Singapore's Budget for the next financial year was delivered on 16 February by Deputy PM and Minister for Finance Lawrence Wong. Wong, who is also the Chairman of the Monetary Authority of Singapore (MAS), shared how the government is tackling immediate concerns and taking steps to build a shared future with a stronger, more united nation in mind.
Growth is a focus, Wong said, though there is a limit to growth rates because of tighter constraints for land, labour, and carbon. "But by focusing on productivity and innovation, we can push the frontier and grow at an average of about 2% to 3% each year over the next decade," he said.
Wong later summed it up: "We are taking concrete steps to keep our economy competitive and vibrant, and to help our enterprises seize new opportunities. We will do whatever it takes to secure our place as one of the leading economic hubs in the world, known for our innovation, dynamism, and deep capabilities, with good jobs and opportunities for our people."
Some of the initiatives impacting the technology industry include:
Help for technology investments
Refundable Investment Credit
This is a tax credit with a refundable cash feature that is designed to support high-value and substantive economic activities, Wong said.
"Essentially, this new tax credit will help us stay competitive and attract investments from global companies with the right knowhow, and create good jobs for Singaporeans," he said.
The credit will be awarded on an approval basis, through the Economic Development Board (EDB) and EnterpriseSG. High-value and substantive economic activities that would qualify for the credit include:
- Investing in new productive capacity (e.g., new manufacturing plant, production of low-carbon energy)
- Expanding or establishing the scope of activities in digital services, professional services, and supply chain management
- Expanding or establishing headquarter activities, or centres of excellence;
- Carrying out research and development (R&D) and innovation activities; and
- Implementing solutions with decarbonisation objectives.
S$2 B allocated to the National Productivity Fund
The fund was launched in 2010, to increase business' competitiveness. The additional finds will support investment promotion efforts, Wong said.
"The S$2 B top-up to the National Productivity Fund is an important step to enhance our overall productivity and workforce quality to stay competitive in this digital era. It will provide local businesses including SMEs with the right foundations to adopt new innovations that supercharge their productivity and efficiency. Such support is also essential to allow local SMEs to maintain business viability and remain competitive," said Sujith Abraham, Senior VP and GM, ASEAN for Salesforce.
A commitment to innovate
S$3 B investment in the Research, Innovation and Enterprise 2025 (RIE2025) plan
The plan was launched in 2020 to enable Singapore’s development into a knowledge-based, innovation-driven nation with an initial commitment of S$25 B. "This will sustain our investments in research, innovation, and enterprise at about 1% of GDP. The additional resources will go towards research and related investments in national priorities such as advanced manufacturing, sustainability, the digital economy, and healthcare," Wong shared.
He emphasised that this is a long-term strategy that will help to "develop a critical mass of capabilities, ideas, and talent". "They enable us to sharpen our competitive edge globally, as a knowledge-based and innovation-driven economy," he said.
Innovation: focus on AI
At least S$1 B to be invested in AI
Wong called AI a 'critical emerging technology'. "It is a general-purpose technology, like electricity, the internal combustion engine, the computer, or the Internet. It has the potential to transform a wide range of industries, and to enhance productivity across many existing processes, from drug discovery, to organising warehouses, or driving vehicles," he noted.
"Singapore is already recognised as a serious player in AI development. We aim to go further – to build new peaks of excellence, and crowd in private sector investments. We have set out the plans to do so in the National AI Strategy 2.0.
"To support this strategy and further catalyse AI activities, I will invest more than S$1 billion over the next five years into AI compute, talent, and industry development."
The investment, Wong said, would go towards securing the chips that AI runs on, as well as to help attract more AI centres of excellence to be set up in the country.
Singapore’s National AI Strategy 2.0 was unveiled in December 2023.
National Broadband Network upgrade
Wong said the aim is to enable mass market access to broadband speeds of up to 10 Gbps in the second half of the decade, supporting the push for AI leadership. "This is 10 times faster than the broadband speed in most homes today. This also ensures that our connectivity infrastructure will be able to support technologies like AI and immersive media, as they become more pervasive in the future," he said.
SGTech acknowledged the government's commitment to advancing AI development. "The provisions concerning AI are in alignment with our observations, indicating a notable surge in demand for AI skills, talents, and infrastructures.
"SGTech welcomes the extra S$1 billion investment for AI development. This significant allocation underscores Singapore's foresight in recognising the transformative potential of AI across sectors. Such a substantial investment demonstrates Singapore's dedication to remaining at the forefront of technological innovation and also signifies its commitment to foster a robust ecosystem conducive to AI research, development, and adoption," stated the association in an analysis of the Budget.
