Key Findings #1
Singapore's digital economy contributed SGD 113.2 billion to GDP in 2023, representing 17.7% of the total economy, driven by cloud adoption, AI advancements, and digital transformation.
Key Findings #2
Singapore's digital economy continues to outpace overall GDP growth, with the software and IT services sector playing a crucial role in driving enterprise digitalization, cloud adoption, and AI integration. Government-backed initiatives and increasing demand for cybersecurity, SaaS, and automation solutions are accelerating industry expansion.
Key Findings #3
Government-backed Smart Nation initiatives and strong cybersecurity frameworks are fostering an innovation ecosystem, supporting over 90% SME digital adoption and attracting major software firms and tech investments.
OVERVIEW
Singapore’s software sector is a key pillar of the digital economy, which has significantly contributed to GDP growth, expanding at a CAGR of 11.2% from 2018 to 2023, outpacing overall economic growth.
Enterprise digital transformation is accelerating, with 94.6% of firms adopting at least one digital solution.
Cloud computing, AI-driven automation, and cybersecurity software are fast-growing sub-sectors.
The global software and IT services industry continues to experience unprecedented growth, driven by rapid advancements in cloud computing, artificial intelligence (AI), cybersecurity, and enterprise automation. The widespread adoption of digital transformation strategies across industries has propelled software companies to the forefront of economic growth, with businesses increasingly investing in AI-driven analytics, SaaS solutions, and cybersecurity frameworks to enhance efficiency and resilience.
In particular, Asia has emerged as a key driver of software and digital services innovation, as governments and enterprises accelerate their technology adoption to maintain competitiveness in a fast-evolving digital economy. Countries such as China, India, and Japan have led the way in AI research, fintech development, and cloud adoption, while Southeast Asia has increasingly become a hotspot for regional tech hubs and digital infrastructure investments. Singapore has positioned itself as a leading software and IT services hub, benefiting from its strategic location, pro-business policies, and integration with technology supply chains.
Singapore’s Information and Communications (I&C) sector has played a vital role in the nation’s economic development, accounting for 5.7% of Singapore’s GDP in 2023, up from 5.1% in 2022 according to the IMDA. The broader digital economy, encompassing cloud computing, enterprise software, cybersecurity, and AI-driven automation, contributed SGD 113.2 billion in nominal value-added (VA) to the economy.
Singapore’s digital economy has outpaced the overall GDP growth, expanding at a CAGR of 11.2% from 2018 to 2023, almost double the nominal GDP growth rate of 5.8% over the same period according to the IMDA. This rapid expansion has been driven by strong enterprise adoption of digital technologies, government-backed research and development initiatives, and the increasing demand for high-value software solutions across industries. The nation has also benefited from its strategic position as a gateway to Southeast Asia, attracting multinational software companies to set up regional headquarters.
Furthermore, enterprise digitalization has accelerated, with 94.6% of Singaporean firms having adopted at least one digital area (e.g., cybersecurity, cloud, e-commerce, or AI). The country has also witnessed a growing startup ecosystem, with the number of digital tech startups increasing to 2,580 in 2022, accounting for 53% of the total startups. These startups contribute to the rapid evolution of Singapore’s software ecosystem, introducing new business models, innovative digital solutions, and disruptive technologies that drive further industry growth.
MACROECONOMIC OVERVIEW
1. Market Size and Growth
Singapore’s digital economy contributed 17.7% of total GDP in 2023, maintaining its strong momentum from 17.3% in 2022 according to the Singapore IMDA and Singapore Department of Statistics. The digital economy’s compound annual growth rate (CAGR) of 11.2% between 2018 and 2023 far outpaced the overall economy’s growth rate of 5.8%, highlighting its increasing importance to national economic expansion. This trend underscores the accelerated shift towards digital-first business models, cloud-based operations, and AI-powered efficiencies, which are now fundamental components of Singapore’s economic resilience and future growth.
The Information & Communications sector accounts for about one third of the digital economy based on Singapore IMDA estimates, with the remainder of the digital economy comprised of digitization within other industries.
The I&C sector is one of the key growth engines of the Singapore economy. Fueled by continued enterprise demand for digitalization, the I&C sector expanded by 5.7% in terms of real value-add (removing the impact of inflation) in 2023, making it one of the economy’s faster-growing sectors as shown below.
