# How Singapore can run the global AI race on its own terms > Source: > Published: 2026-08-24 23:00:00+00:00 # How Singapore can run the global AI race on its own terms By turning space constraint into an asset for building systems, the Republic can export its capabilities [SINGAPORE] [At the National Day Rally](https://www.businesstimes.com.sg/singapore/national-day-rally-8-things-know-more-childcare-leave-higher-bto-income-ceiling) on Sunday (Aug 23), Prime Minister Lawrence Wong offered the outlines of a philosophy for how Singapore views technology. He said: “We will harness the power of new technology – but do so on our own terms.” In a world increasingly dominated by contests of scale – which country is the biggest, owns the most land and has the most military might – that is a more provocative thought than might seem apparent. Singapore needs to find a way of changing the game to one that it can play a meaningful role in – and win. Events of the past year have shown that, in technology, size is not destiny. [One example is ](https://www.businesstimes.com.sg/companies-markets/chinas-top-ai-model-evaded-testing-environment-researchers-say)[China’s Kimi](https://www.businesstimes.com.sg/companies-markets/chinas-top-ai-model-evaded-testing-environment-researchers-say) and [Japan’s Sakana](https://www.businesstimes.com.sg/companies-markets/telcos-media-tech/top-japan-start-sakana-ai-touts-nature-inspired-tech)[ challenging](https://www.businesstimes.com.sg/companies-markets/telcos-media-tech/top-japan-start-sakana-ai-touts-nature-inspired-tech) far better-funded [artificial intelligence labs](https://www.businesstimes.com.sg/startups-tech/openai-files-us-ipo-after-rival-anthropic-ai-giants-head-public-markets) by using different methods to advance their AI models. These challengers share a lesson: By changing the terms of competition, rather than playing the incumbents’ game, smaller players can matter. For the compact economy that is our island home, the question this poses is critical – what is our distinctive contribution to the global tech race going to be? We offer three ideas on the ways running the global tech and AI race on our own terms can look like. ## People at the core PM Wong illustrated Singapore’s approach with an example we are all familiar with: ride-hailing. More than a decade ago, Singapore did not keep the disruption out. It welcomed the innovation, introduced rules for fair competition and helped taxi drivers through the transition. Even as the country continues to embrace new technologies, while supporting workers through change, AI will make that balance harder. If the technology delivers meaningful gains, some tasks will disappear, some teams will require fewer people and some roles will cease to exist in their current form. At the level of the economy, that is productivity. For the individual whose role disappears, it is displacement. Both can be true at once. But Singapore starts from an unusual position. We are a labour-constrained economy facing slower workforce growth. That means AI, when it allows a nurse, engineer, technician or small-business owner to accomplish substantially more than they could have alone, can address a real constraint on growth. The challenge is to keep [two transitions in sync](https://www.businesstimes.com.sg/singapore/singapores-ai-transition-need-not-pit-workers-against-businesses-says-tan-see-leng): how quickly AI changes work, and how quickly people move towards new work. That requires more than putting AI tools into today’s organisations. Tasks will need to be redesigned, and people will need to be supported, as their roles change and new ones take shape. [Singapore’s ambition to develop 100,000 “AI-bilingual” workers](https://www.businesstimes.com.sg/singapore/budget-2026-singapore-train-100000-workers-apply-ai) – people combining AI fluency with domain expertise – is the first part of this pivot. The second part is ensuring that this fluency translates into real, tangible gains in what people are able to do. That is Singapore’s bet – by becoming unusually good at moving people towards higher-value work as technology takes over lower-value tasks, the speed of that process becomes an asset in itself. ## Build systems, not islands For Singapore, size is a clear constraint. We cannot offer innovators the world’s largest test market, but our compactness creates something many larger economies find harder to reproduce: the ability to bring an entire system together. PM Wong’s remarks on AI agents captured why this matters. As AI becomes more autonomous, the opportunity to leverage it for growing businesses increases. But so do risks that individual companies cannot always manage alone. His response was not for Singapore to hold back on the technology, but instead anticipate those risks, build practical safeguards and [keep people in control of it](https://www.businesstimes.com.sg/singapore/ndr-2026-singapore-wisely-says-no-tech-techs-sake). Singapore has useful conditions for doing this at system level. Research institutions, global technology companies, financial businesses, sophisticated operators, regulators, entrepreneurs and capital sit in proximity. This shortens the distance between identifying a problem, testing a solution, establishing safeguards and deploying it. [The ](https://www.businesstimes.com.sg/singapore/budget-2026-singapore-establish-national-ai-council-chaired-pm-wong-launch-national-ai-missions)[national AI Missions](https://www.businesstimes.com.sg/singapore/budget-2026-singapore-establish-national-ai-council-chaired-pm-wong-launch-national-ai-missions), announced by PM Wong during Budget 2026, provide the foundation to push this integration further. Imagine, for example, trusted infrastructure that allows participants in an industry to make better use of shared data without surrendering control of it, such as helping financial institutions identify fraud patterns earlier or healthcare providers build a fuller picture of patient needs. Crucially, these systems would be open and modular, so that small and medium-sized enterprises, not just large companies, can plug into the parts most relevant to them. This is where Singapore itself can become the test bed. A national system is a far more unforgiving trial than a lab pilot. But succeeding under these conditions is exactly what will give Singapore-based enterprises battle-tested playbooks, with a better chance of succeeding in some of the trickiest industries globally. Those same systems, and the software and operating models behind them, are also the launch pads for products and companies that can travel. ## Made in Singapore, for the world While Singapore is too small to be the end-market for most category-defining AI businesses, we have historically been stronger at building excellent systems than creating globally scaled companies around them. AI may be generating conditions where our strengths matter more. Around an AI-enabled healthcare, transport or financial system, potentially exportable assets sit: software, models, assurance tools, data architectures, operating processes and companies. Consider the healthcare examples PM Wong highlighted: AI creating personalised exercise plans through Healthier SG and assisting radiologists to read mammograms. And the goal should not end with a better system for Singapore. The larger commercial question is what capabilities can be built around such deployments that solve similar problems elsewhere. Asean provides a natural next test. [Singapore’s chairmanship of the group in 2027](https://www.businesstimes.com.sg/international/singapore-advance-ai-agenda-asean-chair-focus-cross-border-data-flows-smaller-firms) comes as the region seeks deeper integration, while its diversity makes it a demanding environment to scale AI in. A solution from Singapore, if implemented in Asean, will encounter different languages, infrastructure, cost structures, regulations and levels of digital maturity. That difficulty is valuable. If an AI-enabled system built in Singapore can be adapted successfully in Asean, it has passed a far more meaningful test of portability than one built for a single, homogenous mega-market ever would. It could become a global lighthouse for how AI is deployed in very different operating environments. ## Rewriting the scorecard PM Wong described a world becoming more contested, less stable and less trusting. His response was not for Singapore to turn inward, but instead build more connections and harness technology on our own terms. Our scorecard should therefore be different too. Singapore’s history is one where we have constantly transformed adversity into a position of strength. What others saw as weaknesses have become our proudest calling card, as the little red dot that could. That pattern can also be our future. In an AI race dominated by tech giants, Singapore does not need to become a smaller version of them. We can, perhaps, focus our biggest ambitions on the things that could only have started here – and build them for the world, not just ourselves. **The writers are the co-managing partners of McKinsey’s Singapore office** Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services