Generative AI is quickly becoming a cornerstone of business strategy in Singapore. Companies are allocating significant resources to this technology, with a median spend of $16 million, surpassing the global average. This investment reflects the growing understanding of AI’s potential to drive productivity and innovation in a region where the digital economy already contributes over 17% to the GDP.
Lagging Behind Global Pace
However, challenges persist. Despite the investment, many Singapore-based businesses feel they aren’t moving fast enough with AI adoption. In fact, 66% of organizations express concerns that their progress is too slow, while 58% fear that these delays could result in a competitive disadvantage.
The key barriers to adoption include talent shortages, high implementation costs, and concerns over data quality and security. Chief among the factors inhibiting generative AI adoption in Singapore is the cost and availability of talent—which is also cited as a major inhibitor in most of the geographies analyzed, emphasizing the global nature of the issue.
This slow pace is compounded by the nation’s lower-than-average readiness for AI, particularly when it comes to infrastructure and computing power.
Like their global counterparts, these organizations are focusing more on using generative AI for productivity gains rather than radical innovation. The aim is to leverage AI to improve operational efficiencies and direct the resulting savings into growth initiatives. This strategic shift highlights how companies are evolving beyond traditional automation and using AI to unlock new revenue streams.
Transformation to Drive Value
Organizations are now redirecting productivity gains towards growth-oriented projects. These efforts mark a shift from traditional automation to a broader, transformative use of AI. Locally basedompanies are increasingly exploring how AI can unlock new business models, streamline operations, and foster long-term growth.
Despite all the hurdles, the robust digital infrastructure and strong government support position Singapore well for future growth in generative AI. The Singaporean government has already recognized the need for upskilling, offering initiatives aimed at building AI expertise within the workforce to address the talent gap. This combination of investment, policy support, and a growing digital economy could make Singapore a leader in the generative AI space across Southeast Asia.
The Future of Singapore’s AI Landscape
In the near future, businesses need to focus on overcoming inhibitors such as talent scarcity and data challenges. Organizations that do so will be better equipped to take advantage of AI’s full potential, driving not just productivity but also innovation in areas like business model transformation and customer experience enhancement. As they scale up, early adoption of AI in sectors like media, finance, and customer service is expected to set the stage for broader, cross-enterprise use.
For more insights on the social impact of Generative AI, read Cognizant’s article.
Transforming Singapore’s Public Sector for Scalable AI Success
Explore how Cognizant’s ‘Rewire for AI’ approach enables Singapore’s public sector to overcome AI adoption barriers by aligning people, processes, and technology. From building a skilled AI-ready workforce to creating robust data strategies and modernising legacy systems, Cognizant empowers public agencies to scale AI effectively for long-term public impact.
Amplifying the Value of Generative AI
Generative AI has captured the attention of business leaders, employees, consumers, and governments alike. Unlike previous technological debuts, it holds the potential to transform operating and business models entirely. However, realizing its full potential requires a strategic approach.