Last week's Budget 2024 announcement introduced two notable initiatives, one of which appears to follow from the other: a S$1 billion investment in building AI capabilities over the next five years, and a large boost to funding for upskilling middle-aged, mid-career workers.

While the S$4,000/person SkillsFuture handout brings its own background-heavy local context, the link between increasing use of AI and the need to upskill the workforce has much broader implications at a macro level.

When talent is the main natural resource

Singapore has for decades relied on its small but advanced talent pool as one of its main natural resources, and as its economy pivoted from manufacturing to financial services and leveraging the island's geographic position as a central point within the region, that talent pool has had to pivot as well – sometimes with great difficulty, especially for older workers.

The Singapore government has traditionally attempted to supplement the workforce via the 'buy' method: bringing in skilled expatriates. But in recent years, changing political and economic climates worldwide and locally and a strained social compact have made it much trickier to continue with that strategy. Two approaches remain: 'build' talent, and 'bot' talent – automation, or AI.

Automation has been well in place across Singapore's economy for years, and the push to invest in the AI industry is a natural next step. But AI is no different previous iterations of automation: you cannot plonk it down in a workplace and expect it to immediately solve all problems. It requires a matching skillset, in other words the 'building' of talent.

So far, reactions to the move also highlight the importance of this tandem shift. In commentary received by People Matters, consultants and business leaders alike have pointed out the importance of the AI industry and also, whether related to AI or separately, the importance of upskilling in the first place. For instance, KPMG infrastructure advisory partner Deven Chhaya pointed out that developing new skills is one of the best ways Singapore can stay relevant in the current economic landscape; G-P Asia Pacific general manager Charles Ferguson said that Singapore's competitive advantage lies in its skilled workforce, and companies that adopt new technologies must also ensure employees are equipped with the necessary skills is crucial.

What about individual companies?

From a broad perspective, the shift towards AI and upskilling makes sense, but individual companies will likely face a rocky road – both in utilising the new technologies, and in getting their workforce to use it effectively. The competition for workers able to use new tech is always steep, and Singapore's talent pool is tiny to begin with.

Going by business leaders' reactions to the Budget announcement, even large and well established companies with a strong brand name in the talent market acknowledge this. Dell's Singapore MD, Andy Sim, pointed out that new tech presents new opportunities – for businesses that are equipped to harness it – and also new challenges to employees who are less prepared; AMD's managing director of APAC sales, Peter Chambers, called the pace of AI development “blistering” and warned that it will have, or is already having, severe impacts on organisations’ readiness and willingness to embrace the technology, especially with increasing competition for AI infrastructure assets as larger organisations bring their AI capabilities in-house.

With details of the government's AI funding still pending, it's not presently clear how companies, especially smaller organisations, will be able to leverage Budget 2024 to implement their AI strategies. But the upskilling or 'build' aspect does make sense for these companies, which may not be able to compete with the big players for talent either local or imported.

Some of those big players did provide broad-scope suggestions for AI implementation and upskilling, primarily that whatever strategy is adopted, is adopted as a full overhaul of business processes and approaches and not just as a patch here or there. Cloudflare's APJC managing director Jonathon Dixon said the onus is on everyone – not just companies but also the government and educational institutions – to create viable pathways for employees to leverage AI skills and complement the roles they already fulfil at work. UiPath's area VP for Asia, Jess O'Reilly, suggested that in order to turn AI potential into AI results, organisations need to seamlessly integrate intelligence – both AI and the data powering it – into everyday operations and automate all knowledge work so that employees can be upskilled to carry out higher level activities.

Some important but underserved niches need a boost too

Any discussion of AI today needs to be paired with a discussion of cybersecurity, and Singapore's Budget 2024 did include an investment in national cybersecurity – but the amount was unspecified and no particular emphasis was given to upskilling or reskilling talent in the field.

Among tech segments, cybersecurity talent is exceptionally difficult to buy, build, and retain today, so it's unsurprising that industry commentary on the Budget also included hopes that, as government policy for the AI industry plays out over the coming months, there will be some attention given to this area – and that some of the funding will go into boosting cyber defenses.

“Closing the technology and cybersecurity skills gap must be a collective effort between the government, the people, educational institutions and the private sector,” said CyberArk's ASEAN area vice president Lim Teck Wee. “We look forward to seeing more training and career development initiatives specific to cybersecurity and digital skills as we continue to empower our workforce to be resilient against cyber attacks.