Singapore's Economic Strategy Review Calls for Faster AI Adaptation

Singapore must accelerate its adaptation to an AI-driven global economy or risk falling behind, the Republic's Economic Strategy Review committees warned in their final report released on June 24. The year-long review, which involved more than 80 consultation sessions, concluded that the city-state needs to move faster on AI adoption, worker retraining, and building sovereign technological capabilities to sustain growth in a fundamentally changed global environment.

The report makes three major recommendations. First, Singapore should position itself as a trusted global hub for AI — not by building the biggest frontier model or hosting the largest data centres, but by becoming the place where AI solutions are developed, tested, and deployed at scale for real-world problems. This builds on the recently established National AI Council chaired by Prime Minister Lawrence Wong. Second, the review calls for developing more Singapore-headquartered companies with over $1 billion in revenue, using venture debt and private credit to help startups scale, and providing stronger overseas expansion support. Third, it recommends creating "bridges" for workers in at-risk jobs to transition into AI-resilient roles, with earlier intervention for retrenched workers — including advance notification and transition support that begins before workers actually lose their jobs.

The report arrives as Singapore faces a tightening labour market and growing global competition for AI talent and investment. The committees emphasised that the cost of inaction would be far greater than the cost of failed experiments: "Not every investment will succeed, but we must persist — because the cost of inaction and missed opportunities will be far greater over time." The Government has said it will study the recommendations and work with industry partners to implement them, with the Ministry of Digital Development and Information overseeing the AI-related portions.

Beyond AI, the review also recommends expanding Singapore's role as an energy hub — particularly after the Middle East crisis and Strait of Hormuz blockade disrupted oil flows — and investing in quantum technologies, space technologies, and high-value trust-based services like AI governance, cybersecurity, and compliance assurance. The sea and air hubs should integrate physical infrastructure with digital, AI-enabled systems to offer the fastest, most reliable end-to-end goods flow in the region.

Why it matters for Singapore: This is not just another government report — it is the most comprehensive economic strategy document produced under Prime Minister Lawrence Wong's administration, and it places AI at the centre of Singapore's next phase of economic development. The emphasis on worker transition support, AI-augmented jobs, and Singapore-headquartered champions signals a shift from being a hub that hosts foreign AI companies to one that builds indigenous AI capacity. For businesses and workers, the message is clear: the AI transition is not optional, and the Government is willing to invest heavily in making it work.