Singapore Budget 2025: Boosting workforce development and AI-driven innovation

Singapore’s Budget 2025 has reinforced the nation’s commitment to workforce development and lifelong learning, with a strong emphasis on AI and skills transformation.

Announced by Prime Minister and Finance Minister Lawrence Wong on February 18, the Budget introduces key initiatives such as expanded training allowances, an enhanced SkillsFuture Workforce Development Grant, and a revamped SkillsFuture Enterprise Credit scheme.

These measures aim to ensure that employees in Singapore remain competitive in a rapidly evolving job market while equipping organisations with the resources needed to navigate digital transformation.

A core feature of this year’s Budget is the increased support for mid-career and lower-wage employees through financial incentives for part-time and full-time upskilling programmes. Additionally, organisations will benefit from streamlined funding mechanisms and greater backing for employer-led training efforts.

With AI and digital skills taking centre stage, industry leaders have shared their perspectives on how these initiatives will shape the future of work in Singapore.

AI as a driver of workforce and business transformation

Fabio Tiviti, Group Vice-President of Asia-Pacific and Japan Field Operations at Workday, underscored AI’s role in maintaining Singapore’s competitive edge, stating, “AI will continue to be a key driver in nurturing Singapore’s competitive advantage. Such technologies are catalysts for economic growth and business productivity setting in the stage for Singapore to strengthen its position as a global hub for innovation.”

“The new Enterprise Compute Initiative will therefore play an integral role in enabling organisations with the capabilities to swiftly make the relevant pivots and integrate AI into the various business processes and systems.”

He emphasised that AI should augment rather than replace human employees, with AI agents expected to amplify office performance and productivity while allowing employees to focus on higher-value tasks.

Peter Chambers, Managing Director, Asia-Pacific at AMD, echoed this sentiment, noting that “the AI space holds tremendous lucrative opportunities for Singaporeans and local organisations. We are just at the start of the AI super cycle, and the next five years of advancement will not be driven by a single organisation, product, or vision but by open ecosystems and deep industry partnership.”

He pointed to the National Productivity Fund top-up and the Enterprise Compute Initiatives as critical in equipping organisations to leverage AI technologies and enhance talent retention. “It would be prudent for business leaders to view the announcements as temporary relief and use this opportunity to focus on fostering the local talent ecosystem while addressing organisational challenges to ensure the longevity of their organisations in today’s AI-powered landscape,” he added.

READ MORE: Singapore announces new funding measures to support workforce transformation

Lucus Lu, Head of Asia at Zoom, highlighted the necessity of AI adoption, and said, “AI adoption is no longer just an advantage—it’s a necessity. The Enterprise Compute Initiative is a timely step in helping more organisations in Singapore move beyond off-the-shelf solutions to custom AI tailored to their needs.” He added that integrating AI seamlessly into operations will help organisations stay productive, competitive, and attractive to top talent.

SkillsFuture and workforce upskilling as competitive imperatives

The government’s expanded SkillsFuture initiatives have been widely welcomed by business leaders. Eklavya Bhave, Head of Asia-Pacific at Coursera, lauded Singapore’s continued investment in workforce skilling, emphasising that the new SkillsFuture Workforce Development Grant and redesigned SkillsFuture Enterprise Credit will “streamline funding access and encourage organisations to invest in employee upskilling.”

He noted that with the rise of digital and generative AI (GenAI) skills, these initiatives will be instrumental in closing the skills gap, particularly for older employees. Singapore is already leading South-East Asia in GenAI learning, with a 240% surge in enrollments on Coursera in 2024, he added. “This is especially pertinent with Singapore’s plans to triple its AI talent pool over the next few years, strengthening the nation’s pivotal position as an AI innovation hub.”

Jessica Zhang, Senior Vice-President, Asia-Pacific, ADP, underscored the importance of workforce adaptability, noting that “Singapore’s economic competitiveness depends on how well all segments of its workforce adapt to rapid technological change.” She cited ADP’s People at Work 2025 report, which found that only 23% of employees in Singapore feel equipped to progress in their careers. Zhang encouraged organisations to take advantage of the enhanced upskilling initiatives, investing in AI, digital skills, and innovation-driven training to futureproof both employees and organisations.

As Singapore moves towards an AI-driven future, the Budget’s emphasis on upskilling and AI integration highlights the importance of equipping employees with the skills needed for the future. While organisations will need to take proactive steps to maximise these initiatives, the government’s commitment to lifelong learning and talent development positions Singapore as a leading hub for innovation and workforce resilience.