AI could help Singapore sustain 3% annual GDP growth despite ageing population: Morgan Stanley
SINGAPORE: Artificial intelligence (AI) could help Singapore maintain annual GDP growth of 3% over the long term, even as it faces the structural challenge of a shrinking workforce, according to a new report by Morgan Stanley Research.
Released this month, the report points to AI as a pivotal force for sustaining national productivity and ensuring Singapore remains one of the fastest-growing developed economies.
'Singapore's deliberate and coordinated approach to AI is beginning to bear fruit,' the report said, noting that more than 70% of companies covered in the study have already implemented AI technologies in some form.
AI adoption is strongest in four main areas: internal productivity tools, customer-facing services, supply chain optimisation, and product development. These technologies, the report suggests, are helping firms automate repetitive tasks, improve customer experience, and make better, data-driven decisions.
The report categorises companies into two broad groups. First are the 'AI Enablers' or firms like Singtel, Keppel, and Sembcorp Industries which are building the infrastructure necessary for widespread AI deployment, such as next-generation data centres, energy systems, and high-speed connectivity networks.
The other group are the 'AI Adopters' such as Grab, Sea Group, Singapore Airlines, and ST Engineering, which are applying AI to sharpen operations and drive innovation.
While most companies surveyed remain cautious about attaching hard numbers to the financial returns of AI investment, some reported early signs of growth in earnings and capital expenditure.
Despite this, the report flagged several risks on the horizon such as cybersecurity, AI misuse, and workforce disruption. 'The need to retrain and upskill workers will be essential,' the report read, highlighting government programmes like SkillsFuture that aim to bridge emerging skill gaps.
Morgan Stanley also described Singapore's approach as a potential model for other small, advanced economies navigating similar demographic and technological shifts.
'Singapore shows how strategic planning and cross-sector commitment can enable a country to integrate emerging technologies and turn structural challenges into growth opportunities,' the report noted. document.addEventListener("DOMContentLoaded", () => { const trigger = document.getElementById("ads-trigger"); if ('IntersectionObserver' in window && trigger) { const observer = new IntersectionObserver((entries, observer) => { entries.forEach(entry => { if (entry.isIntersecting) { lazyLoader(); // You should define lazyLoader() elsewhere or inline here observer.unobserve(entry.target); // Run once } }); }, { rootMargin: '800px', threshold: 0.1 }); observer.observe(trigger); } else { // Fallback setTimeout(lazyLoader, 3000); } });
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It has very good nuclear safety research capabilities," said Mr Grossi, adding that the "institutional pillars" that are typically necessary in a newcomer country were present. "I think all of this groundwork has been done here. So in my opinion, when the country, the government, decides to move into a programme, it will be relatively fast," he added. "I don't see, as I said, any obstacle. In some countries, it will be the finance - impossible - or the lack of human capacity, workforce, you don't have those problems in Singapore. This is why I was saying at the beginning of our conversation that there are many steps, many boxes that have been checked already in Singapore." That said, Mr Grossi noted that Mr Wong and Mr Tharman had stated to him during their meetings that no decision had been made regarding the deployment of nuclear energy here. At the same time, the country has been taking steps to expand its research into nuclear safety, including the establishment of SNRSI earlier this month to further studies into this area. Singapore's renewed agreement with IAEA would also enable international nuclear experts to gather in the country to conduct capacity building activities for nuclear research, which will also benefit participants from Singapore. Nuclear power presents a potential source of clean energy and the advancement of nuclear technology, especially in the area of small modular reactors (SMR), makes it a potential option as Singapore works towards decarbonisation. In 2012, the government said that a pre-feasibility study concluded that nuclear energy technologies available at the time were not suitable for deployment as the risks still outweighed the benefits for a small and dense country like Singapore. Answering another question about Singapore's geographical limitations, Mr Grossi said that the lack of space was not a negative factor. "In case there was a deployment here, even within a limited geographical space ... there would not be any problem to have precautionary measures of any type. These measures include protocols and procedures on what to do in the event of an accident, Mr Grossi said. "The idea that introducing nuclear power generates an immediate risk ... is not sustained by reality. Of course, any technology - and nuclear is not an exception - entails risks," said Mr Grossi, adding that risks should be managed and reduced to a minimum. Asked to elaborate on why he did not see space as a limitation, Mr Grossi said that the underlying assumption was a "worst-case scenario". "I would say that, if this is the criterion, other industrial activities ... will also have negative effects in a relatively constrained space like the one here. This is why there are specific plans for that. "Let me put it this way, any geographical space is limited in some way. When you have a nuclear power plant in China, for example, of course, the country is huge, but the vicinity of the plant would also ... be affected," he said. 03:05 Min ASEAN'S AMBITIONS FOR NUCLEAR ENERGY Singapore is not alone in exploring nuclear power within the region. There are currently no operational nuclear reactors in Southeast Asia, but countries like the Philippines and Indonesia have set targets to operate nuclear power plants in the early 2030s. Nevertheless, these regions are also prone to earthquakes, which are one of the many factors the IAEA takes into consideration when dispensing advice on where to situate nuclear plants. "The IAEA has services specifically oriented at that. Where are you planning to build your nuclear power plant? And here, what comes into play is the geological situation of a place, the access to water with a number of things," Mr Grossi said. An intergovernmental organisation, the IAEA works with member states to promote the safe and peaceful use of nuclear energy. Singapore has been a member state since 1967. "The IAEA has expertise and people who are specialists in this concept called siting. So this is a very major element," Mr Grossi added. Asked if the IAEA considered a nation's political stability a key factor in letting it pursue nuclear technology, Mr Grossi replied that it was every country's "sovereign right" to decide whether it wanted to engage in a nuclear programme. However he noted that countries undergoing political turmoil would not usually engage in something that required much planning and institutional effort. Mr Grossi also said that it is up to the individual ASEAN nations to decide whether to explore nuclear energy alone without any collaboration with other countries. That said, bilateral partnerships are also possible. He referred to the example of the Krsko power plant in Slovenia, which supplies energy to both Slovenia and Croatia. This showed how two relatively small countries agreed to situate a nuclear plant in one country but split energy between both, he said. "You can imagine as many arrangements as the countries would like. Here, there is no pre-baked solution. It will depend if there is a will. So it is a dialogue that perhaps countries in ASEAN might wish to have." PUBLIC NEEDS TO BE INFORMED Mr Grossi also spoke of the importance for governments and the region to disseminate more information and for the public to familiarise itself with nuclear technology. "The reality is that all the ASEAN governments are approaching the agency and telling me that they want nuclear energy ... so there is a lot of interest in the area," said Mr Grossi. "It is clear that we have 60 years of nuclear experience in the world, that more than 400 reactors are operating in the world without problems." "So in my opinion, it would be good to do more, to do more information sharing, campaigns of education, dissemination of this information because it's true that the public perceptions may still be influenced by a certain inertia from past examples." The Fukushima incident, for instance, has "left quite a strong impression in some layers of society", he added, referring to the 2011 nuclear power plant meltdown in Japan's Fukushima prefecture. To address such fears, Mr Grossi said transparency was key. He added that a lot of wastewater has been treated and discharged in a controlled manner. "So, so far so good ... But we are going to continue. I said that the IAEA will be present until the very last drop of this water. "So this is, I think, a way to prove that we are there, that we are not going anywhere." 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