Singapore Budget 2024: The government plans to invest S$1 billion over the following five years.

The Singapore Budget 2024, which was unveiled by Deputy Prime Minister and Minister of Finance Lawrence Wong, included an announcement by the government of a S$1 billion investment plan in artificial intelligence to be implemented in five years.

“Part of the investment will be used to ensure that Singapore can secure access to the advanced chips that are so crucial to AI development and deployment. We will also work with leading companies in Singapore and around the world to set up their AI Centres of Excellence here. We want these Centres to spur industry collaboration and innovation, and drive greater value creation across the whole economy,” he explained.

Wong emphasized in the budget that Singapore is already acknowledged as a major participant in the development of AI. He added that their goal is to surpass current standards of excellence and attract private-sector investment.

The Budget 2024’s commitment of over S$1 billion over the following five years to advance Singapore’s AI innovation and adoption is a promising development. We are at a fascinating crossroads where economic resilience may be catalyzed and nation-building can be greatly aided by technology such as artificial intelligence.

In actuality, artificial intelligence (AI) offers a chance to improve Singapore’s expanding digital economy’s preparedness for the future. AI offers businesses a long-term, sustainable way to address enduring economic issues like growing costs and complexity as their business expands thanks to its capacity to boost productivity.

This will be especially important for SMEs, as technology may give them the tools they need to compete with rivals in the larger business.

Organizations will need specific direction to manage their data sources and technological platforms as the use of AI tools increases. As numerous company executives will attest, implementing multiple point solutions in addition to legacy platforms can result in a fragmented set of technological platforms. This fragmentation causes disconnected systems that obstruct data, productivity, and workflows. These flaws will probably result in higher total operational expenses, a worse customer experience, and worse commercial outcomes.

The workforce in Singapore needs to be continuously learning in order to stay up to date with technological advancements. Businesses who can swiftly establish a strong foundation for the adoption of AI and are well-equipped to see its potential will stand to gain the most as the digital economy expands. As firms take advantage of this shift, these initiatives will improve their capacity to reinvest in their workforce.

The Budget for this year highlights Singapore’s ongoing commitment to upskilling efforts and makes a sizable investment in local AI capabilities and skills, which is encouraging to see.

Particularly intriguing is the recently revealed SkillsFuture Level-Up program, which aims to assist mid-career individuals in gaining new skills and competences. Initiatives such as this one acknowledge the vital role this group plays in our economy and the need to provide assistance to our country’s workers in adjusting to changing demands and technological breakthroughs.

In addition to being exciting, the increased attention and funding given to AI talent, capabilities, and industry development is crucial for Singapore to maintain its standing as a center for business and innovation. With one of the highest rates of workplace acceptance of AI worldwide, Singapore is well-positioned to benefit from the government’s plans to establish new AI centers of excellence and its investments in upskilling initiatives, which will empower a new generation of talent and drive demand for highly qualified workers.

Furthermore, in order for Singapore to be able to draw in and keep the talent that it will require in the future, employee experiences that empower employees to achieve at their highest level and build highly effective teams must be added to this investment in skills.

The organizations that truly stand out in this era of technological and societal transformation will be those that adopt this people-centric approach and enable their teams to thrive. These organizations will be responsible for guiding the country toward a prosperous and competitive future.

Three factors are important to clients in the advertising industry, just like they are to other businesses: speed, pricing, and quality. Based on the trends and findings we have observed over the past few months, we can confidently declare that AI tools have proved the capacity to address all three criteria when applied effectively. At Havas, we’ve already been using several of these technologies, and they’ve definitely improved the quality of our work.

Mr. Wong also pledged to increase funding to support research and innovation aimed at a number of national priorities. He announced new government investments in the RIE 2025 Fund, which was previously in place.

Mr Wong stated, “I will set aside more funds for Research & Development because this is how we push the frontiers of innovation across the economy. In 2020, we launched the Research Innovation & Enterprise (RIE) 2025 with a commitment of $25 billion- I will invest a further S$3 billion in RIE 2025. This will sustain our investments in RIE at about 1% of our GDP and the additional resources will go towards research and related investments in national priorities like advanced manufacturing, sustainability, digital economy and healthcare.”

