Singapore

IT Market Trends

Article at a Glance

Singapore’s IT sector is experiencing strong growth, driven by rapid digitalisation, AI adoption, cloud expansion, and infrastructure upgrades, while navigating talent shortages and rising costs.

Market Outlook: Singapore’s ICT market is valued at SG$ 90.48 billion in 2025 and projected to reach SG$ 172.79 billion by 2030, reflecting a CAGR of 13.81%.
Smart Nation 2.0: Government initiatives continue to prioritise inclusive growth, digital trust and community resilience through technology-driven programs.
AI Accleration: Generative and agentic AI adoption is a strategic priority, supported by the National AI Strategy 2.0, which includes multi-billion-dollar funding, talent development, sandbox establishment, and cross-sector partnerships to bolster R&D.
Cybersecurity Imperatives: Cyberattacks have nearly doubled in the past two years, prompting organisations to adopt zero-trust frameworks and AI-driven threat detection to strengthen resilience.

Energy–Efficient Data Centres: Sustainability is shaping data centre management strategies, as the Green Data Centre Roadmap aims to deliver energy savings of at least 30% through advanced cooling and efficiency measures.
Cloud and Network Modernisation: Hyperscale providers are investing heavily in local infrastructure; hybrid cloud and SD-WAN adoption are accelerating to improve flexibility and cost efficiency.
Talent Strategy Shift: 43% of business leaders are concerned about future talent gaps, and only 30% feel confident in long-term skills readiness. Organisations are moving towards skills-based hiring to improve agility and bolster workforce productivity.

The Change Agent

Singapore’s IT landscape is underpinned by accelerated digital transformation, the proliferation of AI and cloud computing, and significant infrastructure enhancements. Bringing the Smart Nation 2.0 vision to life, flagship government initiatives are aiming to leverage “technology for the greater good” – fostering inclusive growth, strengthening communities, and building trust among Singaporeans. A heightened focus on bridging cybersecurity gaps, advancing data analytics, and bolstering AI/ML adoption is shaping strategic priorities as organisations navigate evolving workforce dynamics and regulatory complexity.

Valued at SG$ 90.48 billion in 2025, Singapore’s ICT market is projected to reach SG$ 172.79 billion by 2030, representing a 13.81% CAGR (2025–2030). Key growth drivers include the rollout of 5G-enabled IoT applications, quantum innovation, hyper-digitalisation across the financial services, technology, and healthcare sectors. Cloud service providers are expanding local capacity to meet rising demand, while SMEs are increasingly adopting SaaS and PaaS solutions to boost agility and cost-effectiveness. However, acute skills gaps, supply–demand imbalances in local and expatriate talent, rising living costs, and constraints in power distribution and energy consumption present challenges that demand urgent attention.

Singapore’s IT market is rapidly growing, with AI adoption driving hyper-digitalisation at speed. Organisations that align technology investments with agile talent will lead as hybrid cloud and sustainability-led data centre strategies become critical.

Jon Nutt, Vertical Director, TEKsystems Singapore

Our Perspective

1. AI Adoption at Full Throttle

With AI becoming a strategic priority, organisations across Singapore are reallocating budgets to accelerate adoption, investing in workforce training, and developing proprietary models for high-impact use cases. Implementation maturity varies by sector, with financial services advancing under strict governance while less regulated industries move quickly to deploy AI. The National AI Strategy 2.0 underscores Singapore’s commitment to advancing AI for broad societal benefit. Key initiatives include:

Funding and Research: Government funding, university-led research grants, and national upskilling programs to ramp up AI capability and capacity building.
GenAI Sandbox: Enabling 150+ SMEs to test generative AI prototypes, fostering experimentation and practical implementation.
Talent Development: Plans to triple the AI workforce and deliver pioneering breakthroughs strengthen Singapore’s leadership in digital innovation.
AI Trailblazers Initiative: Supporting 84 organisations, including major players like Visa, DP Architects, Ocean Network Express, and GSK, in exploring over 100 practical AI use cases.
Cross–Sector Partnerships: Collaboration between the Singapore Economic Development Board (EDB), Digital Industry Singapore (DISG), and global technology giants including Google Cloud, Microsoft, and AWS for empowering businesses to build in-house AI capability.

2. Mitigating Risks and Cybersecurity Challenges

Cyberattacks have surged from 11.1 million in 2022 to 21.9 million in 2024, prompting organisations in Singapore to urgently address vulnerabilities and strengthen their cybersecurity posture. Data breaches remain a serious concern, with more than 70% of organisations reporting incidents, resulting in 85% of customers abandoning a brand in the past 12 months due to declining trust. Email, cloud, and network security are among the most vulnerable areas, and reliance on external vendors amplifies risk, leading to financial losses and compromised multi-location operations. Rapid digitalisation is widening the attack surface as 5G, IoT, and cloud APIs create multiple entry points for malicious threat actors.

To counter these critical risks, businesses are adopting AI-powered threat detection for real-time risk identification and zero-trust frameworks that verify every user and device. Secure access service edge (SASE) architectures and AI-driven anomaly detection are gaining traction, supported by governance practices around data handling and compliance with PDPA and global standards. However, implementation is often slowed by fragmented legacy systems and regulatory changes. Nonetheless, cybersecurity is increasingly being recognised as a strategic imperative for boosting operational resilience and market confidence.

3. Transition Towards Energy–Efficient Data Centres

The demand for compute and storage continues to rise, but Singapore’s land and energy constraints require a disciplined approach to data centre management. Organisations are consolidating mission-critical workloads locally to maintain compliance and resilience, while deploying incremental capacity in neighbouring locations such as Johor. Sustainability has become a core consideration, influencing site selection and facility design through energy efficiency, advanced cooling technologies, and strict environmental metrics.