"SGTech is equally enthused about collaborating with the government to actualise our shared vision to establish and position Singapore as a centre of excellence in AI. We stand ready to engage in cooperative efforts that bolster this initiative, leveraging our members’ expertise and resources to advance Singapore’s position as a global technology hub."
Mohan Veloo, VP Solutions Consulting, Zscaler, said that the Budget announcement reflected the nation's continuous proactive stance on regulating emerging technologies, particularly AI.
"As AI, machine learning, and AI adoption increases across industries, it’s important to balance the risks of using these tools against those of banning it. Alongside the nation’s plan to work with leading companies to set up AI centres of excellence and spur innovation, there is also a need for hierarchical, transparent governance of AI initiatives, and understanding the critical role of risk management," he said.
"Recent initiatives such as the AI Verify Foundation and Project Mindforge facilitate the adoption of responsible AI and promote best practices and standards for AI. Most recently, IMDA has also expanded on the existing framework covering traditional AI to create a new framework: The Model AI Governance Framework for Generative AI. This will likely pave the way for future regulations around the National AI Strategy 2.0 and other AI developments, seeking a systematic and balanced approach to address concerns while continuing to facilitate innovation.
"Acknowledging its transformative potential alongside inherent risks and ongoing developments, there is a necessity for consistent principles to foster trust and confidence in AI utilisation – one that enables end-users to use AI confidently and safely."
“While the world is still deliberating how to best navigate the opportunities and risks of AI, the government’s decisive move under the National AI Strategy 2.0 to increase an additional S$1 billion investment for critical advanced AI chips and quickly anchor a community of AI centres of excellence, in addition to its previously announced ambition of tripling Singapore-based AI practitioners, is especially laudable.
"It is bold and holistic moves like these, which will put Singapore ahead in the new economy and provide a further boost for our next phase of economic growth,” said Lim Kexin, Partner specialising in Entrepreneurial and Private Business Tax, PwC Singapore.
"It is encouraging to see a continued focus on supporting businesses and the workforce as part of this year’s Budget announcements," added Abraham. "Rapid AI innovation over the past year has drawn attention to the importance of productivity and workforce efficiency by surfacing new ways of working.
"The government’s planned investment of S$1 B over the next five years to augment AI technology and talent will democratise access to digital technologies, spur AI innovation and accelerate business transformation. AI is no longer a nice-to-have but an imperative for all businesses to implement and enable their workforce to work with if they don’t want to get left behind."
New National Cybersecurity Command Centre
There is to be a new National Cybersecurity Command Centre at the Punggol Digital District to better coordinate cyberdefence operations, improve collaboration with industry and academia, and spur cybersecurity innovation. "This will improve our capabilities to monitor, detect, and coordinate our defences against cyberthreats," Wong said.
SGTech has proposed some next steps to this development. "More can be done in order to prepare Singapore in the face of increasingly sophisticated cyberthreats, and SGTech believes that the implementation of a Chief Trust Officer should be a priority to build a comprehensive, resilient and secure digital environment.
"SGTech proposes to work together with industry partners and relevant government agencies, a detailed plan should be drafted to consider more targeted investments, partnerships with the private sector, and initiatives to raise awareness about cybersecurity best practices among citizens and businesses," the association said in an analysis of the Budget.
Jessie Xia, Co-Chair, SGTech Digital Trust Chapter, added: “We are heartened to see Singapore’s commitment to advancing artificial intelligence and fully support the government’s move to establish a National Cybersecurity Command Centre to defend against cyberthreats. We urge the government to explore trust-related technologies as a key growth and innovation driver, and to invest more to fortify Singapore's trusted status as a global leader in cybersecurity and digital trust.”
Abraham said: "The S$1 B allocation towards AI which also includes secure implementation of the National AI Strategy 2.0 demonstrates the government’s commitment towards fostering a trusted and responsible AI ecosystem. Trust is well and truly in the foreground today and will be a critical differentiator for businesses in the era of AI. As AI adoption grows, consumers must be reassured that their data is safe, and that technology is being used for good."
Support for increased competitiveness
New SkillsFuture Level-Up Programme
The SkillsFuture Level-Up Programme seeks to support mid-career Singaporeans aged 40 and above in undertaking significant reskilling and upskilling to boost their prospects in their current job or pivot to a new career. It comprises:
- S$4,000 SkillsFuture Credit (Mid-Career) Top-Up
- Support for mid-career Singaporeans to pursue another subsidised full-time diploma; and
- SkillsFuture Mid-Career Training Allowance.
