Written Answer · 2026-09-09 · Parliament 15
Impact of Global AI Capital Expenditure and Expansion on Singapore's Economic, Wage and Jobs Growth
Mr Saktiandi Supaat and Mr Edward Chia Bing Hui asked the Minister for Trade and Industry (Energy and Industry) about AI-driven growth. Mr Saktiandi asked whether the Ministry has assessed how sensitive Singapore's growth is to a material slowdown in global AI capital expenditure, and how much value-added AI growth is captured by local enterprises, R&D and intellectual property. Mr Chia asked how much of the growth has turned into productivity gains, wage growth, new jobs and value capture by local firms, and how the Government will monitor whether it benefits the wider economy. Dr Tan See Leng gave the same reply as to Mr Liang Eng Hwa: a slowdown in global AI capex would weigh on AI-linked sectors and could trigger market corrections, but the economy is well diversified. He cited a Ministry of Manpower survey showing about three in 10 firms had adopted AI and about seven in 10 of them saw productivity gains, and said the National AI Council will coordinate and monitor.
Why it matters
MPs asked for a quantified growth sensitivity and local value capture from AI, but the Government gave no such figures, only that about three in 10 firms have adopted AI.
Key Points
- • Dr Tan See Leng's reply covers questions from Mr Liang Eng Hwa, Mr Edward Chia Bing Hui and Mr Saktiandi Supaat, and is the same text as the written answer to Mr Liang's question
- • A slowdown in global AI capital expenditure could weigh on AI-linked sectors such as electronics, precision engineering and machinery wholesale; tighter global financial conditions and loss of investor confidence are the main downside risks
- • Information and communications, professional services, real estate and construction are expected to support GDP growth for the rest of 2026
- • Ministry of Manpower survey: about three in 10 firms have adopted AI, and about seven in 10 of those reported better worker productivity; more firms are redesigning roles and creating AI-related jobs rather than cutting headcount
- • MTI study: firms using AI saw higher revenue and total employment, with larger gains for those that deepened AI capabilities; Budget 2026 announced four National AI Missions
- • The Government will coordinate national AI efforts through the National AI Council and ensure AI-driven growth benefits the wider economy
The Government did not provide the quantified growth-sensitivity assessment the MPs asked for, nor data on AI value captured by local enterprises, R&D and intellectual property. Instead, in a reply identical to another question, it acknowledged the downside risks, stressed economic diversification, and cited a Ministry of Manpower survey and an MTI study to argue that AI is currently complementing rather than replacing labour.
Questioners Mr Saktiandi Supaat and Mr Edward Chia Bing Hui are concerned about the vulnerability and distribution of AI growth: how sensitive Singapore's growth is to global AI capex, and whether the gains actually reach local firms, wages and jobs.
MPs asked for quantified sensitivity and local value-capture data, but the Government offered only qualitative judgments and adoption rates, suggesting it has yet to publish any framework for measuring the local gains from AI growth; assigning monitoring to the National AI Council is the only institutional commitment so far.
"Through the National AI Council, we will coordinate our national AI efforts and ensure that AI-driven growth benefits the wider economy."
Participants (3)
Original Text (English)
SPRS Hansard · Fetched: 2026-09-26
90 Mr Saktiandi Supaat asked the Minister for Trade and Industry (Energy and Industry) given the growing contribution of AI-related activity to Singapore's economic growth (a) whether the Ministry has assessed Singapore's growth sensitivity to a material slowdown in global AI capital expenditure; and (b) what observations have been made on the capturing of value-added AI growth by local (i) enterprises (ii) research and development and (iii) intellectual property.
91 Mr Edward Chia Bing Hui asked the Minister for Trade and Industry (Energy and Industry) given the growing contribution of AI-related activity to Singapore’s economic growth (a) whether the Ministry has assessed how much of this growth has translated into productivity gains, wage growth, new job creation and value capture by local enterprises in AI-related and adjacent sectors; and (b) how the Government will monitor whether AI-driven growth benefits the wider economy.
Dr Tan See Leng : My response will cover the question raised by Mr Liang Eng Hwa in today's Order Paper, as well as questions by Mr Edward Chia Bing Hui and Mr Saktiandi Supaat for subsequent sittings. If the Members are satisfied with the response, they may wish to withdraw their questions after this session. [ Please refer to " Sustainability of AI-led Economic Growth and Potential Risks In Event of Major Correction in Global AI Asset Valuations ", Official Report, 9 September 2026, Vol 96, Issue 36, Written Answers to Questions for Oral Answer not Answered by End of Question Time section. ]
Artificial intelligence (AI)-related activity is expected to contribute significantly to Singapore's economic growth in the near and longer term. In the near term, strong global capital investment in AI infrastructure has benefited outward-oriented sectors that are plugged into the related supply chains. These include the electronics and precision engineering clusters of the manufacturing sector, as well as the machinery, equipment and supplies segment of the wholesale trade sector.
A slowdown in global AI capital expenditure could weigh on growth in these AI-linked sectors. Downside risks to global AI capital expenditure include tighter financial conditions globally, which could make financing more costly for these investments. In turn, a sudden fall in global AI-related capital spending could trigger a loss of investor confidence, which could result in sharp corrections in global financial markets, with negative spillovers on global economic activity.
Even as we keep a close watch on the AI-related risks, we would like to assure Members that Singapore's economy is well diversified. Apart from the AI-linked sectors mentioned earlier, other sectors, such as information and communications, professional services, real estate and construction, are also expected to support gross domestic product growth for the rest of 2026.
For AI to propel our longer-term economic growth, we are supporting our enterprises, which are at different stages of readiness, to increase AI adoption and undertake AI-driven transformation to raise productivity and innovation. We are also supporting our workers to build the skills and confidence to work with AI, take on redesigned roles and move into new and higher-value opportunities.
We have observed early signs of progress. A recent Ministry of Manpower's survey found that around three in 10 firms had adopted AI. Of these, about seven in 10 reported improvements in worker productivity 1 . AI is also complementing rather than replacing labour, with more firms redesigning existing roles and creating new AI-related jobs, rather than reducing headcount. This is consistent with a recent Ministry of Trade and Industry's study, which found that firms using AI saw higher revenue and total employment, with those that deepened their AI capabilities seeing even higher gains 2 .
Beyond economy-wide AI adoption, we are building up our research, engineering and commercialisation capabilities. As announced at Budget 2026, we are launching National AI Missions in Advanced Manufacturing, Financial Services, Connectivity and Healthcare. We will work with industry and research partners to translate the AI research into deployable applications, drive AI-enabled transformation at scale and build new businesses. Alongside this, leading AI companies, including Google DeepMind and OpenAI, have also set up research labs in Singapore to anchor substantive research and engineering work here. These further strengthen our local research ecosystem, create high-quality jobs for Singaporeans and build on our broader investments in AI compute and talent.
The Government will continue to monitor the impact of AI on our economy, including enterprise-level AI adoption and its effects on firm performance. Through the National AI Council, we will coordinate our national AI efforts and ensure that AI-driven growth benefits the wider economy.