CHART 1: INFORMATION & COMMUNICATIONS THE FASTEST GROWING SECTOR WITHIN THE SINGAPORE ECONOMY
Source: Singapore IMDA
Software Services
In 2025, the projected revenue in Singapore’s publicly sold software market is expected to reach USD 2.27 billion, with enterprise software emerging as the dominant segment, contributing USD 950.70 million in market size. The overall software market is projected to grow at an annual CAGR of 4.71% from 2025 to 2029, reaching USD 2.72 billion by 2029, according to Statista. This steady expansion is driven by increasing demand for cloud-based enterprise solutions, AI-powered automation tools, and cybersecurity software as businesses further integrate digital technologies. It is important to note that this figure reflects only the market for packaged and publicly sold software products and does not include custom software development, IT services, or cloud infrastructure, which are integral to the broader software and IT services industry in Singapore.
CHART 2: SINGAPORE SOFTWARE MARKET SIZE
Source: Statista, independant estimates
2. Key Economic Drivers
Singapore’s software and services sector is driven by rapid enterprise digitalization, the widespread adoption of AI-driven business intelligence, and continued investments in cloud-based and cybersecurity solutions. Government support through the Productivity Solutions Grant (PSG) has enabled SMEs to achieve cost savings of up to 50%, while 94.6% of firms have adopted at least one digital technology, including AI-powered analytics, cybersecurity frameworks, and cloud migration strategies. AI adoption among large enterprises surged to 44% in 2023, up from 16.7% in 2018, accelerating business automation and digital process optimization.
CHART 3: SINGAPORE SME’S DIGITAL SOLUTION ADOPTION RATES BY SECTOR
Source: Singapore IMDA
The government’s investment in AI R&D exceeds SG$500 million, positioning Singapore as a leader in AI innovation and business automation regionally. AI-enabled software applications have now been integrated into many large enterprises, especially in finance, healthcare, logistics, and customer experience management. For example, banks such as OCBC now use AI to power customer service chatbots, while Singapore’s public healthcare system has incorporated AI into national screening programs. Singtel has introduced AI for user identification in order to strengthen clients’ enterprise security. In the logistics sector, companies are using AI to predict demand for inventory optimization.
Additionally, digital trade and cross-border e-commerce expansion are contributing to software market growth, as businesses increasingly leverage digital payment gateways, cybersecurity infrastructures, and AI-driven logistics solutions. The regional positioning of Singapore as a technology hub further attracts foreign investments, with global firms setting up headquarters and R&D centers in the country. The presence of over 2,500 digital technology firms underscores Singapore’s role as a leading digital economy enabler in the Asia-Pacific region.
Singapore has also prioritized cybersecurity investments to safeguard digital transactions and enterprise software systems. New regulations under the Cybersecurity Act 2023 and enhanced data protection frameworks under the Personal Data Protection Act (PDPA) reinforce Singapore’s commitment to creating a secure digital business environment.
These macroeconomic trends highlight that Singapore’s digital economy is not only growing faster than the broader economy but is also shaping the next phase of innovation and industry transformation, cementing its status as a regional and global leader in the software and IT services landscape.
KEY REGULATORY DEVELOPMENTS IN THE SINGAPORE SOFTWARE SECTOR
Data Protection and Privacy Laws
Singapore has strengthened its Personal Data Protection Act (PDPA) to ensure consumer privacy and safeguard digital transactions. Companies operating in the software sector must comply with data protection obligations, including explicit user consent for data collection, stringent security measures, and penalties for data breaches. Amendments to the PDPA have introduced higher financial penalties for non-compliance, reinforcing the country’s commitment to data privacy and security.
Cybersecurity Regulations
The Cybersecurity Act 2023 mandates enhanced security measures for organizations managing critical digital infrastructure. Software firms operating cloud-based services must comply with strict cybersecurity guidelines, ensuring data encryption, multi-factor authentication, and robust cyber incident response strategies. The government has also increased cybersecurity investment incentives, providing funding for companies investing in threat detection and resilience solutions.
