Revenue, employment improve with business AI use: MTI report
Higher-income, mid-career local workers are reaping job benefits
A recent study by the Ministry of Trade and Industry (MTI) has revealed that businesses in Singapore using artificial intelligence (AI) have experienced a 16% increase in revenue and an 8% rise in employment within the first year of implementation. However, productivity and profit improvements have yet to be observed. Senior economist Sarah Liu from the Infocomm Media Development Authority explained that higher-income and mid-career workers, earning between S$7,000 to S$10,000 a month and aged 35 to 44, have reaped the most benefits from AI.
These employees typically work in roles where AI can automate repetitive tasks, freeing them to focus on more complex, skill-based work. Additionally, AI adoption has led to a rise in hiring for well-paid and highly skilled foreign Employment Pass holders, driven by the need for specialized expertise. As AI use becomes more widespread, the report suggests that employment opportunities may expand for workers in other wage categories and age groups.
The analysis of AI-related job postings on the government's MyCareersFuture portal indicated that around 8% of companies utilize AI. Larger companies and sectors such as infocomm, electronics, professional services, finance, and insurance are more likely to adopt AI. Notably, AI use boosted employment by 18% in wholesale trade, accounting for a 24% increase in revenue.
In the information and communications sector, AI-related headcount growth amounted to 19%, with corresponding gains in revenue (23%) and profit (16%). For professional services firms using AI, headcount increased by 10%, while revenue rose by 12%. The largest sector-specific increases in revenue and profit were observed in finance and insurance, where AI implementation resulted in 21% and 73% growth, respectively.
Liu emphasized the need for tailored support to encourage businesses to adopt AI, such as identifying high-impact use cases or offering assistance to smaller firms lacking internal AI integration capabilities. Despite these positive findings, the study did not find a statistically significant increase in productivity and profit within the first four years of AI adoption.
Liu suggested that full AI benefits may materialize only after complementary investments are made, highlighting the potential role of prior tech capabilities like cybersecurity and data analytics in facilitating AI adoption.
Written by urgent.news from The Business Times - Singapore's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
