Moving the needle on AI adoption

THE call for enterprises to invest in technology to enhance productivity and competitiveness is loud and clear. In Budget 2025, a new S$150 million Enterprise Compute Initiative (ECI) was announced to help businesses grow their artificial intelligence (AI) research and development, as well as productisation, capabilities.

Based on the Infocomm Media and Development Authority’s Singapore Digital Economy Report 2024, only 4.2 per cent of small and medium-sized enterprises (SMEs) and 44 per cent of larger companies have adopted AI. Meanwhile, the technology is not standing still – it has evolved into generative AI and, more recently, agentic AI.

Clearly, there is much room for enterprises in Singapore to stay in step and accelerate the use of the technology for growth and innovation.

From adoption to scale

Like most transformation projects, enabling enterprise-wide AI adoption requires a holistic approach across people, processes and technology, whether it is finding the right AI talent, choosing the right AI software, or having the right AI infrastructure.

Typically, large multinational organisations have the advantage of internal funding, larger budgets and in-house AI teams to develop solutions on a large scale, and train the workforce to use the new tools effectively.

Smaller enterprises, on the other hand, are often resource-constrained, and invariably face challenges in building AI applications themselves due to the significant infrastructure and talent investments required. This group of enterprises may therefore find the ECI helpful and timely.

The initiative offers enterprises access to cloud compute credits, training programmes from cloud service providers, as well as grants to use consultancy services by system integrators to help them develop and scale AI solutions.

This removes implementation burdens such as the lack of understanding on whether solutions are right for their business and the potential impact on existing processes and staff. It is particularly useful for organisations that have compelling AI use cases; the extra boost in funding and external vendor support can help them accelerate their AI builds.

Aside from offsetting expenses in AI development, the ECI addresses a vital part of the enterprise AI journey – it helps companies to move beyond proofs-of-concept and pilot projects. Advancing beyond these initial stages requires a higher level of technical expertise that is likely not available within organisations.

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Leveraging the ECI to tap into readily available professional expertise can hold the key to unlock significant productivity gains and cost efficiencies at scale.

Taking a collaborative approach

SMEs also stand to benefit from these AI solutions that have been developed through the experiences of larger players in the sector. The ability to implement these solutions with confidence, knowing that they have been proven to work, can be motivating.

Under the existing Productivity Solutions Grant (PSG), there are existing off-the-shelf digital solutions that offer SMEs a cost-effective and accessible entry point for AI adoption. However, these primarily cater to uses in general business functions.

It would be highly complementary to add the tailored AI solutions that are developed through the ECI to the suite of PSG-supported solutions. In this regard, the ECI also potentially creates opportunities for enterprise use cases to be utilised as blueprints for broader AI adoption, uplifting entire sectors.

Alternatively, Singapore can create a platform akin to a national AI application store that houses all the AI solutions that can be adopted with government support. This AI store can also include shared services for maintenance and support of the technology, as well as cloud and infrastructure management.

This could drive down the total cost of technology ownership, ensuring that both affordability and innovation remain priorities.

AI for Singapore, made in Singapore

The ECI marks a pivotal step in advancing AI adoption in Singapore, particularly in addressing enterprise needs for sector-specific solutions that are not available off the shelf from software providers.

The initiative strengthens enterprises’ ability to adopt – and scale – AI, paving the foundation for industry-wide transformation. It also provides fertile ground for nurturing the AI talent pool while facilitating knowledge transfer.

With lowered adoption barriers, at least from funding and expertise perspectives, SMEs are better enabled to keep pace with the AI evolution. A strong and innovative Singapore enterprise core will further enhance the country’s attractiveness to foreign investments and position it favourably in the race for leadership in AI innovation.

The writer is EY Asean data and artificial intelligence leader. The views in this article are his and do not necessarily reflect the views of the global EY organisation or its member firms.