The latest survey by Deel reveals that 81% of organisations have experienced negative impacts from global tariffs.
“Singapore’s businesses are being squeezed from both sides – by rising costs due to global economic uncertainty and the need to invest in innovation to stay ahead,” said Nick Catino, global head of Policy at Deel.
Economic pressures
The report found that 56% are facing increased operational costs. Moreover, economic pressures lead to wage freezes (60%), reduced hiring (48%) and retrenchments (43%).
In response to global disruptions, 31% of Singaporean businesses have ramped up their AI and automation efforts.
Businesses that have embraced AI are reporting significant benefits, including increased efficiency and productivity (71%), operational optimisation (61%), and cost savings (50%).
However, even digital frontrunners are not exempt, as wage pressures are felt most acutely by businesses at advanced stages of AI adoption (86%).
“Even those leading AI adoption are feeling the strain, showing that economic headwinds are impacting all levels of digital transformation. This highlights a key challenge: while AI adoption can help with productivity and cost savings, it is not a silver bullet for macroeconomic pressures,” Catino said.
Strategic approach
Though AI is seen as a solution to global economic pressures, challenges remain that prevent its effective adoption.
“With economic uncertainty and tariff pressures mounting, Singaporean businesses should ensure AI investments deliver tangible results in productivity, efficiency and margin resilience. The path forward requires a strategic approach – carefully evaluating whether to overhaul existing systems or leverage trusted AI solutions from vendors and investing in talent development to future-proof operations,” Catino concluded.