AI Governance and Ethical Use
The Singapore government has introduced AI governance frameworks, establishing ethical guidelines for software firms leveraging AI technologies. The Model AI Governance Framework, developed by the Infocomm Media Development Authority (IMDA), ensures AI-powered software solutions meet transparency, accountability, and fairness standards. This regulatory approach seeks to prevent algorithmic bias, ensure responsible AI deployment, and protect end-user interests.
Intellectual Property Rights and Software Patents
To support software innovation, Singapore has strengthened intellectual property (IP) protections through its Copyright Act and Patents Act. Companies in the software industry benefit from streamlined patent registration processes and legal mechanisms to combat software piracy, making Singapore an attractive hub for software development and innovation.
Digital Trade and Cross-Border Regulations
Singapore’s digital economy policies include cross-border data flow regulations that promote seamless software trade. Through initiatives like the Digital Economy Partnership Agreement (DEPA), the government enables international collaboration on digital standards, fintech regulations, and software trade facilitation.
These regulatory advancements reinforce Singapore’s reputation as a secure, innovation-friendly, and digitally progressive economy, ensuring sustained growth and competitiveness in the software and services sector.
SUB-THEMES: TRENDS AND DRIVERS
1. Cloud Computing and SaaS Expansion
Cloud computing and SaaS adoption continue to be at the forefront of Singapore’s digital transformation. Businesses are increasingly adopting multi-cloud strategies to enhance resilience and flexibility while reducing dependence on a single provider. Companies are also turning to cloud-native applications and serverless computing to increase efficiency, lower costs, and streamline development lifecycles. This shift is further fueled by Singapore’s 5G rollout, which enhances cloud capabilities by reducing latency and improving connectivity for real-time applications.
The SaaS market is expected to grow at a CAGR of 19.7% from 2025 through 2029, reaching a projected market size of USD 2.37 billion, according to Statista. This growth is being driven by rising demand for cloud-based ERP, CRM, HR management, and collaboration tools, which allow businesses to increase productivity, automate workflows, and scale efficiently. Additionally, AI-driven cloud optimization tools and machine learning-based automation are helping companies reduce operational overhead and enhance cloud resource allocation, further accelerating SaaS adoption.
As the need for secure and compliant cloud infrastructure grows, businesses are implementing advanced cloud security solutions, including zero-trust architectures, AI-driven security monitoring, and automated threat detection. Singaporean firms are also leveraging edge computing, which processes data closer to the source, reducing latency and improving security for critical real-time applications such as IoT and AI-driven analytics.
Furthermore, hybrid cloud adoption is increasing, as businesses seek to balance data sovereignty requirements with scalable cloud infrastructure, leading to new opportunities in cloud security, cost optimization, and workload automation. The Singapore government has been a major advocate of hybrid and multi-cloud strategies, providing funding and policy frameworks that encourage organizations to leverage cloud computing while maintaining data governance compliance with PDPA and international data protection agreements. This regulatory alignment is also attracting global cloud service providers, fostering a competitive cloud ecosystem in Singapore.
CHART 4: SINGAPORE SAAS MARKET SIZE
Source: Statista, independent estimates
2. AI and Automation
Artificial intelligence and automation are fundamentally transforming the way businesses operate, driving efficiency, innovation, and competitive advantage across multiple industries. AI-driven solutions are now widely used in predictive analytics, workflow automation, natural language processing (NLP), and robotic process automation (RPA), streamlining complex operations and reducing manual workloads. These technologies are enabling businesses to enhance operational efficiency, minimize human error, and scale processes dynamically, leading to increased productivity and cost savings.
Singapore has positioned itself as a leader in AI research and adoption, with the government investing SG$500 million in AI R&D initiatives to accelerate industry transformation. Nearly 44% of businesses in Singapore are utilizing AI-powered tools according to Singapore’s IMDA, with key applications in supply chain optimization, fraud detection, customer service automation, and financial risk assessment. AI adoption is particularly strong in healthcare, finance, and logistics, where machine learning algorithms are being leveraged for diagnostic automation, credit risk modeling, and real-time demand forecasting.