The top-up can only be used for training programmes with better employability outcomes, Wong said, ensuring "better employment outcomes after they have completed their training".
SGTech said the S$4,000 top-up of the credits would "effectively incentivise mid-career workers to update their skills and advance in their careers". "This initiative will also empower workers to pursue more rewarding and high-paying career opportunities. This development is in line with SGTech's Career Conversion Programme, which targets mid-career professionals, managers, executives, and technicians for skills conversion, facilitating their transition into new occupations or sectors with promising prospects and advancement opportunities. In addition, SGTech is also happy to see the government support talent capabilities in their AI development initiatives," the association noted in its Budget analysis.
"While this is a much-welcomed development, we believe that to improve employability, it is crucial to help SMEs be guided on how they can hire and develop talents based on skills, and not just traditional qualifications. That is why, to further this government investment, we are advocating for trade associations and chambers to be the connectors in creating guides, spreading awareness, and setting up programmes to make this happen.
"We also suggest that agencies like Infocomm Media Development Authority, SkillsFuture Singapore, and others work together with the private sector in establishing standards and giving recognition for learning that happens on the job. We propose to form a public-private action taskforce to figure out what those standards should be and how to include new tech skill sets through a national skills taxonomy."
Benjamin Mah, Co-Chair, SGTech Talent Steering Committee, also said: “We applaud the government's decision to provide a SkillsFuture credit top-up of $4,000 to all Singaporeans aged 40 and above. This initiative underscores the commitment to fostering a skilled workforce, particularly in upskilling and reskilling mid-career professionals.
"SGTech believes that directing this top-up towards selected programmes is essential to equip the workforce with the skills needed to adapt alongside evolving technology. SGTech stands ready to collaborate closely with industry partners and government agencies to develop strategic and well-defined approaches to tech talent development across all sectors, especially in AI, where training and equipping the workforce to leverage AI tools will be vital for their success.”
“The new S$4,000 SkillsFuture Credit is the proverbial good seed that DPM is planting to enhance Singapore’s workforce ecosystem. Changes (in our jobs) is the new constant. The upgraded scheme encourages more senior workers to upgrade and keep their skills ahead of the job curve," said Chris Woo, Asia Pacific and Singapore Tax Leader, PwC Singapore.
"It has been said: 'Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime'. The 2024 Budget is focused not only on teaching Singaporeans how to fish, but also how to farm fish to increase production and bring the fish to market."
With AI taking a front seat across businesses and for the economy’s success, a right-skilled workforce is critical, Abraham said. "The extension of SkillsFuture Enterprise Credit and the introduction of the new SkillsFuture Level-Up Programme for mid-career workers will ensure inclusivity and accessibility for the entire workforce. Today, our studies show lack of training is preventing 38% of Singapore workers from using gen AI more at work. This skills gap will only grow wider with time, as the profile of jobs will augment as AI becomes more pervasive.
"These incentives will encourage workers to upskill themselves in areas such as digitisation and AI to help Singapore develop a future ready workforce. Upskilling is a task and responsibility for the entire ecosystem. Salesforce has long committed to this training imperative, and we will continue to work with our ecosystem of partners and customers to provide digital training and open pathways to job opportunities. The value of independent learning should not be overlooked either. There are many free online learning platforms such as Salesforce’s Trailhead that offer certifications and micro-credentials for anyone looking to upskill and improve their employment opportunities."
Eileen Chua, MD of SAP Singapore stated: "The increasing need for employees' training in AI, reflects on Singapore's Budget 2024 focus and anticipates an ever-evolving business landscape. With the rising demand for AI expertise in this digital economy, building skills-centric organisations where expertise and knowhow take precedence over roles and titles will improve business agility and employee experience. In order to achieve this, companies must have a holistic view of their workforce and ignite potential by providing opportunities for growth and development."
Enhanced Partnerships for Capability Transformation (PACT) scheme
The government is committed to helping Singapore businesses form win-win partnerships with multinational enterprises, or MNEs.
Wong highlighted the experience of local company Zincode, which improved its image-processing capabilities with the help of the Smart Manufacturing Joint Lab - a collaboration between A*STAR, Rolls-Royce, and Singapore Aero Engine Services. Zincode then became an approved partner for inspection work at the Rolls-Royce manufacturing facility in Singapore in addition to acquiring new opportunities from others.
