In a rapidly evolving digital landscape, few topics spark as much curiosity, debate, and ambition as AI. At the heart of Singapore’s transformation into a Smart Nation1 is Minister Josephine Teo, who leads the Ministry for Digital Development and Information. In this insightful conversation, McKinsey partner Vivek Lath sits down with Minister Teo to explore Singapore’s vision for AI, the challenges of adoption, and the opportunities for both government and industry.
Their dialogue goes beyond policy and strategy—it delves into the human side of technological change, addressing workforce transformation, trust, and the global aspiration for digital leadership. Minister Teo shares candid reflections on what it takes to build an AI-ready society, the importance of collaboration between domain experts and technologists, and how Singapore is setting standards for responsible innovation.
Vivek Lath: Minister, what is Singapore’s overarching vision for AI, especially regarding development and adoption?
Minister Josephine Teo: Our vision is shaped by Singapore’s circumstances. After decades of solid economic growth, we asked ourselves: How do we sustain this for our citizens, and organize ourselves efficiently to benefit them? For example, government spending is only 16 percent of GDP, yet it delivers strong outcomes in housing, healthcare, and education.
In the next bound, our goal is to harness AI as a general-purpose technology to sustain wage growth and productivity improvements for Singapore. To achieve these outcomes, we focus on three main spheres of activity: industry, research, and importantly, government. The government must “walk the talk,” practice what it preaches, and have a good sense of what it takes to really level up AI capabilities. Other enablers we work on include building workforce capabilities, fostering communities of practice, providing infrastructure (such as compute), and ensuring a pro-innovation regulatory environment that fosters trust.
Vivek Lath: How do you drive adoption of new technologies among government employees and the wider public?
Minister Josephine Teo: Adoption and diffusion of technology are easier said than done. Initial attempts may not be very rewarding, but that should not discourage us. Within government, we’ve also been experimenting with AI, with clear guidelines on usage and accountability. For example, we allowed public officers to use generative AI early on by providing a secure version of ChatGPT. Later, we built a platform for them to create their own AI bots. So far, about 16,000 bots have been built—some are excellent, most are average—but the point is to encourage boldness and a willingness to try.
In industry, it will take time for AI and other technologies to percolate through to every corner of the economy. So, we start by working with a smaller group of companies that are ready to experiment, helping them set up AI centers of excellence. Progress has been energizing: Around 50 centers have been established in the past 12 to 18 months.
Through my visits, I’ve seen companies adopt AI in different ways. Some use it cleverly to improve workplace productivity—helpful, even if not game-changing. Others apply AI at the very core of their business model. That’s heartening because it shows CEOs and their teams are willing to find new ways to tackle business challenges, and AI has provided, if not the whole solution, at least a big part of the answer.
Vivek Lath: How do you ensure that the workforce is not left behind as AI adoption accelerates?
Minister Josephine Teo: No one has all the answers from the start. Some tasks are better suited for AI, others for humans. The key is to use AI smartly—make it the best teammate for people, not a replacement. Collaboration is crucial, too. Domain and functional experts need to work hand in hand with AI specialists to figure out how to get the most out of it. Take manufacturing, for example: Process engineers know the realities on the ground, while AI experts bring an understanding of relevant models and techniques. Together, they can create solutions that really make an impact.
Vivek Lath: How does Singapore position itself to win in the global AI race, given infrastructure and talent challenges?
Minister Josephine Teo: Every country starts from a different point. For Singapore, our journey began back in the 1980s. Over the years, we’ve built layer upon layer—from computerization to the internet, then mobile technologies—to reach the level of digitalization we see today in our society and economy. Right now, we estimate that our digital economy—both the core ICT sector and its use across other industries—accounts for about 18.6 percent of GDP. And increasingly, more tech workers are employed outside the traditional ICT sector.
We’re continuing to build these layers, driving broad-based adoption while also strengthening areas of excellence. At the same time, we’re thinking ahead: What will the AI industry look like in Singapore five or ten years from now? That’s a big part of our focus moving forward.
Vivek Lath: How can Singaporean companies set global standards in AI adoption?
Minister Josephine Teo: Companies like Grab are good examples. Their efforts don’t just benefit consumers, but also the merchants signed up to their platform. For example, Grab’s AI Assistant allows merchants to analyze promotions and business performance using natural language, leveraging sales data on the platform. With skills training (for example, SkillsFuture courses through NTUC LearningHub), merchants can learn to use these tools effectively and understand their businesses better, often at low cost given the training subsidies available.
Vivek Lath: How is Singapore protecting citizens from risks such as deepfakes, scams, and loss of trust?
Minister Josephine Teo: There’s no easy solution. We have to tackle these issues methodically and in a targeted way. We started with laws against fake news that require labels on false statements of fact.2 Then came the Online Criminal Harms Act, which also addresses scams, followed by a law to deal with synthetic content in elections. Soon, we’ll introduce a new online safety act that seeks to give individuals better protection and recourse by holding perpetrators accountable.3 Wherever possible, we prefer to leverage existing laws and regulations—such as using the Workplace Fairness Act to address AI-driven discrimination—but when necessary, we’re ready to add to the existing suite.
Vivek Lath: How does Singapore collaborate internationally on AI standards and governance?
Minister Josephine Teo: We take a practical approach. A few years ago, we started working on cross-border data flows—which are critical for AI—by setting up frameworks for data management and safeguards within the ASEAN [Association of Southeast Asian Nations] community. When it comes to AI-specific standards and governance, global efforts are still in the early stages. So, we began by laying out ethical principles for adoption and moving research into practice through initiatives such as AI Verify for traditional AI and Project Moonshot for generative AI, which provide testing frameworks and software toolkits. We’ve also built our own tools for government use, such as Litmus and Sentinel.4 Globally, the journey toward AI standards and governance is still at the starting line, and international dialogue and collaboration will be essential as future standards take shape.
Vivek Lath: What advice would you give to corporates starting their AI journey?
Minister Josephine Teo: If you haven’t started, it’s time to think about it. If you have started, don’t be discouraged. Create sandboxes, improve conditions for success, and take baby steps. Build support not just with the board, but also employees, customers, and stakeholders.
In 20, 30 years, what we’d like to see with successful AI adoption is that there is still trust in society.
Vivek Lath: What metric would make you proud of Singapore’s AI progress by 2030?
Minister Josephine Teo: Ultimately, the most important metric is trust—trust in each other, institutions, and society. Trust cannot be legislated; it arises when livelihoods are secure, institutions are reliable, and promises are kept. AI can enhance or disrupt trust, so maintaining it is the true measure of success. In 20, 30 years, what we’d like to see with successful AI adoption is that there is still trust in society.