Another emerging trend is the integration of AI with edge computing, enabling faster data processing at the source while reducing reliance on centralized cloud infrastructure. This is particularly relevant in industries such as manufacturing and IoT, where real-time AI-driven analytics are crucial for predictive maintenance and operational efficiency. AI-driven automation tools are also reshaping cybersecurity strategies, with AI being used for threat detection, anomaly recognition, and automated response mechanisms.
With AI technology advancing at an accelerated pace, businesses in Singapore are rapidly embracing AI-as-a-Service (AIaaS) solutions, allowing them to access sophisticated AI models without the need for extensive in-house expertise. The increasing convergence of AI with blockchain technology, quantum computing, and digital twins is further unlocking new possibilities, ensuring that AI and automation remain at the forefront of Singapore’s software-driven economic growth.
CHART 5: SINGAPORE SAAS MARKET SIZE
Source: Singapore IMDA
3. Cybersecurity and Digital Trust
With rising cyber threats, businesses are heavily investing in threat intelligence platforms, endpoint security, and compliance automation software. The Cybersecurity Act 2023 enforces stricter data governance policies, requiring enterprises to adopt zero-trust security models and conduct regular penetration testing.
As financial services, e-commerce, and government institutions continue to digitize, AI-powered cybersecurity solutions are playing a critical role in detecting advanced persistent threats (APTs), malware, and phishing attacks. Additionally, businesses are focusing on cyber resilience strategies, integrating AI-powered anomaly detection, blockchain-based identity verification, and multi-layered authentication protocols to protect sensitive digital assets.
Singapore’s cybersecurity market is expected to generate US$574.37 million in revenue by 2025. Cyber Solutions is set to dominate the sector, accounting for US$321.13 million of the market that year. The industry is projected to grow at a 7.72% CAGR from 2025 to 2029, reaching a total market value of US$773.23 million by 2029 according to Statista.
Chart 6: SINGAPORE CYBERSECURITY MARKET SIZE
Source: Statista, independent estimates
4. Enterprise Software and ERP Growth
Enterprise Resource Planning (ERP) systems and enterprise software solutions are experiencing increasing adoption across industries as businesses aim for greater efficiency, data-driven decision-making, and automation. The enterprise software market in Singapore is projected to reach USD 950.70 million by 2025, reflecting the growing reliance on integrated software platforms to streamline operations. Organizations are implementing AI-powered ERP systems that enhance workflow automation, supply chain management, and predictive analytics, driving efficiency across finance, HR, and procurement functions.
Chart 7: SINGAPORE ENTERPRISE SOFTWARE MARKET SIZE
Source: Statista, independent estimates
As more businesses migrate to cloud-based ERP solutions, software vendors are incorporating advanced capabilities such as blockchain-driven smart contracts, AI-enhanced forecasting tools, and IoT-integrated asset tracking. The demand for industry-specific ERP solutions is rising, with sectors like manufacturing, healthcare, and financial services leading the transition. Additionally, companies are increasingly adopting low-code and no-code ERP solutions, allowing businesses with limited technical expertise to develop customized enterprise applications suited to their operational needs. The shift towards subscription-based ERP models (SaaS ERP) is also accelerating, reducing upfront costs for businesses while enabling greater scalability and flexibility.
Government incentives and grants, such as the Productivity Solutions Grant (PSG) and Enterprise Development Grant (EDG), continue to encourage digital transformation and ERP adoption among small and medium enterprises (SMEs). As ERP platforms evolve, businesses in Singapore are integrating real-time analytics, AI-driven automation, and cybersecurity enhancements, reinforcing ERP systems as centralized hubs for data management and digital transformation.
5. Singapore’s Role as a Regional Software Hub
Singapore continues to cement its position as Southeast Asia’s premier software hub, attracting global technology firms, regional startups, and R&D centers. The country’s business-friendly policies, robust intellectual property protections, and advanced digital infrastructure make it an ideal location for software innovation and enterprise expansion. With over 2,500 digital technology firms operating in Singapore, the country has established itself as a leader in software exports, digital trade agreements, and cross-border SaaS adoption.
