Singapore is making bold investments in artificial intelligence (AI), but businesses are struggling to scale AI initiatives across their organisations, according to a new global study by the IBM Institute for Business Value.
The annual study, which surveyed 2,000 CEOs globally, including 210 in ASEAN and Singapore, reveals that executive respondents expect AI investment growth to more than double in the next two years.
However, only 14% of Singaporean businesses have successfully scaled AI enterprise-wide in the past three years, highlighting a significant gap between ambition and execution.
While over half of Singaporean CEOs (52%) are actively adopting AI agents and preparing for large-scale implementation, challenges persist. These include difficulties in data infrastructure, a need for greater budget flexibility, and a shortage of specialised talent.
ROI expectations and data infrastructure gaps
Singaporean CEOs are more ROI-driven than their global counterparts, with 80% prioritising AI use cases based on return on investment, compared to 65% globally.
However, only 23% report that their AI initiatives have delivered the expected returns, suggesting a mismatch between investment priorities and actual results.
A key challenge lies in data infrastructure. While 58% of Singaporean CEOs recognise integrated, enterprise-wide data architecture as critical for cross-functional collaboration, and 68% view their organisation's proprietary data as vital for unlocking the value of generative AI, 52% admit that recent investments have resulted in disconnected, piecemeal technology. This fragmented landscape hinders effective AI deployment and value extraction.
Talent and skills gap
The study highlights a significant skills gap, with 32% of the Singaporean workforce expected to require retraining or reskilling in the next three years.
Many companies are turning to automation (67%) to address these shortages, and nearly half (48%) are hiring for AI-related roles that didn't exist a year ago. However, 61% of Singaporean business leaders still face challenges in hiring employees with the right technical skills.
Strategic leadership and adaptability
The IBM study underscores the importance of strategic leadership and a willingness to embrace risk. As IBM Vice Chairman Gary Cohn notes:
"As AI adoption accelerates creating greater efficiency, and productivity gains, the ultimate pay-off will only come to CEOs with the courage to embrace risk as opportunity."
Singaporean businesses must build adaptable data foundations and invest in talent to translate AI ambitions into tangible results. With the right approach, Singapore can leverage its national AI strategy and overcome these challenges to become a true leader in the age of AI.
