AI to double Singapore's economic growth rate by 2035

It could boost labour productivity by 41% in the said year.

A new research from Accenture revealed that artificial intelligence (AI) will be a key driver of Singapore’s economic growth.

According to the study, AI could nearly double Singapore’s annual economic growth rates by 2035. The research also found that Singapore is at the forefront to integrate innovation and technologies into the wider economy, ahead of the largest economies in the world such as the United States, Germany, United Kingdom & Japan.

One example of how AI can change the economic landscape of Singapore is through boosting labour productivity. This will be driven by innovative AI technologies that will enable the workforce to make more efficient use of their time. With the adoption of AI, Singapore would only require 13 years for its economy to double in size, whilst without AI, it will take the country 22 years.

“As Singapore advances its smart nation vision, the adoption of AI will propel economic growth and potentially serve as a powerful remedy for stagnant productivity and labour shortages,” said Lee Joon Seong, managing director, ASEAN Accenture Analytics Lead.

He furthered, “The combinational effect of AI, cloud, sophisticated analytics, robotics and other emerging technologies is already starting to change how work is done by humans and machines, and how organisations interact with consumers in startling ways.

AI was found to yield the largest uplift in economic growth for Singapore, potentially increasing its annual growth rate from 3.2% to 5.4% by 2035, translating to an additional US$215b in gross value added (GVA).

This is ahead of other large economies such as the United States, with AI potentially adding US$8.3tin GVA by 2035, increasing its annual growth rate from 2.6% to 4.6% by 2035. In the United Kingdom, AI could add an additional US$814b to the economy by 2035, increasing the annual growth rate of GVA from 2.5% to 3.9%. Japan has the potential to more than triple its annual rate of GVA growth by 2035, and Finland, Sweden, the Netherlands, Germany and Austria could see their growth rates double.

In Singapore, research showed that AI will increase labour productivity by 41% by 2035, the highest amongst the developed economies. The productivity increase dramatically reduces the number of years required for the largest economies in the world to double in size. This “doubling time” is an indicator of economic development and the results are primarily driven by a country’s ability to diffuse technological innovations into its wider economic infrastructure.