Digital economy contributes 17.7% to SG GDP as more SMEs adopt AI

Singapore's Digital Economy is continuing to be a significant force, contributing 17.7% to the country's gross domestic product (GDP) in 2023. In fact, the digital economy contributed SG$113.2 billion of the country's GDP in 2023, an increase from SG$106 billion the year before.  This is according to the newly released Singapore Digital Economy Report (SGDE 2024) by the Infocomm Media Development Authority (IMDA).

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In addition, the digital economy had grown at a compound annual growth rate (CAGR) of 11.2% from 2018 to 2023. This is almost double the nominal GDP growth rate of 5.8% over the same period. This comes as enterprise digitalisation is deepening among SMEs. Around 94.6% of Singapore firms have already implemented at least one digital area. 

The share of SMEs that adopted at least one digital solution has risen from 69% in 2021 to 82% in 2023 too. Adoption of AI is also on the rise. Among larger enterprises, 44% adopted AI in 2023, more than doubling the 16.7% in 2018. SMEs also saw modest improvements in AI adoption rate, from 3.5% in 2018 to 4.2% in 2023. Importantly, digitalisation has brought positive impact to the enterprises and SMEs that adopted digital solutions under the Productivity Solutions Grant (PSG) have reported cost savings of around 50% on average during the period of 2018 to 2023

The year 2023 also saw a demand for tech professionals. Tech jobs increased by 3.4% year-on-year to reach 208,300 from 201,400 in 2022. 

Moving forward, IMDA said that innovation is key to a long-term competitiveness of the digital economy. It adds development of new technologies and products as well as improvement in business processes. This in turn contributes to the growth of the digital economy, said IMDA.

It added that key components of digital innovation in include research and development, firms with new digital products and services and tech startups in Singapore. 

"As the rate of change in digital technology accelerates, the future is being re-imagined by tech. IMDA will continue to work with other government agencies to put Singapore businesses at the forefront, and to work with the industry, the labour movement and research institutions to architect Singapore’s digital future," it said in a statement. 

The IMDA is also focusing on other efforts. Recently, it announced that it will be rolling out the next iteration of Singapore TV Audience Measurement (SG-TAM 2.0). SG-TAM 2.0 will provide unifying data insights across broadcast, social media and streaming platforms to help media and advertising companies better engage and develop products that resonate with their target audiences.

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