a major role in its continued economic leadership and distinctiveness in the region.
The writer is regional director at ManageEngine