In a response to Parliament on SMEs and AI adoption, Singapore’s Ministry of Manpower added that the government will work with employers to facilitate the transition to new roles for technology-displaced businesses through reskilling and workforce transformation initiatives.
Singapore’s Ministry of Manpower (MOM) has responded to a parliamentary question on how the rapid evolution of artificial intelligence (AI) could reshape the country’s labor market, particularly for small and medium-sized enterprises (SMEs) and graduate workers. The questions posed are:
About small and medium-sized enterprises and AI introduction
- Given that SMEs employ 70% of the workforce, could the government consider conducting research to better estimate for whom artificial intelligence (AI) is a complement and for whom AI is a labor replacement?
- whether these effects differ between small and medium-sized enterprises and multinational corporations; As a result, governments will be able to implement more targeted support programs for workers whose roles can be replaced.
About new graduate recruitment and employability
- Whether the introduction of artificial intelligence is causing employers to delay hiring new graduates from institutions of higher learning (IHL) in certain fields or occupations.
- Whether the Department has a plan to help increase the employability of new graduates who may face such challenges and the opportunities available to them.
Reacting to the first set, MOM said it is studying how AI implementation can complement or replace different worker groups. Although small and medium-sized enterprises (SMEs) and multinational corporations (MNCs) operate in different contexts with different levels of resources and organizational capabilities, the ministry noted that the impact of AI will depend more on the nature of business activities and tasks than on company size.
That’s why workforce transformation initiatives are designed to fully support businesses. The program focuses on job redesign and reskilling alongside AI implementation, with implementation partners tailoring support based on each company’s needs. Companies undertaking larger or more complex transformation projects may receive closer guidance.
The ministry added that it remains committed to helping all workers maintain their place in the AI-enabled economy. For those displaced by technology, the government will work with employers to facilitate their transition to new roles through reskilling and workforce transformation initiatives.
Regarding concerns about graduate employment, MOM said the overall employment rate of new graduates from institutions of higher learning (IHL) has remained largely stable over the past decade, with fluctuations mainly driven by broader economic uncertainty, geopolitical trends and changes in graduates’ career aspirations.
To prepare graduates for the changing landscape, IHL is working with industry partners and sector institutions to update the curriculum with core competencies such as AI-related competencies, domain skills, critical thinking, creativity, and communication. Work-based learning opportunities, such as AI apprenticeship programs, aim to help students apply these skills in real-world settings.
“Artificial intelligence (AI) is reshaping the labor market, but the specific impact on entry-level jobs in PMET remains unclear,” MOM said.
MOM also highlighted that IHL is working closely with sector institutions and industry partners to ensure the curriculum is relevant to prepare graduates for the AI era. This will be achieved by “integrating AI competencies, domain-specific training, and core skills such as critical thinking, creativity, and communication.”
These efforts are complemented by work-based learning programs such as AI apprenticeship programs, which provide opportunities to apply AI skills in real-world workplace settings.
Students and recent graduates will also have access to education and career guidance services within IHL, in addition to career matching and coaching support from Workforce Singapore and NTUC’s Employment and Employability Institute.
Finally, MOM shared that in response to the growing economic uncertainty in 2025, young graduates have the option of utilizing postgraduate industrial training programs as a means to gain industry-related experience and ease the transition to full-time employment.
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