AI adoption lifts Singapore business revenue 16% in a year, MTI study finds

Singapore's AI story is usually told in headline numbers — GDP upgrades, export surges, data centre dollars. But a new study from the Ministry of Trade and Industry looks at what AI actually does to the businesses on the ground, and the answer is more nuanced than the macro picture suggests: revenue and hiring go up quickly, while productivity and profit take their time.

The MTI report, released on Tuesday, found that businesses here saw revenue rise 16 per cent one year after adopting AI, with employment up 8 per cent over the same period. The gains are concentrated among higher-income and mid-career workers — those earning S$7,000 to S$10,000 a month and those aged 35 to 44 — who are best positioned to take on the higher-value tasks AI frees them for. Notably, the study found no statistically significant increase in productivity or profit in the first four years of adoption, which senior economist Sarah Liu of the Infocomm Media Development Authority attributes to a simple reality: the full benefits only materialise after complementary investments in areas like data infrastructure and cybersecurity.

Sector-level numbers show where the payoff is landing first. Finance and insurance firms using AI posted a 21 per cent revenue gain and a striking 73 per cent jump in profit, alongside 21 per cent growth in average local wages. Wholesale trade saw employment rise 18 per cent as demand forecasting and logistics optimisation let firms expand, while information and communications firms added 19 per cent headcount with 23 per cent revenue growth. Overall, Liu identified 8 per cent of companies as AI users based on job postings on MyCareersFuture — a figure that skews towards larger firms and sectors like infocomm, electronics, professional services and finance.

The report lands at a moment when Singapore is leaning hard into AI-driven growth — the same week the government raised its 2026 GDP forecast to 4.5-5.5 per cent on the back of AI-fuelled demand. It also carries a warning for policymakers: the first-wave benefits are flowing disproportionately to higher-income workers, and the 30 per cent of firms with no plans to expand AI adoption suggest a scaling gap between early movers and the rest of the economy. Liu's recommendation of more tailored, sector-specific support for smaller firms points directly at that divide.

Why it matters for Singapore: This is the first hard evidence of AI's return-on-investment curve in the local economy, and it cuts both ways. For businesses, it suggests the payoff is real but delayed — revenue and headcount respond within a year, while the productivity dividend needs patient, complementary investment. For workers, the picture is a reminder that AI's benefits are not automatic: they accrue to those who can move up the value chain, which is exactly why the government's skills push — from SkillsFuture to the National AI Strategy's talent programmes — is the necessary complement to adoption. The firms that treat AI as a one-off tool purchase rather than a capability build-out will likely find themselves on the wrong side of that 30 per cent.