AS GLOBAL trade becomes more fragmented and uncertainties grow in 2025, Singapore is increasingly vulnerable to structural shifts in the global economy. These external pressures, coupled with a tight labour market, present a challenge to Singapore’s growth prospects. As the nation celebrates 60 years of remarkable growth and transformation, the focus is on navigating the path ahead.
Labour tightness means forgone economic output. A McKinsey manpower market report estimated that gross domestic product in 2023 could have been 0.5 to 1.5 per cent higher in the advanced economies if employers had been able to fill their excess job vacancies. In Singapore, the labour shortage is pronounced, with 164 job vacancies for every 100 jobseekers as at December 2024. The need to drive productivity gains is therefore patently clear.
Combining productivity growth with meaningful work
However, in addition to productivity, we must also emphasise the long-term creation of good jobs in order to drive growth. In a recent speech, President Tharman Shanmugaratnam urged the audience to think about productivity more broadly, including tapping artificial intelligence (AI), so as to “maximise our potential to create good jobs for everyone who wishes to be in the workforce”. Those displaced by creative disruption should have opportunities to transition “not just into flipping burgers, but into new jobs in other sectors”, he said.
Singaporeans must be engaged in meaningful work that enables them to have fulfilling careers. This includes work they are passionate about and that offers opportunities to stretch themselves and achieve personal growth. For example, an educator’s role should be designed to focus on the heart of effective teaching such as developing and adapting lesson plans, 1:1 student interactions and providing individualised support versus administrative tasks such as record-keeping and coordination.
Today, desk workers globally report spending a whopping 41 per cent of their time on tasks that are “low value, repetitive or lack meaningful contribution to their core job functions”, according to research by Slack. There is a clear opportunity for AI and automation tools to help refocus energy toward high-value activities.
In Singapore, AI adoption could unlock up to S$198.3 billion in economic benefits by 2030. However, it is in solving the twin issues of productivity and meaningful work where digital labour can truly shine.
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The digital labour revolution enables AI agents – autonomous software tools that perform specific tasks on behalf of users – to augment the human workforce. It will be key to reshaping the labour landscape in Singapore, driving long-term growth, and creating meaningful work for all Singaporeans.
Realising real productivity, beyond co-pilots and virtual assistants
AI agents are more than co-pilots. They present a transformative opportunity for Singaporean businesses, offering a digital workforce that can collaborate with humans to streamline operations, boost productivity, reduce costs, drive scalability and foster innovation.
Businesses would be able to augment human capabilities with reliable, autonomous AI agents that operate 24/7, significantly enhancing productivity, efficiency, innovation, and competitiveness. In fact, human resource leaders in the Asia-Pacific anticipate a 37 per cent rise in employee productivity and a 25 per cent reduction in labour costs with agentic AI, according to our recent Digital Labour research.
With an AI agent as their right-hand man, workers can now look forward to new opportunities for strategic work. In this landscape, re-skilling is key. This includes building not just hard skills in technology and AI, but also doubling down on soft skills such as critical thinking, adaptability and empathy.
For businesses operating in a tough macroeconomic environment, AI agents can help drive topline growth and deliver superior customer experience. For example, Singapore Airlines will use AI agents to help streamline its customer service operations and free up human representatives to focus on providing personalised attention to customers.
AI agents open up a plethora of opportunities for Singapore small and medium-size enterprises (SMEs) as well. A DBS survey found that 60 per cent of SMEs are looking to expand beyond Singapore in 2025. For these resource-light businesses, AI agents can be the catalyst that can help them make the leap to new markets.
For instance, a retailer expanding to new markets can leverage agents to efficiently scale customer service and manage the jump in customer inquiries. Agents can take over time-intensive tasks such as responding to customers, modifying orders, issuing returns and managing inventory without human intervention.
Bridging the imagination gap and embracing agentic transformation
Truly capturing the transformative power of AI agents demands a deliberate leap beyond incremental improvements. Singaporean business leaders must actively cultivate a visionary mindset, moving beyond simply applying AI to existing workflows. The initial focus on automation risks overlooking the profound reshaping of work and business models that agentic AI enables.
Recognising AI agents not just as tools but as a disruptive force is crucial. While agents offer unprecedented scalability, they also present a risk: The rapid displacement of traditional business models by agile newcomers. To counter this, Singaporean enterprises must proactively rewire core processes and functions to forge effective human-agent teams.
This strategic reimagining of work, centred on upskilling Singapore’s workforce, will be key. By placing human needs – both as employees collaborating with AI and as consumers interacting with AI-driven offerings – at the heart of this evolution, we can unlock truly dynamic and sustainable new business models.
Time for decisive action
Agentic AI offers Singapore businesses the opportunity to finally break free from the manpower limitations that have plagued them for decades. The next 60 years will be about building resilient businesses, unlocking new productivity frontiers and fostering innovation. AI agents offer a unique pathway to achieve this, creating not just efficiency but meaningful work.
Now is the time for decisive action. Business leaders must move beyond incremental adoption and embrace a visionary approach to integrating AI agents into their core operations. Policymakers should continue to proactively foster an environment that encourages innovation while prioritising reskilling and workforce transformation.
By collaboratively seizing this agentic opportunity, Singapore can forge a future of sustained economic growth, enhanced competitiveness, and a thriving workforce empowered by the limitless potential of digital labour.