The Green Data Centre Roadmap has set the direction for sustainable growth, while the Energy Efficiency Grant (EEG) is supporting businesses by co-funding investment in energy efficient (EE) equipment. Complementing these efforts, the Singapore Standard on Energy Efficiency of Data Centre IT Equipment (SS 715:2025) aims to optimise data centre operations at higher temperature thresholds, targeting energy savings of at least 30%. With Singapore’s data centre capacity approaching near saturation at 1.4 gigawatts, prioritising sustainable growth and improving renewable energy efficiency will be mission-critical.

4. Cloud Computing and Network Modernisation

Singapore’s rapid digital transformation is a key catalyst for cloud adoption. The rise of AI-driven applications is creating demand for scalable storage and compute resources, reinforcing the appeal of cloud computing models. Significant investments by hyperscale providers such as AWS, Microsoft Azure and Google Cloud have strengthened regional infrastructure and fuelled market growth. AWS is investing SG$ 12 billion from 2024 to 2028, with planned investment in its existing cloud infrastructure set to double to more than SG$ 23 billion by 2028. This investment aims to boost cloud adoption, run workshops for over 100 enterprises to accelerate AI implementation, and upskill 5,000 individuals in AI each year.

Hybrid cloud architectures remain the preferred choice for large enterprises, offering a balance of security, compliance and operational flexibility, while smaller organisations increasingly turn to public cloud solutions to optimise cost and scalability. At the same time, network transformation is gaining momentum as SD-WAN replaces legacy MPLS infrastructure, delivering enhanced performance, centralised management and cost efficiencies. This shift is complemented by the streamlining of IT service management and the advancement of infrastructure automation initiatives across industries, with technology firms leading the way.

5. Semiconductor and Advanced Manufacturing Expansion

Singapore is a critical hub in the global semiconductor supply chain, producing one in ten chips worldwide and nearly 20% of semiconductor equipment. The sector employs more than 35,000 people and contributes nearly 6% to the nation’s GDP, underscoring its strategic importance. Over SG$ 18 billion in capital investment has fuelled the establishment of cutting-edge R&D centres and advanced production facilities, driving demand for resilient digital infrastructure and world-class engineering expertise.

While rapid growth is accelerating infrastructure modernisation, it is also exposing the scarcity of skilled talent in semiconductor design, instrumentation, and process engineering. Targeted workforce development, industry-academia partnerships, and strategic upskilling initiatives will be essential to ensure a steady pipeline of specialised talent capable of supporting innovation and sustaining long-term competitiveness.

6. Bridging Skills Gaps and Talent Shortages

Following recent trends, Singapore’s technology sector continues to face a significant talent shortage. Demand for intermediate to experienced professionals in cloud computing, cybersecurity, AI/ML engineering and advanced analytics far outstrips supply, while legacy infrastructure expertise remains critical for maintaining and transitioning core systems. The COMPASS framework is influencing hiring practices by prioritising local talent and permitting targeted flexibility to bring in expatriate professionals for roles with demonstrable scarcity. Rising living costs and regulatory complexity further constrain workforce mobility.

The challenge is stark – 43% of business leaders are concerned about future talent gaps, and only 30% are confident their organisations possess the skills required for long-term success. As AI accelerates transformation, fewer than half of leaders (46%) have clear visibility into their workforce’s capabilities. This uncertainty underscores the limitations of traditional talent models built on job titles and formal qualifications. In response, organisations are shifting towards skills-based strategies, emphasising capabilities over credentials to enable agile, data-driven hiring, development and deployment.

Singapore’s IT ecosystem is innovation-driven, cloud-first, AI-centric, and security-focused, but faces talent and cost challenges. This requires a shift from asset-based procurement to outcome-driven partnerships, with flexible SLAs and shorter planning cycles to adapt to market volatility.

Michelle Hoang, Senior Account Manager, TEKsystems Singapore

7. Strategic Vendor Engagement for Maximising Value–for–Money

Singapore’s high-cost environment is driving enterprises to reconfigure workforce models for greater efficiency and agility. Critical stakeholder-facing roles remain onshore, while delivery and execution functions are increasingly offshored to cost-effective hubs such as Malaysia, the Philippines, and India. Contracting has become a mainstream career pathway, with professionals seeking skill development, career progression and flexible work arrangements. Demand for language-specific expertise, particularly Vietnamese and Japanese, continues to rise as organisations expand their regional footprint across Southeast Asia.

Technology procurement has evolved from traditional asset acquisition to outcome-driven, service-led engagements. Enterprises are now expecting vendors to deliver more than resourcing and operational support; they are seeking strategic partners who accelerate project delivery, strengthen governance and provide value-added services. Managed service providers are entrusted with end-to-end responsibilities, enabling businesses to optimise cost structures while maintaining agility. Short planning cycles, rigorous service-level agreements, and flexible contingent workforce models have gained prominence to meet evolving organisational priorities and volatile market dynamics.

Turbocharge Your Transformation

Singapore’s IT sector is at a critical inflection point, where cloud-enabled modernisation, AI/ML adoption, cybersecurity uplift, and regulatory reform converge to accelerate next-generation innovation – catapulting the nation into a global technology leader. In response to these evolving market demands, TEKsystems stands out as a high-quality, cost-effective, and value-adding partner. With deep domain expertise and flexible engagement models, we help organisations tackle complex business and technology challenges.

Our full suite of tailored solutions enables organisations to navigate AI/ML adoption, cloud migration, cybersecurity enhancement, regulatory reform, and more. We build resilient, inclusive, and scalable digital ecosystems that elevate customer experiences and maximise technology ROI.

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