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| Source: Zincode and the Smart Manufacturing Joint Lab. With the help of the Smart Manufacturing Joint Lab, Zincode is now a Rolls-Royce partner and has raised revenues from new opportunities with other parties. |
"We want to help more companies like Zincode raise their capabilities and win new opportunities. Today, we have the Partnerships for Capability Transformation (or PACT) scheme. This supports collaborations between larger companies and SMEs, in the areas of supplier development and co-innovation.
"I will enhance PACT to support partnerships in more areas – including capability training, internationalisation, and corporate venturing," Wong said.
"With the enhanced PACT, we aim to help more of our local firms plug into global supply chains, compete in markets abroad, and grow to become industry leaders in their own right."
Revamped Energy Efficiency Grant (EEG)
Wong noted that sustainability is often a must-have when it comes to working with MNEs. The EEG aims to support businesses in their sustainability journey by cofunding investments in energy-efficient equipment. When it was launched in 2022, it focused on companies in the food services, food manufacturing, and retail sectors. This year, the EEG will be expanded to more sectors, as well as for data centres.
Existing grant schemes for the adoption of energy-efficient equipment will also be streamlined and subsumed under the EEG, including the National Environment Agency's (NEA’s) Energy Efficiency Fund.
Expansion of the Enterprise Financing Scheme
The support for green loans under the Enterprise Financing Scheme has been enhanced.
- The maximum working capital loan quantum will be permanently raised to S$500,000.
- The enhanced maximum trade loan quantum is enhanced till 31 March 2025.
"While these initiatives support a greener economy, SGTech believes it will be necessary to work together with industry partners and relevant government agencies and take further action in establishing industry sustainability reporting standards, alongside a national directory of sustainability regulations, guidelines, standards and certifications for all, allowing information to be accessible and consistent across all industries," commented the association.
In addition, Gavin Chua, Co-Chair, SGTech Sustainability Steering Committee, said: “We are pleased to see a focus on the commercial importance of voluntary sustainability compliance. SMEs in particular, face a pressing need to be ‘sustainability-ready’ in order to collaborate with multinational enterprises who are stringent with ensuring alignment throughout their value chains.
"The additional support and funding outlined in Budget 2024, including enhancements to the Enterprise Financing Scheme and the Energy Efficiency Grant, are opportune. We encourage the government to foster stronger partnerships and leverage technology to collectively address the challenge of striking a nuanced balance between digital growth and environmental goals. Additionally, there is also a need to create industry-standard reporting guidelines for consistency.”
Terry Maiolo, VP and GM, APAC, OVHcloud noted that escalating demand for digital services and increasing adoption of emerging technologies such as AI has led to "an unprecedented amount of data generated will need to be stored and processed".
"The voracious appetite for energy by data centres... is further heightened in warmer tropical climates where increased energy is required for cooling stored data. These factors are driving businesses to intensify their sustainability strategies," he said.
"As Singapore scales its digital ambitions, balancing the carbon impact of its data centres becomes imperative. Alongside government initiatives – such as establishing sustainability standards for optimising energy efficiency in data centres and a data centre testbed aimed at developing energy-efficient cooling technologies for tropical environments – there is continued focus on sustainable growth and low carbon emissions which is influencing the government’s discerning approach to the construction of new data centres.
"Fortunately, achieving sustainability objectives does not necessitate compromising digital advancement. Greener data centres complemented by water cooling technology for optimal temperature maintenance without a significant increase in energy usage, not only provides robust compute capabilities but also minimises environmental impact. Utilisation of carbon calculators for a more quantifiable metric to manage, reduce, or offset energy consumption is also of critical importance. Together, these initiatives will foster a more responsible and resource-efficient digital economy. It is only through a collective effort from all players – businesses, cloud providers and the government – will the nation’s net-zero ambitions be met."
Comments, conclusions, and calls for more
Industry observers had a lot of praise for the Budget as a whole.
Jess O'Reilly, Area VP for Asia at UiPath, noted that a resilient economy that ensures ample employment opportunities will be key to actualising Singapore's vision for the future. "We are encouraged by the government’s plan to allocate over S$1 billion over the next five years to take Singapore further in its National AI Strategy 2.0. Coupled with initiatives to plug skill gaps, foster private-public partnerships, and combine education and innovation, Singapore can prime the labour force for growth in the new economy," she said.
"More importantly, democratising innovation will empower workers across all skill levels to embrace digital transformation, and to achieve Singapore’s ambition of becoming a global business and AI hub. To do this, Singapore must turn AI potential into AI results by seamlessly integrating intelligence into everyday operations, automating all knowledge work, up-levelling employees to create new value, and revolutionising entire industries.