Establishing a new National Cybersecurity Command Center to strengthen cybersecurity

Acknowledging the increasing threats by cybersecurity, Mr Wong stressed on the importance of fortifying cybersecurity as part of security defence. He stated, “Scams, ransomware, data breaches, denial of service, and other cyber threats have become increasingly commonplace. Cyberattacks will increase in speed, scale and sophistication.”

The government has already formed the Digital and Intelligent Service in the SAF to bolster the country’s cyber defense. In order to enhance industrial and academic collaboration, promote cybersecurity innovation, and better coordinate cyber defense operations, Mr. Wong stated that the government will now build a new National Cybersecurity Command Center at the Punggol Digital District. He declared, “This will enhance our capacities to track, identify, and plan our defenses against cyber threats.”

“Since independence, we have invested steadily to safeguard our peace and security. Over the last two decades, we have allocated around 3 to 4% of our GDP annually to MINDEF’s budget. At the same time, over the past decade, our spending on domestic security has doubled to more than S$8 billion or about 1.3% of our GDP. We will continue to build and maintain a strong and effective SAF and Home Team,” he concluded.

Improving Singapore’s position in the semiconductor industry

Since Singapore is home to 20% of the world’s semiconductor equipment, it is also an emerging market, given the growth of the global semiconductor industry. Mr. Wong discussed the following to refine this market: “Singapore is not the most affordable place in the world, but we have many advantages — our excellent connectivity, our dependability and stable business environment, as well as a critical mass of leading companies based here, who operate across the value chain from design to wafer fabrication to assembly and testing.”

He elaborated on the country’s niche market in semiconductors and how it can further its place globally, and said, “The companies here do not produce cutting-edge 3-nanometre chips, but they have carved out a niche in other types of chips like specialty chips and NAND flash memory chips. These are critical enablers of automation, 5G and electric vehicles – and they are in high demand. That’s how this little red dot can be a key node in the semiconductor supply chain. We account, on our own, for more than 10% of the global semiconductor market and 20% of semiconductor equipment in the world.”

Sustainability with a Focus on Green Finance

Speaking about the urgent need for sustainability, Mr. Wong said that in order for local small and medium-sized businesses (SMEs) to remain competitive, they too must embrace sustainability.

The government will increase support for green loans under the Enterprise Financing Scheme and broaden its purview to assist more SMEs in adopting green solutions in order to empower businesses to be “sustainability-ready.” Furthermore, newer industries, including manufacturing, construction, and shipping, as well as data centers and their customers, will be included in the Energy Efficiency Grant, which was first established in 2022 for businesses in the food services, food manufacturing, and retail sectors.

In summary, enterprises that have more aggressive plans to reduce their emissions will receive greater support from the government.

In concluding the Budget 2024 statement, Mr Wong gave the nation a realistic outlook and said, “We are living in a world which will become more violent, more fragmented, and more unpredictable in the years to come. We wish we were not so. But we also have to be realistic. Things may well get worse before they get better.”

He crafted this year’s budget with the world’s chaotic future in mind, anticipating and preparing for it. He declared, “Budget 2024 is about acting on this belief,” as he wrapped up his remarks. We are assisting Singaporeans with issues related to their cost of living. To move our Forward Singapore agenda forward, we are making significant progress.

Important lessons from Singapore’s 2024 budget

  • S$1.3 billion in business support is available to all enterprises with at least one employee in 2023. A cash grant of S$2000 will be given to these companies, and they will also be eligible for a S$40,000 maximum on the 50% corporate income tax rebate.
  • Introduction of an investment credit that is 100% refundable for qualified spending on approved projects
  • An additional S$2 billion to the Financial Sector Development Fund
  • Over S$1 billion will be invested in AI over the following five years.
  • Singapore will benefit from a new Future Energy Fund worth S$5 billion as it moves toward cleaner energy.
  • Parts of the government’s BEPS 2.0 agenda, which aims to tax multinational enterprises, will go forward. The National Broadband Network upgrade will allow mass market access to broadband speeds ten times faster than they are now.
  • The Research, Innovation and Enterprise 2025 (RIE2025) plan has S$1.9 billion in cost-of-living relief measures, including assistance for households and seniors, and S$3 billion set aside for R&D.

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