SMEs: Innovate with AI or risk stagnation

SINGAPORE is fully invested in riding the artificial intelligence (AI) wave to transform the economy. In Budget 2024, its finance minister announced plans to invest over S$1 billion in the next five years to enhance AI computing, foster talent, and promote industry development. Singapore is truly at the cusp of a profound shift in economic opportunities. While larger companies have been quick to recognise this and integrate AI to build greater business value, many of Singapore’s small and medium-sized enterprises (SMEs) are finding themselves at a crossroads.

Singapore was in fact a leader globally in investing and developing AI in 2019, ensuring that the country had the infrastructure and strategy in place even before the widespread prevalence of ChatGPT and generative AI. Yet, the recent Cisco AI Readiness Index 2023 revealed that while 95 per cent of Singapore companies recognised the urgency to deploy AI-powered technology, only 13 per cent feel fully ready to integrate it into their businesses.

In today’s increasingly inflationary environment, SMEs have their work cut out. These businesses can no longer afford to focus on merely staying afloat; rather, they need to position themselves for sustained growth to stay competitive and future-ready. While no one can predict the seismic shifts of the future, it seems glaringly visible that the waves of change will be dictated by frontier technologies such as AI.