Much like the telegraph, railway, and internet before it, AI promises to reshape economies, societies, and the very nature of work. For technologists, AI’s potential impact could dwarf its predecessors, with implications for nearly every industry and function, across manufacturing, mobility, retail, and beyond.
One thing is certain: AI is here to stay, and the digital gold rush is in full swing. If we revisit John von Neumann’s famous 1955 essay, “Can We Survive Technology”, we can see why adopting transformative technology at scale is mission critical: countries that lag behind will be left behind — both economically and existentially.
Singapore has no intention of being left behind.
Its ambition to carve out a leading role in the global AI race is plain to see. The city-state is on a mission to triple its AI talent pool to 15,000 practitioners by 2025, a goal anchored in the government’s updated National AI Strategy (NAIS 2.0). This runs parallel to massive investment in AI infrastructure, with more than US$1 billion being deployed into AI over the next five years.
However, while businesses are eager to ramp up AI hiring, the supply of specialists and candidates who can incorporate AI tools into their existing workflows falls woefully short of demand. This is further exacerbated for startups and high-growth digital natives who often find themselves outgunned by global big tech players.
For these players to remain impactful, they need to reassess traditional hiring practices, their relationship with global talent, and start prepping for a dynamic regulatory ecosystem.
Plenty of investment, scarce talent, one major dilemma
The global AI talent pool is still (relatively) meagre. While the best education systems in the world are pivoting to ensure the future workforce are equipped with the tools they need to navigate an automated world, today’s businesses don’t have the luxury of waiting.
AI talent is also frustratingly immobile: only 2.2 per cent of AI professionals move internationally for work each year, according to Boston Consulting Group. In Singapore, this challenge is compounded because, as a city-state, it simply doesn’t have the luxury of access to a hundred million strong domestic talent pool.
So on one hand, in South East Asia, we see that Singapore currently leads regional AI investment, spending a whopping US$68 per capita — dwarfing Indonesia’s US$1.9 and Vietnam’s US$0.95. But on the other, we see the Ministry of Manpower sound the alarm, flagging AI as a critical shortage sector at the very same time. It has the resources but simply doesn’t have enough of the right hands to use them.
For startups, the struggle is even more acute. Established players like Google and Microsoft are aggressively absorbing talent, leaving emerging firms scrambling to compete. We need only look at Google’s 2023 acquisition spree to see this — poaching talent from AI startups backed by over US$2 billion in funding.
So for those building teams today, making sure their hiring strategy is fit-for-purpose for the automation age is absolutely essential.
Digital transformation demands new hiring playbooks
Looking beyond conventional hiring criteria can help startups address their talent gap.
Adopting skills-first hiring practices is a good start: instead of insisting on narrowly defined “AI experts,” companies can tap into a broader pool of engineers with foundational AI knowledge for example. The proliferation of modern, intuitive AI APIs makes this strategy more viable than ever.
Re-skilling and up-skilling must form part of any long term strategy as well, but despite what some L&D consultants will tell you, it’s not a panacea to talent woes. Only 53 per cent of Singaporean talent are willing to re-skill for the AI era for example, lagging behind Southeast Asia’s 63 per cent.
While a greater emphasis on continuous learning is needed, every talent strategy also needs a robust international element — and like L&D, it needs reassessing.
Winning the AI talent race with cross-border teams
Singapore has long turned to its Southeast Asian neighbours to augment its talent capabilities, mostly via near-shoring and offshoring strategies. In fact, post -pandemic, 98 per cent of Singapore-based companies used outsourced teams for their IT needs.
This outsourcing model has been a cornerstone of economic growth for nations like the Philippines, where the BPO industry contributes nearly US$30 billion annually, over 10 per cent of the nation’s GDP. Traditionally, these BPOs focused on high-volume, transactional roles such as customer support, market research, and back-office operations.
However, the region has now evolved into a hub for highly skilled, globally lauded talent, particularly in Vietnam, Malaysia, and the Philippines.
