Taihei Yamada on Singapore’s Digital Economy: Reading Beyond the Headline Numbers

Susan Richter

6 days ago

6 min read

Updated: 2 days ago

What Singapore’s digital economy shows about reading technology growth, and why the headline figure is only the starting point.

Taihei Yamada is an investment professional focused on private equity and private credit investments in Asia. Technology is one of the sectors where private capital in the region is most active, and also one where growth headlines are easiest to misread.

Singapore offers a useful reference point. Its government publishes a detailed annual measure of the digital economy, which makes it possible to look at technology as an economy-wide activity rather than a list of well-known companies.

In this article, Taihei Yamada looks at what Singapore’s digital economy figures say about the technology sector and the questions they raise for investment across Asia. The discussion is industry-level and general. It does not describe any company, transaction or investment.

Singapore’s digital economy in numbers

Singapore’s digital economy added S$144.1 billion of value in 2025, equal to 19.3% of GDP, according to the Infocomm Media Development Authority (IMDA). [1] The figure comes from the Singapore Digital Economy Report 2026, released on 5 October 2026. [2] The digital economy grew 5.6% year on year in nominal terms, faster than the 3.1% growth in nominal GDP. [1]

Measure	2024, as first published (Oct 2025)	2024, as restated (Oct 2026)	2025 (Oct 2026)
Digital economy value added (S$ billion)	128.1	136.5	144.1
Share of GDP	18.6%	18.8%	19.3%
Tech workforce	214,000	≈214,100 (author estimate)*	222,200
SMEs using AI	14.5%	14.5%	23.4%
Large local firms using AI	62.5%	62.5%	70.4%

Source: IMDA, Singapore Digital Economy Report 2025 and 2026. Figures are official unless marked as an author estimate. [1][3][4]

* Author-derived estimate, not an IMDA figure. IMDA did not separately restate the 2024 tech workforce. The 2026 report gives 3.8% growth to 222,200 in 2025; 222,200 ÷ 1.038 ≈ 214,100, which is within rounding of the 214,000 originally published. The 2025 report labelled this group “non-SMEs”; 2026 coverage describes it as large local firms. [3] The 2024 starting point is the same, 62.5%.

The restatement is the more instructive part of the new release. In October 2025, IMDA put the 2024 digital economy at S$128.1 billion, or 18.6% of GDP. [4] The 2026 report restates 2024 at S$136.5 billion, or 18.8%. [1] That is S$8.4 billion, or about 6.6%, higher than first published, yet the share of GDP moved by only 0.2 percentage points. Working back from the rounded figures, the implied size of the economy rose by roughly 5% as well, from about S$689 billion to about S$726 billion. This suggests that much of the upward revision reflects a larger GDP denominator rather than a change in how digital the economy is. The implied GDP figures and this reading are the author’s arithmetic on rounded numbers, not an IMDA statement.

IMDA has previously attributed revisions to this series to annual updates of Singapore’s national accounts by the Department of Statistics. The 2024 restatement is consistent with that pattern, although the sources cited here do not state the reason for it. For example, IMDA’s 2024 release put the 2023 digital economy’s value added at S$113 billion, or 17.7% of GDP, [6] and the 2025 release revised it to S$116.1 billion, or 18.0%. [5] Both figures were official; they came from different vintages of the data.

The practical lesson is about comparing years. Using the revised nominal figures for both years, the digital economy grew 5.6% from 2024 to 2025. This is a nominal rate and is not adjusted for inflation. Set the new 2025 figure against the 2024 figure as first published and the apparent jump is about 12.5% (the author’s calculation: S$144.1 billion against S$128.1 billion), more than twice the growth rate calculated using the revised nominal figures. Mixing vintages overstates the year-on-year increase.

