By Wendy Lim, Industry Development Director, Straits Interactive
The Singapore government has committed billions in their push to position Singapore as a global AI hub, successfully claiming a spot as one of the leading countries in AI adoption. Most recently, OpenAI committed to a partnership with Singapore’s Ministry of Digital Development and Information, backed by over S$300 million, signalling that global players are doubling down on Singapore as a strategic AI base.
However, contrary to the buzz, Singapore’s Ministry of Manpower reports that only 28.5% of the nation’s companies have integrated AI into their workflows. An even smaller share, 3.8%, has embedded AI into key operations. Many organisations remain at the planning or piloting stages.
A large proportion of digitally transformed organisations are Multinational Corporations (MNCs); the Infocomm Media Development Authority also reported that Small and Medium Enterprises (SMEs) adoption remains low. However, this does not mean that SMEs are certain to fall behind - but why is it that many of them currently do?.
The ‘Mental Block’: Why Singapore SMEs Remain Hesitant About Gen AI Integration
Unlike MNCs with the resources and capability to run pilots and implement change across their organisations, many SMEs are constrained by their resources and ultimately face a ‘mental block’ when it comes to adopting new technology.
Three major factors lead to the SME mental block:
1. Constrained resources: Faced with limited resources and time challenges, improving workflow processes becomes a low priority, let alone adopting new, unfamiliar tools such as Generative AI.
2. Risks of the new technology: Aware that new tech brings business and technical risks, some SMEs may prefer to take a wait-and-see stance where new tech is concerned, and allow the larger market to ‘test’ it before they take it seriously.
3. Surplus of alternatives in the market: The flux of AI apps results in choice paralysis that may cause business owners to hesitate when they attempt to evaluate which Gen AI tool to adopt.
However, as UOB reports that 34% of “businesses plan to increase AI budgets in 2026”, overcoming the ‘mental block’ and scaling towards AI Capability must remain a priority. AI-integrated workflows can assist businesses in driving cost-efficiency and scaling up. Its impacts will only compound with time, leaving those without the technology behind. The window for AI adoption is narrowing fast, and SMEs that are not planning for AI adoption are losing out on a competitive advantage.
Moving Forward with the Right Gen AI Tools and Capabilities
While organisation-wide AI implementation may not appear urgent now, SMEs cannot remain passive.
To kickstart their Gen AI capability- building journey, SMEs should aim to tick the boxes of these essential elements of capability:
Competency – Knowledge and Skills:
Being able to prompt, supervise, validate, and apply effectively, as well as integrate domain knowledge into AI use, will make processes more efficient. By combining the organisation’s knowledge and expertise with AI skills, tools can be used with great effectiveness. Generative AI courses can help employees build AI capability while reducing out-of-pocket costs with government funding.
Tools and technology:
Finding the most suitable technology that raises productivity is vital. Plug-and-play platforms such as Capabara allow users to use, create and manage tools without any coding expertise.
Processes:
SMEs begin incorporating Gen AI into their operations by first identifying specific problem statements to streamline workflows and processes. Rather than adopting siloed tools, organisations should select Gen AI solutions that can be customised to seamlessly integrate with and optimise their existing workflows.
Transformation:
Businesses must remain willing to experiment, adapt, and rethink how AI is used across different business functions. True digital transformation goes beyond competency, tools and processes and adopts a unified mindset shift in embracing generative AI.
Concurrently, the steps toward building generative AI capability must be adopted with guardrails and risk management measures in place. Data governance and compliance considerations must precede productivity gains.
A pitfall SMEs must be mindful of is Shadow AI (unauthorised AI use by employees), which is the result of a lack of AI awareness training or the absence of AI governance policies. For example, staff unaware of AI’s risks and constraints may input confidential data into Large Language Models (LLMs), which could expose confidential information. Instead of outright banning AI use in organisations, as a first step, due diligence on vendors must be carried out, and the use of paid accounts should be extended beyond upper management.
As AI remains prone to bias, hallucinations, and errors, human-in-the-loop verification is also necessary. Organisations should seek to oversee AI use, as well as set acceptable use policies, controls and measures. As such, AI cannot be a mere technology purchase that is used in isolation. A truly valuable GenAI platform is more than just another SaaS product; it must be versatile enough to serve the entire organisation while offering customised tools for specific departmental needs.
Instead of buying a one-size-fits-all approach, perhaps it’s time to look at how SMEs can build true Gen AI Capability from within, scaling their own domain expertise as a central point of their digital transformation. SMEs can deeply benefit from consultancy that understands the unique pain points they face and has a Gen AI platform to address those areas, for a customised solution that fuels their productivity.
The good news is that SMEs do not have to figure out how to implement Gen AI effectively on their own. Pathways are more accessible than ever - through government-supported programmes, expert consultancy, or platforms built for resource-constrained teams. The first step is simply deciding to take the journey forward.
Capabara, our no-code Next-Gen AI Capability-as-a-Service platform, is the engine of your Gen AI digital transformation. Choose from 50+ pre-created tools or create your own using the Tool Wizard Builder, then plug-and-play – there’s no need for technical IT expertise. Created by three-time Data Protection Trustmark (DPTM) Certified company Straits Interactive, Capabara offers business owners peace of mind with its secure platform.
If your company is interested in developing generative AI competencies and capabilities with us, write to sales@straitsinteractive.com with your company email address. Stay tuned to Capabara’s latest developments by following CAPABARA on LinkedIn or heading over to capabara.com to find out more about how your organisation can be empowered through safe, secure and sustainable generative AI adoption.
Sources: Infocomm Media Development Authority, Microsoft, OpenAI, Ministry of Manpower, PwC