The Digital Economy Partnership Agreement (DEPA) and other bilateral trade agreements facilitate seamless software deployment, enabling Singapore-based companies to expand across the region. Additionally, tech giants such as Microsoft, Google, and Oracle have expanded their Singapore operations, setting up regional AI labs, data centers, and cloud computing hubs. Singapore's investment in high-speed connectivity, smart city initiatives, and digital identity frameworks also strengthens its reputation as a center for enterprise software solutions and next-generation digital services.
Startups and homegrown software firms are benefiting from government-backed initiatives, such as the SG Digital Innovation Fund and the IMDA Open Innovation Platform, which provide grants and resources to drive innovation. Singapore’s ability to attract venture capital, technology incubators, and AI research institutions further reinforces its role as a global leader in software development and deployment. The country’s focus on AI ethics, digital sovereignty, and cybersecurity regulations ensures that its software industry remains a trusted and secure partner for international businesses, making it a strategic hub for global software expansion and digital transformation.
Since software is a digital product or service that seamlessly serves clients across borders, and SGX offers a welcoming listing framework for overseas companies, SGX-listed software firms often operate across Asia and globally. The local market features key companies that provide investors with exposure to diverse software themes.
ENTERPRISE SOFTWARE AZEUS SYSTEMS (AZEUS SP)
Azeus Systems is a global IT solutions provider specializing in enterprise software and IT consulting for governments, corporations, and financial institutions. With 30+ years of experience, it focuses on board governance, digital transformation, and secure collaboration using cloud-based and AI-driven applications. Its flagship Azeus Convene led to additional products like Convene AGM, Convene Records, and Convene ESG. The Products segment (81% of FY1H25 revenue) drives growth, while IT Services supports government contracts and digital transformation. A high-margin, subscription-based model ensures stability, with innovations in AI, cybersecurity, and ESG solutions strengthening its global expansion.
INDUSTRIAL SOFTWARE CSE GLOBAL (CSE SP)
CSE Global provides mission-critical software integration and automation solutions for industries like oil & gas, infrastructure, defense, and manufacturing. Operating across Asia, Australia, and the Americas, it delivers SCADA, IoT, and AI-driven analytics for real-time monitoring and predictive maintenance. Expanding with Industry 4.0, it offers digital twin simulation, AI-powered risk assessment, and cybersecurity-integrated industrial software. With a focus on cybersecurity, cloud integration, and compliance, CSE Global enhances operational efficiency, security, and industrial automation, positioning itself as a key player in digital transformation.
IT INFRA & AI/CLOUD SOLUTIONS KARIN TECHNOLOGIES (KTH SP)
Karin Technologies is a leading IT solutions provider specializing in cloud computing, cybersecurity, and enterprise IT infrastructure. Serving businesses, financial institutions, and government agencies, it enables AI-driven automation and hybrid cloud adoption across Asia Pacific, particularly in China and Hong Kong. Its fastest-growing IT Infrastructure Solutions segment generated HK$1,634.4M in FY2024, up 21.1% YoY, driven by demand for AI computing, cloud migration, and network security. Partnering with Huawei, Lenovo, Dell, Oracle, and IBM, it delivers high-performance IT infrastructure, AI model training, and cybersecurity frameworks. Well-positioned for digital transformation, Karin Technologies continues expanding in AI-powered and cloud-enabled enterprise solutions.
MEMORY & SMART CITY APPLICATIONS TREK 2000 INTL (TREK SP)
Trek 2000 International is a pioneer in flash memory solutions and IoT software integration, playing a key role in modern digital storage innovation. It offers secure digital storage, AI-powered data security, and blockchain-based authentication, catering to enterprises needing data protection and regulatory compliance. Expanding into smart connectivity, it develops wireless data transfer, encryption, and IoT-enabled asset tracking. Trek 2000 also supports Singapore’s Smart Nation initiatives, focusing on edge computing, AI-based authentication, and industrial automation. Known for ThumbDrive and FluCard, it provides customized encryption, firmware, and licensing solutions, reinforcing its leadership in cybersecurity and secure cloud storage.
