Opening Address by SMS Tan Kiat How at the Artificial Intelligence Festival Asia

Opening Address by Mr Tan Kiat How, Senior Minister of State, Ministry of Digital Development and Information, at the Artificial Intelligence Festival Asia (AIFA) (17 January 2025)

Mr Ang Yuit, President, Association of Small and Medium Enterprises

Ladies and Gentlemen

1. Good morning. I am happy to join all of you at the AI Festival Asia.

2. This is an important topic, and I am glad that we are focusing our minds on this.

Singapore's Position in AI Development

3. Digital technology has always been a major driver of Singapore’s economic growth, productivity and innovation.

4. For companies, large and small, and across different sectors, from manufacturing to retail to professional services, digital technology is pervasive and has been an important enabler for companies to remain competitive and to create opportunities for all Singaporeans.

5. In 2023, Singapore’s digital economy contributed about 17.7% to our nominal GDP. That is about S$113 billion, not insignificant, and it has grown over the years.

6. The growth of the digital economy has also created exciting opportunities for our local workers. For example, tech professionals now number more than 208,000 in our workforce, which is about 5%. More than 70% of these tech professionals are locals. So, creating good opportunities, good jobs and good careers for our locals.

7. At the same time, the pace of change is expected to pick up with developments in AI technology, which has the potential to transform industry segments, business models and jobs. We see early signs of this transformation across many different sectors, I mentioned manufacturing earlier, robotics, automation powered by AI, to services, healthcare. Not just the delivery of healthcare services, but all the way upstream: drug delivery, drug discovery and of course frontline services, retail, food and beverages. No service is untouched by some of the transformation that we see happening in the AI space.

8. As a small, open economy, Singapore will have to embrace these technological trends and be nimble to take full advantage of them.

9. And we have always done so, whether is it early years of the Internet, where you were putting up websites, creating web portals, delivering new services over the Internet to digital technologies like cloud-to-cloud computing, social media.

10. We have always been very nimble to take full advantage of the technology while mitigating the downside, putting guardrails in place to prevent some of the online harms that we see.

11. In an AI space, Singapore is likewise committed to AI development and adoption, for our businesses and workers to reap opportunities, while mitigating potential risks. We are a small economy. We cannot pretend that these trends do not happen. It’s a choice between disruption or development, and the government is firmly on the side of businesses and workers to develop, reskill, upskill, seize new opportunities, while trying to cushion the impact on workers and businesses due to the disruption, and that has always been our approach.

12. The National AI Strategy 2.0, launched in Dec 2023 guides our effort in harnessing AI as a force for good, building a thriving AI ecosystem, developing our workforce for new opportunities, and fostering a trusted environment for innovation.

Digital and AI Adoption Initiatives

13. Singapore is intensifying AI adoption across industries.

14. We are establishing AI Centres of Excellence (or CoEs) to drive sophisticated AI value creation and usage in key sectors, and we will continue to do more in this space.

15. We launched the Digital Enterprise Blueprint last year. A key focus area of the Digital Enterprise Blueprint is to foster AI adoption among our enterprises and workers.

16. For example, initiatives like the Generative AI sandbox by IMDA and Enterprise Singapore help SMEs test AI-enabled digital solutions in business functions like marketing and sales, and customer engagement.

17. I have taken a look at some of the solutions and deployments. Very encouraging, and SMEs, who adopted those solutions, have shared with me that they have reaped significant productivity gains, and more importantly, be able to service their customers better, not just customers here in Singapore, but increasingly overseas. So I encourage SMEs to make full use of the various initiatives and adopt technology to create new opportunities.

18. SMEs can also access Chief Technology Officer as a service, or CTO-as-a-Service, to find suitable digital tools and solutions catered to their specific needs, including AI-enabled solutions, with funding support through Productivity Solutions Grant (or PSG).

19. This is very useful for many SMEs, because as all of you would agree, SMEs in different sectors have different needs. The SME in the manufacturing sector versus SME in retail, F&B sector, your needs are very different. Your customers, business processes and digital maturity are very different.

20. For example, a SME just starting up and on the first step of adopting digital technology has a very different set up of solutions that they can use compared to a SME that has been doing digital technologies and maybe with a larger company.

21. The SME initiatives like CTO-as-a-Service and other various initiatives have tried to tailor some of the advisory and support to different types of SMEs. So, I encourage all our SMEs to just check it out and find something that may be useful for you.

