Singapore Companies Take Cautious Approach to Automation and AI, Study Shows

Companies in Singapore are less ambitious than firms in other Southeast Asian countries when it comes to future automation plans, a new survey has found. Their approach appears to be \"incremental\" and \"pragmatic\", which may be because of concerns over job losses and displacement, according to the States, Markets and Regional Integration report, released on Tuesday (Jul 22).

The report also found that the majority of Singapore companies polled see automation leading to either an increase in headcount or no change. In comparison, businesses in the Philippines, for instance, expect more job displacement due to automation. Automation can refer to the use of artificial intelligence, industrial robots, production and machinery automation, general software and information technology or other tools.

The report sought to understand how businesses in seven Southeast Asian countries view four areas of economic transformation: automation and digitalisation, sustainability practices, regulation and governance, and cooperation through regional institutions. Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore and Vietnam were included in this study.

In Singapore, the survey was led by National University of Singapore (NUS) in collaboration with the Institute of Policy Studies (IPS), and involved trade associations and chambers including the Singapore Business Federation (SBF) and the American Chamber of Commerce in Singapore. The report was released a week before an upcoming IPS-SBF conference titled \"Global-City Singapore: SG60 and Beyond\". Prime Minister Lawrence Wong and Deputy Prime Minister Gan Kim Yong are expected to speak at the conference, which will be held at the Sands Expo and Convention Centre on Jul 29.

Researchers received 209 responses from companies in Singapore, but only 101 were valid – the others did not meet the threshold of completing at least 25 per cent of the questions. The survey was conducted in 2023 and 2024.

WHERE THINGS STAND

Automation is widely adopted in Singapore, but the study found that implementation of automation occurs at a lower level. About 13.2 per cent of companies reported that they do not use any automation in their business, and nearly 70 per cent use automation in only up to 25 per cent of their business processes. Around 14 per cent of Singapore respondents have automated between 26 and 50 per cent of their tasks, while only 2.63 per cent use automation in more than half of their work. None of the Singapore businesses surveyed reported that they are fully automated.

\"While no firms in the Singapore sample report full automation, most firms have adopted at least some form of automation, an indication of the country’s universal exposure to digitalisation, even among smaller firms,\" the report said.