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The impact of AI is also differentiated across occupational groups, with 82% of higher-skilled professionals in analytical and cognitive roles likely to experience changes in task composition.
Singapore's Ministry of Manpower (MOM) released its inaugural report on adoption of artificial intelligence (AI) among firms on 30 April 2026. The report, which overall revealed that AI adoption is still at an early stage of diffusion within firms, also suggested that AI is complementing rather than displacing labour.
This is because firms have reported productivity gains and improvements in work processes, with impacts primarily taking the form of job role redesign as opposed to workforce reductions.
Per the report, only a small minority of firms reported AI-attributable reductions in headcount or lower hiring activity (6.2%). Instead, firms more commonly reported adjustments within existing roles, including the redesign of job functions (18.9%). Some firms have also begun creating new AI-related roles (13.9%), indicating emerging demand for specialised skills.
The report also found that AI’s impact varies across occupational groups. Higher-skilled professionals, particularly those engaged in analytical and cognitive tasks, are more likely to experience changes in task composition due to AI (82%). By contrast, roles involving routine physical tasks, such as those in production and transport, have so far seen more limited exposure (16.7%). Where AI exposure exists, it has generally been associated with productivity improvements rather than job displacement.
Overall, the Ministry’s findings suggest that the current phase of AI adoption in Singapore is characterised primarily by task-level transformation.
Other findings from the report are as follows:
AI adoption remains limited and at an early stage
A majority of firms surveyed (71.5%) have yet to adopt AI.
Of the 28.5% that have started, most remain in the early stages of adoption, with only 3.8% integrating AI into core business processes, while 7.4% are still planning and 6% are piloting AI use.
AI adoption is widespread among larger firms
Larger firms show higher AI adoption rates and more advanced integration than smaller firms. Adoption increases from 23.9% among firms with fewer than 25 employees to 76.4% among firms with more than 500 employees.
This likely reflects larger firms’ stronger digital infrastructure and organisational capacity to embed AI into existing workflows.
Digitally intensive and knowledge-based sectors are more progressive in AI adoption
AI adoption is most prevalent in digitally intensive and knowledge-based sectors, led by information and communications (74.1%), followed by professional services (57.5%) and financial and insurance services (56.4%).
Structural barriers continue to constrain uptake
Firms continue to face barriers to AI adoption, with high implementation costs (44.9%) and a lack of in-house expertise (42.4%) among the most frequently cited challenges. Smaller firms are more likely to struggle with organisational readiness, including the absence of a clear strategy (32.4%) and low trust in AI (30.8%), while larger firms face issues around integration complexity (56.1%) and data security (55.4%).
Productivity gains are already evident among adopters
Among firms that have adopted AI, 70.7% reported improvements in worker productivity, while others cited gains in decision-making (13.3%) and innovation (11.9%). This suggests that firms are already seeing tangible benefits, even at relatively early stages of adoption.
Firms are taking steps to build capabilities for AI adoption and support workforce adaptation
Firms are also starting to build the capabilities needed to use AI more effectively. Smaller firms are prioritising basic steps such as staff training (46.6%) and providing AI tools (41.1%), while larger firms are more likely to focus on formal governance frameworks (37.5%) and workflow redesign (22.5%). This points to a gradual shift in how firms organise work, with changes so far taking place mainly within firms rather than across sectors or the broader labour market.
According to MOM, AI is already changing how work is done and helping some firms improve productivity. But the benefits are unlikely to be evenly shared. Smaller firms may struggle to keep up with adoption, while workers who do not build relevant skills could find it harder to adapt as AI changes everyday tasks.
Lead image and Infographics / MOM Adoption of Artificial Intelligence Among Firms report
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