WORKFORCE READINESS A KEY CHALLENGE
Across sectors, workforce readiness remains a key challenge.
Employees need the right skills to effectively use and work alongside AI systems, with operational integration also being critical, said SIT’s Dr Winkler.
If the burden of using AI increases, companies may face resistance from frontline staff, added SMU’s Asst Prof Goh.
“Even accurate AI can fail if it creates more clicks, alerts or documentation load for ground staff who will rationally resist it,” he said.
The skills gap between existing technical abilities and the AI-fluent roles needed to redesign complex workflows also needs to be addressed.
“To succeed, companies must not just use AI tools, but also prioritise workforce upskilling to ensure that humans can remain at the centre of future workplaces where roles will be redefined,” said Mr Khandelwal.
Experts also cautioned the risks involved in scaling up, such as overdependence on vendors and AI hallucinations, where the system generates incorrect or misleading information.
Moreover, it is a costly venture for some companies. “AI scaling inherently requires a high allocation of resources, high initial cost of investment and technical complexity,” said SUSE’s Ms Peria.
OpenAI’s Mr Jay warned that while many companies succeed at using AI in the pilot stage, they struggle to integrate it into multi-step workflows.
“This is what we describe as the ‘capability overhang’ – the gap between what AI systems are capable of and how they are typically used.”
NOT LEAVING SMALLER FIRMS BEHIND
The prime minister also said in his speech that support for all enterprises, especially SMEs, will be strengthened – a move industry players welcomed, noting that the measures will allow these firms to adopt AI without being weighed down by cost.
Under an expanded Enterprise Innovation Scheme, businesses can claim 400 per cent tax deductions on qualifying AI expenditures, capped at S$50,000 (US$39,600) annually for the assessment years of 2027 and 2028.
The scheme encourages SMEs, which employ the vast majority of the local workforce, to step up their AI adoption, said Ms Peria.
“When an SME becomes a ‘champion of AI’, the transformation happens in the neighbourhood accounting firm or the local manufacturing plant,” she added. “This localised adoption ensures that the benefits of AI are distributed across the heartlands and benefit a wider swathe of our populace.”
Having national-level “AI missions” also bridges the gap between SMEs and larger firms by providing smaller companies with higher-level ecosystem support they may not have, said Mr Khandelwal.
The ecosystem should not require SMEs to have in-house AI specialists; instead, it should be one that allows them to learn from leaders and access shared resources that can help them move beyond simple experiments to real, productive AI use, he added.
Dr Winkler echoed this sentiment on access, pointing out that lowering barriers to hands-on learning as well as tools and training ensures that “productivity gains are not limited to larger enterprises”.
Mr Percy Hung, CEO and founder of Choco Up, a Singapore-based growth financing platform that has supported more than 400 SMEs locally, said that many smaller firms are already adopting AI and the national missions will expedite this movement.
But to sustain momentum, he highlighted the need for clear sector-specific playbooks and case studies that demonstrate measurable returns; equipping founders with the knowledge to make informed AI investments; and flexible capital to help SMEs to pilot and scale solutions confidently.
“With national strategy reinforcing what businesses are already doing, Singapore is well-positioned to ensure AI transformation is broad-based, inclusive and economically impactful,” said Mr Hung.
