Generative AI and analytics are eating up white-collar jobs, while robotics and automation continue to capture blue-collar activities. Agentic AI provides a fresh disruptor in this tech-driven business ecosystem.
Economic strategy needs to adapt to target growth that is inclusive, job-rich and productivity-enhancing. That means policymakers are shifting from measuring economic output to actively shaping growth that delivers tangible employment and income gains.
Lived experience-growth disconnect
There is an increasing disconnect between lived experience and headline growth, nurturing public distrust in economic institutions. What is the value in telling people the economy is doing well if their personal living standards continue to decline?
The political consequences of this economic shift are significant — rising inequality, growth of populism and fiscal strain. We need to shift from measuring high-level economic metrics to delivering meaningful action.
See also: Singapore households face record power bills as war impact hits
Singapore’s economy grew 4.8% in 2025, outperforming expectations despite rising geopolitical tensions and a more fragmented global order. The challenge is no longer how to grow faster, but how to ensure the quality of that growth in everyday lives.
Despite strong GDP growth, Singapore’s unemployment rate has remained consistently low at around 2%. This demonstrates the uncertain connection between top-line GDP and real-world employment.
As Prime Minister Lawrence Wong noted, Singapore must “rethink, reset and refresh” its economic strategies.
See also: Singapore residents stay single for longer, fewer babies born
Rethinking growth
Growth itself isn’t the problem; it’s how we structure it in a modern economy that needs to adapt. While economic pillars are shifting, it’s not a one-way track to spiralling unemployment. AI is projected to reshape more jobs than it replaces. Analysis from the US jobs market shows that around half of jobs will be reshaped by AI in the next two to three years.
This shift is already underway and is projected to accelerate as AI adoption spreads. Agentic AI provides a new catalyst for transition, as fresh capabilities drive high levels of automation in almost half (43%) of jobs.
For businesses, workforce strategy needs to form part of a wider competitive strategy in this new era of AI-driven dynamics. CEOs need to identify the right balance of automation, upskilling and deliberate talent planning to succeed.
Companies that cut their workforce beyond AI’s ability to replace it will see productivity drop, institutional knowledge disappear, and critical talent walk away. By contrast, complacent organisations that fail to rethink how they work dramatically will see their competitors grow faster and more profitably.
In this era of transformation, AI promises significant opportunities for business leaders empowered to act. This is, undoubtedly, a remarkable change in how our economies operate, with major implications for industry and government.
We need to nurture an approach that evens out productivity across leading global firms and smaller domestic enterprises in Singapore.
In this new reality, GDP is incomplete. We require complementary indicators that track metrics like job intensity, productivity dispersion, SME vitality and labour participation.
Sink your teeth into in-depth insights from our contributors, and dive into financial and economic trends
Policy shifts
The pace of AI transformation has been remarkable in recent years. Economic strategy is struggling to keep up. We need an answer that works for our economy and the people at its heart.
That means moving from a passive measurement to actively shaping growth across three strategic shifts.
The first is targeting job-rich sectors. Identify sectors with strong employment multipliers, then align industrial policy, skills and infrastructure to maximise their benefits. That means a focus on tradable services, green industries, advanced manufacturing ecosystems and local supply chains.
Singapore’s Industry Transformation Maps (ITMs) provide a good case in point, targeting 23 key sectors that combined cover around 80% of the national economy. ITMs examine how key trends such as artificial intelligence, automation, digitalisation and sustainability impact sector-specific jobs and skills.
ITMs also provide recommended pathways for employers to reskill their workforce in growth job roles and redesign jobs to align with rapidly evolving industry developments.
The second essential step is raising productivity broadly, not just at the frontier. Support the digitisation and formalisation of the energetic SMEs at the core of our economy. Work to reduce productivity gaps between leading firms and laggards. Invest in workforce reskilling tied to priority sectors to ensure that workers are reshaped as AI reshapes jobs.
Enterprise Singapore provides an important engine to scale SMEs and improve capabilities, underpinned by the SkillsFuture programme. The National Productivity Fund also offers valuable financial backing with an $3 billion top-up in the 2026 budget.
Finally, and fundamentally, measure what matters. Track job intensity of growth and monitor wage growth across income bands. Measure where opportunity emerges and ensure it is shared equally. Evaluate policies on employment elasticity, not just output impact.
Business shifts
The private sector has an equally important role to play. Businesses are not passive actors in this production, but vital co-authors of inclusive growth.
Corporate investment decisions should be designed to shape the job intensity of growth. Companies that invest in workforce development and local supply chains not only energise the right kind of growth, but they also build their own resilience.
Major Singaporean banks are already taking steps to reskill staff in AI. DBS Bank has identified 13,000 staff for upskilling, with over 10,000 already initiating training.
The ongoing shift to AI and automation makes strategic workforce planning critical. That’s why government support through programmes by SkillsFuture Singapore and Workforce Singapore is also focused on training subsidies, enterprise credits to offset workforce transformation costs and grants and advisory services to support job redesigning.
Public-private collaboration, such as SkillsFuture Queen Bee, SkillsFuture Career Transition Programme (SCTP) and SkillsFuture Work-Study Programme, can also help accelerate sector clustering that improves economic maturity.
Inaction not an option
Ultimately, it’s a shared goal of business leaders, governments and citizens to ensure a sustainable jobs landscape for all.
If we stay stuck to GDP-centric policymaking, the glue that holds our national social contract together will start to fail. We risk slower growth, social fragmentation and fiscal pressure.
Ageing populations and debt burdens further increase the urgency for productivity-enhancing, job-rich growth. Without stronger employment outcomes, political support for open markets and reform will weaken.
A note of caution: it is clear to me that the window for proactive reform is narrower than it appears. Moving beyond GDP is the first step. The following step is more difficult, but even more important.
It’s time to design growth strategies that create jobs, raise productivity and deliver visible improvements to living standards. The goal is to avoid a safety net that captures growing numbers of citizens as they fall, and instead create a trampoline that offers a platform to lift them upwards.
If we succeed, the result isn’t simply measuring prosperity differently; it’s building differently for the benefit of all.
Vincent Chin is managing director and senior partner; Global Vice Chair, Public Sector Practice, Boston Consulting Group
