Singapore’s digital economy has reached a significant milestone, accounting for 18.6% of the nation’s gross domestic product (GDP) in 2024. This figure represents a substantial increase from 14.9% in 2019 and demonstrates the impact of digitalisation and artificial intelligence (AI) across multiple sectors. The growth of the digital economy, which expanded by S$12 billion to a total of S$128.1 billion, is outlined in the Singapore Digital Economy (SGDE) Report 2025 released by the Infocomm Media Development Authority (IMDA).
A key finding in the report indicates that over two-thirds of the digital economy’s growth is attributed to sectors outside of Information and Communications (I&C). The finance and insurance sectors emerged as the largest contributors, followed closely by wholesale trade and manufacturing. This underscores the necessity for businesses across all industries to embrace digital transformation in order to foster growth.
Digital Adoption Rates Among SMEs and Workforce
The report highlights a remarkable shift in the adoption of digital technologies, particularly among small and medium-sized enterprises (SMEs). In 2024, the rate of AI adoption among SMEs surged to 14.5%, more than tripling from 4.2% in 2023. For larger enterprises, the adoption rate increased from 44% to 62.5%. This rapid uptake reflects a broader trend of digitalisation that is being embraced throughout the economy.
According to an IMDA pulse survey, 73.8% of workers reported using AI tools regularly, with many engaging with these technologies multiple times a week. The survey found that 85% of AI users noted improvements in their productivity and work quality. Moreover, employers are recognizing the importance of supporting this transition, with around 70% of surveyed workers stating that their employers provided resources to aid AI usage, including training opportunities and access to AI tools.
Economic Impact and Future Prospects
The expansion of Singapore’s tech workforce is another indicator of the digital economy’s growth. The number of tech jobs rose from 208,300 in 2023 to 214,000 in 2024, with roles in AI, data analytics, and cybersecurity among the fastest-growing. The median monthly wage for tech workers was reported at S$7,950, significantly higher than the national median of S$4,860.
As more companies implement AI solutions, the tangible benefits are becoming clear. SMEs that adopted AI tools under the Productivity Solutions Grant (PSG) achieved an average cost savings of 52%, while those that utilized AI-powered cybersecurity solutions saw even greater savings of 71%. These figures illustrate not only the financial advantages of AI adoption but also its potential for enhancing operational efficiency.
Kiren Kumar, Deputy Chief Executive of IMDA, expressed optimism about the ongoing development of Singapore’s digital economy. He stated, “We are encouraged by the strong growth momentum of our Digital Economy, now accounting for 18.6% of Singapore’s GDP. We will broaden and deepen our support for sectors, enterprises and talent to harness digitalisation and AI for innovation and productivity.”
The IMDA is committed to collaborating with government agencies, industry stakeholders, and the workforce to fortify Singapore’s position as a leading digital economy. This includes fostering innovation in emerging technologies and ensuring that the benefits of digitalisation reach all sectors of society.
As Singapore continues to evolve in the digital landscape, the integration of advanced technologies like AI is poised to play a crucial role in driving future growth and competitiveness on the global stage.