"Hence, it is heartening to hear that the Singapore government continues to support digital upskilling and access to learning opportunities with the extension of the SkillsFuture Enterprise Creditand the new SkillsFuture Level-Up programme. These initiatives will be critical to equip the Singapore workforce with the skills to harness new technologies, to optimise operations and drive further innovation across industries."
Chua Hock Leng, Area VP, ASEAN and Greater China, Pure Storage said:
"Pure Storage is delighted to see the Singapore government’s continued
support for homegrown companies as they strike a balance between sustainability and digitalisation in an AI-powered world.
"With the carbon tax currently set at S$25 per metric ton of CO2
equivalent, organisations should conduct a thorough reassessment of
their infrastructure and identify areas where ecofriendly changes can be
implemented in line with Singapore’s Green Plan 2030. As AI
solutions and applications necessitate significant computing power and
storage, balancing high-performance data demands and energy requirements
will be key to maximising the benefits of AI.
"It is encouraging to see that the Singapore government is allocating an additional S$2 billion to the National Productivity Fund to better support businesses in bolstering their infrastructure and technology to strengthen their sustainability commitments."
"With Singapore focusing on new AI uses to transform the economy in line with National AI Strategy 2.0, outdated systems can present roadblocks to fully harnessing the transformative power of AI and machine learning (ML).
"Small and medium enterprises (SMEs) with limited budgets are even more pressed to invest in smart yet green data infrastructure to ensure that they are positioned for success in the new digital economy. They grapple with the challenge of modernising their data infrastructure to support large AI data pipelines, all while striving to align with the green vision. The Singapore government continues to empower SMEs to adopt green solutions by extending the eligibility criteria of the Energy Efficiency Grant and expanding the scope of the Enterprise Financing Scheme," commented Chua.
"Through incentivising green technology adoption, the government can help Singapore businesses overcome barriers to modernisation and drive inclusive digital transformation to propel further growth and innovation."
Sam Liew, Chief Executive, Government Strategic Business Group, NCS, saw an affirmation of the government’s commitment to investing in human capital and building an empowered and resilient technology workforce.
"We have been partnering with the government and clients to harness technologies such as AI to transform workplaces and businesses. We see that more urgently than ever, our workforce needs to continuously reskill and upskill to stay relevant and competitive, as DPM Lawrence Wong pointed out in his Budget statement. The initiatives and measures introduced in the Budget, such as additional investments into AI compute and the new SkillsFuture Level-Up Programme, will be critical in strengthening Singapore's tech talent ecosystem," Liew said.
"S$1 billion investment into AI development with another S$3 billion set aside for R&D in the Research, Innovation and Enterprise 2025 plan will further provide more opportunity and support to enable tech talents to harness technology to make a positive impact not just in Singapore, but also on a regional and global scale.
"At the heart of technology is people. We will continue to work closely with the government and institutes of higher learning to nurture a robust pool of local tech talent in Singapore. Focusing on our talents, both present and future, is key to advancing our community, as the name of this year’s Budget aptly suggests, 'building our shared future together'."
In an analysis of the Budget SGTech commented: "As Singapore is projected to continue experiencing economic growth, SGTech is heartened to see the government providing customised support to strengthen our local businesses and help SMEs grow. The new S$1.3 billion Enterprise Support Package and enhancements to the Enterprise Financing Scheme will ease financial burdens faced by smaller firms and help businesses thrive, especially in a more challenging environment.
"In addition, the S$2 billion top-up in the National Productivity Fund will help to anchor more quality investments and improve the productivity of our workforce, strengthening our nation’s competitiveness for the years ahead," noted the association in an analysis of the Budget.
"SGTech is also pleased to hear greater government support for partnerships between multinational enterprises, large companies and SMEs. This support will allow SMEs to meet higher standards to forge partnerships and accelerate business transformation in our economy."
Wong Wai Meng, Chair, SGTech, further said: “This year’s focus on sustainability, talent and artificial intelligence, reflects the rising need to bolster industries with the relevant skills and support to thrive in an evolving technological landscape.
"As we navigate the intersection of innovation and responsibility, let us invest in plans and a vision that fortifies resilience, promotes inclusivity, and positions us as leaders in responsible governance. This budget transcends mere numbers; it is about shaping a trusted, sustainable, and innovative future for Singapore. SGTech is eager to collaborate with the government and industry partners to ensure that Singapore remains at the forefront of technological advancement.”
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