Technology is wider than the technology sector

The most useful finding for an investor remains where the activity sits. Around two-thirds of Singapore’s digital economy in 2025 came from digitalisation outside the information and communications (I&C) sector, and the I&C sector contributed the remaining third. [1] In the 2025 edition, the key non-I&C contributors were finance and insurance, wholesale trade and manufacturing. [4]

The tech workforce tells a similar story. It grew 3.8% to 222,200 in 2025, and non-I&C sectors accounted for 59% of all tech professionals. Tech employment in those sectors grew 5.3%, against 1.8% in the I&C sector. [1] In other words, much of the digital economy is banks, traders and manufacturers using technology, not only companies that sell it.

AI use is broadening in the same way. Adoption among SMEs rose from 14.5% to 23.4%, and among large local firms from 62.5% to 70.4%. [3] These are survey-based adoption rates. They show how widely AI is used, not how much value it creates or who captures it.

Policy is pushing in the same direction

Public investment adds to that picture. In Budget 2024, announced on 16 February 2024, the government committed more than S$1 billion over five years to AI compute, talent and industry development. [7]

Smart Nation 2.0, launched on 1 October 2024, set three goals for the next phase of digitalisation: trust, growth and community. [8] Its growth goal focuses on strengthening the digital economy and helping businesses and workers adapt, and the launch included an extra S$120 million for AI in scientific research.

Singapore within Southeast Asia

The regional view helps place Singapore’s numbers, but it uses a different measure. The e-Conomy SEA 2026 report by Google, Temasek and Bain & Company, released on 21 October 2026, projects that Southeast Asia’s digital economy will reach US$368 billion in gross merchandise value (GMV) in 2026, up 17% year on year, and exceed US$1 trillion by 2035. [9]

The two sets of figures are not interchangeable. IMDA’s numbers measure value added, the digital economy’s contribution to Singapore’s GDP, in Singapore dollars and drawn from the national accounts. The e-Conomy SEA report measures GMV, the total value of goods and services transacted through digital platforms, in US dollars and estimated by the report’s authors. The 2026 GMV figures are projections made when the report was published in October 2026, not outcomes, and none of them should be compared directly with IMDA’s share of GDP.

The 2025 edition of the report projected that the region’s digital economy would pass US$300 billion in GMV in 2025. [10] Dividing the 2026 projection by the stated 17% growth gives a 2025 base of roughly US$315 billion. That is the author’s calculation on rounded figures, not a number the 2026 report states, and because it is derived from the 2026 report’s own growth rate it is not independent evidence for or against the earlier projection. A proper check would need the 2025 figure published directly by the report’s authors.

Singapore is a modest part of regional GMV: the report projects its GMV at US$31 billion for 2026, up 8%, and US$59 billion by 2035. [9] Where it stands out is capital and infrastructure. The report says most of the region’s AI infrastructure funding has gone to platforms headquartered in Singapore, [9] and that private deal value in AI compute and digital infrastructure across the region reached US$20 billion over the last 12 months, led by the US$11 billion acquisition of ST Telemedia Global Data Centres. [9] It also reports that generative AI use has reached 70% of Singapore’s working population, or 3.2 million people, and that active user penetration of digital wealth platforms is nearly triple that of the next-ranked market. [9]

That contrast matters for investors. Singapore often acts as a regional base where capital, talent and headquarters gather, while much of the consumer growth happens in larger neighbouring markets.

Taihei Yamada on Reading Technology Growth

For Taihei Yamada, Singapore’s rising digital share of GDP shows that digital activity matters more to the economy each year. It does not show which companies capture that value, or on what terms. The gap between those two statements is where investment analysis begins.

A useful approach keeps three things apart: what the official data reports, what a particular business earns from that trend, and what an investor assumes about the future. The data is a starting point for questions, not an answer to them.

Singapore’s figures are valuable precisely because they are detailed, dated and revised in the open. The 2024 restatement is a live example: the same year now carries two official values, and only the version label tells a reader which one a comparison is using. Reading technology investment across Asia with the same care, by naming the source, the period and the version, makes any conclusion easier to test.

General educational commentary; not an investment recommendation, an offer or a forecast of returns.

Sources

The sources support the digital economy figures. The investment perspective is the author’s own.