Workforce Preparation and Inclusive Digital Transformation

22. At the same time, one of the most important ingredients is not technology. At the end of the day it is about people. It is our investment in our people and skills which is critical for long-term growth and to use the technology.

23. I always share with colleagues that our competition is not between the workers or the professional with the robot or AI. Our competition is not with the technology. Technology is not taking over a job. Who is taking over a job, who is competing with us, is someone else who can use technology better than us.

24. For example, a lawyer who can use Gen AI and AI capabilities to do things productively and to serve a client better is more competitive than a lawyer that does not. Likewise, you can think of different job roles across the industry or economy. Similarly, our competition is not with the technology. It is someone else who can use the technology better and more productively.

25. Increasingly, this competition is not just local, but we are competing somewhere else overseas. I bring back the earlier point that we are a small economy. We cannot pretend disruption of competition does not happen. But how do we equip ourselves to be more competitive so that we can continue to be relevant and do well as an economy, as an industry sector and our businesses and workers.

26. This is why the government has been working closely with the industry in many ways.

27. Initiatives such as Women in Tech, which is into its 6th year, have helped to increase the representation of women in the tech sector.

28. Diversity is important, as it brings about different perspectives and ideas to the table, sparking more innovation and creativity. We are also going further upstream with the Girls in Tech initiative to give more exposure to younger female students to know what the possibilities are and pursue their interests in tech.

29. For Poly and ITE students, we have formed the TechSkills Accelerator for ITE and Polytechnics Programme (TIP Alliance), an initiative where IMDA works very closely with industry partners, including our leadership in schools, to equip our graduates from our polytechnics and ITE with skills to take up tech job opportunities.

30. For mid-careerists, we will continue to invest in significant support to help mature workers re-skill and upskill.

31. National initiatives such as the TechSkills Accelerator has helped to upskill about 18,000 locals to secure tech employment opportunities. This is done in close partnership with companies, through TeSA place-and-train programmes such as company-led training.

32. Budget 2024 has topped-up to SkillsFuture Credits and the Level-Up Programme for mid-career Singaporeans looking to re-skill through full-time diploma programmes.

33. So we are putting in place significant effort, working closely with our partners, industry partners, IHLs and schools, to equip our people, not just those coming out from school graduating, but also virtual workers, mid-careerists, to be able to continue to be relevant and competitive and use technology to enhance their skills and productivity in the workplace.

Public-Private partnership

34. But the government cannot do this alone. The synergy between industry, our education institutes and workforce development agencies is a powerful one. It is our secret sauce. Not many countries can do it. And I will say that we can do this because of the significant relationship we have invested into this relationship over a period of time, working very closely together. It is something that is unique in Singapore, it is a strong identity advantage for us, the ability to bring different parties together, work on problems, come up with practical steps to address the issue and move forward together as a community and as a people.

35. I am very happy that the Association of Small and Medium Enterprises (ASME) has been key in bridging public and private sectors to promote a more conducive business environment which facilitates growth and development of a vibrant economy.

36. I am pleased that ASME will be furthering their commitment to uplift the workforce.

37. ASME will be partnering the Institute of Technical Education (ITE), Singapore Polytechnic (SP), and Nanyang Polytechnic (NYP), to provide practical experience and industry relevant training to the students from these institutions, and connect them with potential future employers.

38. These initiatives will empower our workforce to embrace AI, digitalisation, and cybersecurity, as we stride into the digital future.

39. This is an encouraging step, because if you look at the profile of our economy, the large bulk of our companies are SMEs, who hire a significant proportion of our workforce. To be able to get more companies to use technology on a wide scale on in a sector and at a pace that SMEs are comfortable with, creates many more opportunities for these companies, reproductive and competitive, and uplift our total economy that uplifts the entire industry sector.

40. At the same time, creating better work opportunities for our students, not just work life or a conducive business environment, because you use tools to be more productive, so you focus on the high value activities in your company, but at the same time create more pathways for workers in those SMEs to have fulfilling careers and progress to do well.

41. That is really a part of how we think about a partnership with our companies, our institutes of higher learning and the government coming together to give a boost to many of these efforts.

Conclusion

42. The MoUs today, signed by ASME with our ITE and polytechnics is a big and important step in this direction. I would like to express my thanks to ASME for organising this effort, and to the industry, all SMEs out there for supporting this programme. I would like to encourage our students to be bold in your aspirations and to explore. I think there are many exciting opportunities even as we adopt and embrace technology and mitigate the downside.

43. Thank you.