These markets offer an often overlooked untapped talent pool tailor-made for high-growth digital startups. For example, 84 per cent of Malaysia’s workforce already uses AI tools daily, Filipino digital startups raised close to US$1 billion last year, and Vietnam boasts a robust 400,000-strong IT workforce rapidly adopting emerging technologies.
Instead of only relying solely on these neighbours for repetitive operational tasks, startups should now tap into a high-skilled, multi-region workforce at scale.
Post-pandemic advancements in remote infrastructure and Employer of Record (EOR) platforms, like Remote and Deel, have now made it easier than ever to build agile, cross-border teams. Region agnostic hiring is now streamlined, perfect for companies with little internal red tape.
This shift allows Singaporean digital natives to fill critical AI gaps without breaking the bank, particularly in mid-level positions where the skills shortage is most acute.
Future-proofing with distributed teams and smart hiring
Embracing this mindset early may pay dividends, as AI begins to reshape these BPO markets entirely.
Consider Superfocus, an AI-driven startup developing virtual customer service agents capable of responding to customer queries with human-like precision at a fraction of the cost. These virtual agents could soon provide experiences indistinguishable from human interaction, drastically reducing the need for human customer service professionals.
And it doesn’t stop there. Platforms like Electric Twin, launched by the former Digital Advisor to the British Prime Minister, take this transformation a step further. Simulating human behaviour in real time through “synthetic people,” the tool is built and billed as a solution for political strategists to digitise the campaign process. However, if fully realised, it could upend the entire market research industry, rendering lengthy in-person focus groups and traditional surveys obsolete.
While these advancements may trigger alarm bells for some, optimists like investor and early internet pioneer Marc Andreessen see this as a natural evolution. Decrying the “lump of labour” fallacy, he suggests AI is a net good that would simply optimise existing BPO industries.
And with Malaysia putting digital transformation at the heart of its 2025 Budget, and Google launching an ASEAN wide AI literacy programme, we have reason to be positive.
For Singaporean companies, this would mean SEA neighbours with increasingly capable digital talent pools, fulfilling the same needs but at breakneck speeds.
To ensure Singapore firms can navigate the coming transformation, they must not only embrace flexible global hiring strategies, but consider how to effectively use hybrid hiring models.
Agile talent strategies for a dynamic AI landscape
Many startups are already used to the “Fractional” hire model; in fact, we’ve seen fractional roles skyrocket by 53 per cent since 2020. But typically this has centred around traditional C-Suite hires.
But startups should start thinking a bit more creatively about how these types of hybrid models can address a wider array of needs.
For example, fractional hiring could facilitate access to functional expertise far earlier in the growth journey than typical. Understandably, for founders trying to make every dollar from their Series A count, a full time hire might not seem the most judicious use of their capital.
But a fractional functional head could help them navigate what is expected to be a hugely dynamic AI regulatory landscape.
While Europe and the US debate stringent AI regulations, Singapore has taken a lighter approach. This hands-off strategy has currently borne fruit – it’s hard to imagine the aforementioned external AI investment reaching such levels without it.
But this approach won’t stay sedentary, and the EU AI Act in of itself is already having an impact on Singapore based brands working with European customers. As foundation models become more ubiquitous, companies need to keep a keen eye on regional policy in particular, so they can plan effectively and adapt if needed.
The US and China’s technology standards continue to bifurcate for example, and Singapore’s position as a neutral hub, with strong English and Mandarin proficiency, puts it in a unique position. Building in strategies for a potential technological decoupling between the world’s two largest powers and other macro events could give firms a competitive edge.
Acquiring capable talent is the key growth
For startups and scale-ups alike, they need to act fast. But, as Singapore-based companies explore the integration of emerging technologies into their operations, it’s important to avoid becoming overly enamoured with flashy new tools. The real value lies not just in the tools themselves but in the skill of those who wield them.
After all, a pen becomes a powerful instrument in the hands of Ernest Hemingway, but in the hands of a monkey, it’s nothing more than a stick.