Singapore’s digital economy has continued its upward trajectory, representing 18.6% of the country’s gross domestic product (GDP) in 2024, according to the Singapore Digital Economy (SGDE) Report 2025 by the Infocomm Media Development Authority (IMDA).
This figure, equivalent to S$128.1 billion, marks a steady increase from 18% in 2023 and 14.9% in 2019, reflecting the expanding influence of digitalisation across industries.
While technology firms remain significant, the report highlights that over two-thirds of digital economy value is now generated outside the information & communications (I&C) sector.
Finance and insurance have emerged as the leading contributors among these non-I&C sectors, followed by wholesale trade and manufacturing.
This trend underscores the broad-based adoption of digital solutions, with insurance firms playing a pivotal role in the nation’s digital transformation.
Small and medium-sized enterprises (SMEs) are increasingly integrating digital technologies into their operations.
In 2024, 95.1% of SMEs had adopted at least one digital area, according to IMDA data. The average number of digital areas adopted by SMEs rose to 2.3 out of six measured categories, up from 2.0 the previous year.
Adoption of sector-specific digital tools, as outlined in IMDA’s Industry Digital Plans, also saw a notable rise.
Nearly all SMEs (97%) reported implementing at least one sector-specific solution in 2024, compared to 85% in 2023. For insurance businesses, these tools support compliance, customer engagement, and operational efficiency.
Singapore’s technology workforce expanded to 214,000 in 2024, up from 208,300 in 2023. The most significant growth was observed in roles related to artificial intelligence (AI), data analytics, and cybersecurity, with many of these positions emerging outside the traditional I&C sector.
The median monthly wage for resident tech professionals reached S$7,950, substantially higher than the overall median of S$4,860.
The demand for programming skills such as Python and SQL has grown, alongside expertise in cloud computing and scalable digital infrastructure. Meanwhile, the need for web development skills has declined.
The insurance sector, along with finance, has contributed to the rising demand for AI-related skills, as more firms seek to leverage data-driven insights and automation.
AI is becoming increasingly integrated into business operations. The proportion of SMEs using AI tripled in 2024, rising to 14.5% from 4.2% in 2023. Larger enterprises also increased their AI adoption rate, from 44% to 62.5%.
SMEs that implemented AI-enabled solutions through the Productivity Solutions Grant (PSG) reported average cost savings of 52%, while those adopting AI-powered cybersecurity solutions achieved savings of 71%.
AI is being used across multiple business functions, including IT, customer service, and finance. SMEs reported using AI in an average of three business functions, while larger firms averaged five.
The report found that 84% of AI-adopting firms relied on commercially available generative AI tools, 52% used domain-specific solutions, and 44% developed customised or proprietary AI systems.
Looking ahead, more than two-thirds of AI-adopting firms plan to prioritise workforce training and upskilling, and 63% expect to redesign roles to better integrate AI into daily operations.
A recent IMDA survey of working individuals revealed that 73.8% of respondents use AI tools at work, with frequent applications in brainstorming, content creation, and administrative tasks.
Most users (85%) reported improvements in productivity, time management, and work quality.
Additionally, nearly half of respondents used AI to enhance creativity, and one-third cited benefits for professional development.
Employers are providing support for AI adoption, with about 70% of surveyed workers indicating they received assistance through training, access to paid AI tools, or clear usage guidelines.
Kiren Kumar, deputy chief executive of IMDA, said the agency is seeing steady progress in Singapore’s digital economy, which now makes up 18.6% of the country’s GDP.
“We will broaden and deepen our support for sectors, enterprises, and talent to harness digitalisation and AI for innovation and productivity. At the same time, we are laying the foundation for frontier technologies including Embodied AI, Agentic AI, Quantum Computing, and Communications, ensuring Singapore stays competitive and inclusive in the digital future,” he said.
IMDA’s ongoing collaboration with government agencies, industry stakeholders, and the workforce aims to further strengthen Singapore’s digital economy.
The finance and insurance sectors are expected to remain central to this strategy, as digitalisation and AI adoption continue to reshape business models and industry practices.
