No indication of AI displacing jobs widely, as firms using AI see productivity gains: MOM report
Early evidence suggests AI is complementing rather than displacing labour in Singapore, though AI adoption at work still remains low.
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SINGAPORE: There is no indication of widespread job displacement by artificial intelligence, and worker productivity has improved in a majority of firms using the technology, according to a study by the Ministry of Manpower (MOM) on Thursday (Apr 30).
AI adoption remains low in Singapore, with 71.5 per cent of firms yet to integrate the technology, according to the ministry's inaugural report on the technology's adoption by firms.
The report was based on a survey of 2,560 firms employing close to 500,000 workers conducted between January and March.
MOM said the survey was conducted to better understand the limited and uneven adoption of AI among firms in Singapore, despite the country's strong digital readiness.
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Headcount reductions were reported in 6.2 per cent of firms that are actively implementing AI or piloting its usage. Lower hiring activity attributable to AI was reported by 8.5 per cent of the respondents.
It was more common for the firms to see adjustments to existing roles, with 18.9 per cent of respondents reporting that they redesigned job functions after adopting AI.
Creation of new AI-related jobs was also reported by 13.9 per cent of the firms, indicating emerging demand for specialised skills, said MOM.
Among firms using AI, 70.7 per cent saw an increase in worker productivity. Firms also reported enhanced assisted decision making and increased innovation from using AI.
MOM said that early evidence suggests AI is "complementing rather than displacing labour".
"AI is reshaping work and creating opportunities to improve productivity," said the ministry.
"The key challenge is whether firms and workers can keep pace: smaller firms risk falling further behind on adoption, while workers who do not upskill risk being left behind as AI transforms our day-to-day tasks."
UNEVEN AI ADOPTION AND EXPOSURE
With limited AI adoption among firms, Singapore trails behind other economies like China, Denmark, Hong Kong, Finland and Sweden on this measure, according to the report.
The survey found that AI adoption is uneven among firms of different sizes and among different sectors.
Adoption rates ranged from 23.9 per cent in smaller firms with fewer than 25 employees, to 76.4 per cent in larger firms with 501 or more employees. Larger firms also had deeper levels of AI integration.
Smaller firms cited high implementation costs and lack of skilled personnel or expertise as key obstacles to adoption.
There were also sectoral differences, with AI adoption rates highest in digitally intensive and knowledge-based sectors like information and communications, professional services, and financial and insurance services.
"These sectors are characterised by jobs with a higher share of tasks that can be automated or augmented by AI, in the areas of software development, systems analysis and data analytics, for example," said MOM.
"The digitally fluent professional, manager, executive and technician workforce in these sectors are well-positioned to adopt and work alongside AI tools effectively."
In contrast, customer-facing and labour-intensive sectors like retail trade and food and beverage services adopt AI at lower rates.
"In these sectors, a larger proportion of tasks involve physical interaction or service delivery, which are less immediately amenable to AI deployment," said MOM.
AI exposure also differs among different occupational groups.
Higher-skilled professionals, particularly those performing analytical and cognitive tasks, are more likely to experience changes in the composition of their tasks due to AI, the survey found.
In contrast, roles involving routine physical tasks, such as production and transport, see more limited exposure to AI.
"Importantly, where exposure exists, it has generally been associated with productivity improvements rather than job displacement," said MOM.
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