Singapore’s small businesses are the heartbeat of our economy—driving growth, creating jobs, and shaping the future with agility and resilience. In the past couple of years, the number of small businesses in Singapore grew by an impressive 5%, outpacing larger enterprises, which saw less than 1% growth. They have also expanded their workforces at double the rate of big companies—4% versus 2%.
Thanks to years of digital transformation, these businesses have closed the gap with larger firms in foundational digital skills. Today, nearly 49% of small business employees possess digital skills, compared to 53% at large enterprises, which is a sign that digital basics like email, spreadsheets, and cloud collaboration are now mainstream across companies of all sizes. Government initiatives, industry partnerships, and a culture of lifelong learning have all played a role in making digital literacy accessible and expected in the workplace.
But as artificial intelligence (AI) becomes the new frontier, a fresh challenge is emerging. If the current trajectory continues, the gap in AI capability will widen, putting these smaller companies at risk of falling behind in productivity and competitiveness.
Where small businesses lag behind
Those who can harness AI effectively will be better positioned to innovate, serve customers, and grow sustainably.
And while small business employees are optimistic about the benefits of AI—66% believe it will improve their work lives—the reality is that only 26% of small business professionals use AI for advanced tasks like strategy or data analysis, and fewer than half apply it to everyday work. This gap here sometimes stems from mindset: many may find using AI tools more daunting than they actually are, which creates a confidence barrier that holds them back.
AI literacy, which means using AI tools confidently in daily work like drafting proposals, summarising meetings, analysing data, and automating routine tasks, remains one of the biggest opportunities for Singapore’s small businesses. Skills per employee for companies with 11–50 employees grew only 67% year-over-year, compared to 99% for large companies with 1001+ employees. Closing this gap requires addressing both the practical skills development and the underlying mindset that causes people to hesitate from taking that first step.
A practical playbook for closing the gap
As an HR leader, I believe capability grows through hands-on, supported learning. And it’s clear that small business employees have the appetite for short bursts of hands-on learning that fit into their busy schedules.
Here’s what small business leaders can do:
- Make AI literacy a team priority: Treat prompt engineering and AI tool use as foundational skills, just like digital basics once were. Make short, bite-sized online courses available so employees can learn in their own time. Encourage peer-to-peer sharing as well—let employees who master a tool teach others. Celebrate small wins to build momentum.
- Focus on experiential learning: Small business employees know what works—35% prefer real-life projects, 34% hands-on practice with AI tools, and 33% short, focused virtual tutorials. These approaches accelerate capability and turn learning into immediate results. Consider running “AI hack days” where teams tackle real business challenges using new tools, or set up regular lunch-and-learn sessions to share tips and success stories.
- Start small: Pick one function that can be automated by an AI tool, provide short, bite-sized training, encourage employees to experiment, and measure the impact. Over time, employees will gain confidence.
AI should make work more human
AI should make work more human, freeing us to spend time with customers, craft genuine messages, and nurture relationships.
And this is where Singapore’s small businesses are already winning. They excel at building authentic brands and strong networks—75% of SMB marketers say AI speeds up content creation, but 70% believe trust still depends on human voices. Professionals in small businesses are expanding their networks at a remarkable 11% year-over-year, compared to 9% at large enterprises, turning relationships into leads, better hiring, and smarter decisions.
These human strengths—authenticity, trust, and connection—are the foundation for long-term success. By combining AI capability with their natural strengths and by building confidence in their own ability to effectively leverage these tools, Singapore’s small businesses can stay agile, competitive, and ready for whatever comes next.
About the author
Sumita Tandon is a seasoned HR leader with a transformative vision, currently serving as the HR Director of APAC at LinkedIn. In this capacity, Sumita is responsible for leading LinkedIn’s HR Business Partners and creating a transformational environment of growth and innovation for employees across the APAC region.