BIOMETRICS & CYBER SECURITY TOTM TECHNOLOGIES (TOTM SP)
TOTM Technologies is a leader in biometric and identity management solutions, specializing in digital identity and onboarding systems for national ID programs, border control, fintech, healthcare, and critical infrastructure. It offers NIST-rated biometric matching software and has played a key role in Indonesia’s e-KTP program. In 2023, it partnered with Narwhal Technology to integrate palm vein biometrics with blockchain and AI and formed a joint venture with Presight AI to enhance digital identity solutions. In 2024, its subsidiary PT International Biometrics Indonesia secured $7.5M in contracts from Indonesia’s Ministry of Home Affairs, strengthening its regional presence.
The following funds provide exposure to Fintech theme and can be found on the GROW Fund Center
ABRDN SELECT PORTFOLIO GLOBAL TECHNOLOGY FUND SGD
The abrdn Select Portfolio Global Technology Fund provides exposure to Singapore and broader global software trends described in this piece by investing in leading global technology companies, including those driving digital transformation in Singapore and the region. The fund focuses on high-growth sectors such as cloud computing, AI, cybersecurity, and enterprise software, many of which are expanding rapidly across Asia. Key global tech companies with large regional headquarters presences in Singapore are included in the fund such as Microsoft, Alphabet, and Apple.
EASTSPRING INVESTMENTS UNIT TRUSTS - GLOBAL TECHNOLOGY FUND SGD
The Eastspring Investments Unit Trusts - Global Technology Fund SGD provides investors with exposure to global technology companies driving digital transformation across various sectors. As of February, 2025, the fund's top holdings include Microsoft, NVIDIA, Meta, Amazon, and Alphabet. These companies are leaders in areas such as cloud computing, artificial intelligence, and digital advertising, aligning with the fund's objective to capitalize on long-term growth opportunities within the technology sector.
ALLIANZ ORIENTAL INCOME
The Allianz Oriental Income Fund offers investors exposure to the Asia-Pacific region's dynamic markets, with a notable emphasis on the technology sector. As of December 31, 2024, the fund allocated approximately a third of its assets to technology companies, reflecting its strategic focus on high-growth industries such as semiconductors, electronics, and information technology services. Notable holdings include Alchip Technologies Ltd and Unimicron Technology Corp, both key players in the semiconductor industry, and Hitachi Ltd, a diversified technology and industrial conglomerate. This allocation positions the fund to benefit from the region's rapid technological advancements and digital transformation initiatives.
JANUS HENDERSON GLOBAL TECHNOLOGY LEADERS
The Janus Henderson Global Technology Leaders Fund provides investors with exposure to global technology companies driving digital transformation across various sectors. As of December 31, 2024, the fund's top holdings include Microsoft, Meta, NVIDIA, Amazon, and Alphabet. These companies are leaders in areas such as cloud computing, artificial intelligence, and digital advertising, aligning with the fund's objective to capitalize on long-term growth opportunities within the technology sector.
FIDELITY GLOBAL TECHNOLOGY FUND
The Fidelity Global Technology Fund offers investors exposure to leading technology companies worldwide, including those driving digital transformation in Singapore and the broader Asia-Pacific region. As of December 31, 2024, the fund's top holdings include Taiwan Semiconductor Manufacturing, Microsoft, Apple, Alphabet, and Amazon. These companies are at the forefront of technological innovation, encompassing sectors such as semiconductors, software development, cloud computing, and e-commerce. The fund's strategic focus on high-growth areas aligns with the rapid technological advancements and digital transformation initiatives in Singapore and across Asia.
TAKEAWAY #1
Singapore’s software and services sector has consistently outperformed the broader economy, with digital economy GDP growing at 11.2% CAGR from 2018-2023, compared to 5.8% for overall GDP. This demonstrates that businesses are increasingly prioritizing digital transformation and enterprise software adoption.
TAKEAWAY #2
The Smart Nation Strategy, AI governance frameworks, and cybersecurity regulations are fostering a secure and competitive digital ecosystem. Incentives such as the Productivity Solutions Grant (PSG) and AI R&D funding continue to drive SME digitalization and AI adoption, ensuring that software-driven growth remains robust.
TAKEAWAY #3
Enterprise adoption of cloud computing, AI-driven automation, and cybersecurity software is surging, as businesses seek operational efficiency, data security, and regulatory compliance. SGX-listed software companies are well-positioned to benefit from these structural trends, particularly in digital identity solutions, enterprise automation, and industrial cybersecurity.
