September 18, 2025
SINGAPORE – Artificial intelligence is transforming software innovation from a technical activity into a powerful engine for growth, with Singapore business executives saying that investment in the technology pays for itself in less than two years.
These insights are among the key findings from a survey called the Economics of Software Innovation. The report was commissioned by software company GitLab and released on Sept 18.
Conducted from April 25 to May 19, the survey polled 2,786 executives at the C-suite level with some decision-making authority over software at their companies. The executives were from eight different markets, including Australia, Japan and the US.
Insights were also gathered from 252 executives in Singapore, representing industries such as financial services, manufacturing and the public sector.
In Singapore-specific insights, the report found that investment in AI software innovation could unlock more than $6 billion in economic value.
In the survey, software innovation was defined as creating new or significantly enhancing existing software to introduce novel capabilities, improve efficiency or solve problems in new ways.
Business leaders here estimated that 710 hours, or 89 business days, have been saved over the past year as a result of investing in AI software innovation.
Using this time savings, the report estimated that companies could save costs of about $31,000 per developer. When this figure was multiplied by the nation’s 200,000 software developers, the $6 billion economic value was derived.
Globally, the report estimated that AI software innovation could unlock US$750 billion (S$962 billion) in economic value.
This comes as AI transforms jobs, including in the tech space.
According to a separate report by recruitment agency Hays, while software development remains the most in-demand skill globally, demand for developers in Singapore declined in 2024 due to automation and the offshoring of roles to lower-cost locations.
This mirrors global trends of a tight talent market, where demand for skills in evolving areas like AI is outstripping the supply of qualified workers.
The GitLab report found that AI is delivering measurable business outcomes, with Singapore executives seeing a 39 per cent increase in revenue over the past year, and a 44 per cent increase in developer productivity.
All the respondents surveyed think AI adoption can help reduce costs for software development.
The areas with the most cost savings include the automation of repetitive tasks so that developers can focus on problem-solving; enabling predictive maintenance for potential software issues; and determining efficient methods of resource allocation.
In the next 18 months, Singapore executives said their priorities for AI include leveraging it for cost savings, deploying it for data privacy and security, and improving developer or employee experience with it.
The report also found that five years ago, the biggest hurdle to increased investment in software innovation was technical debt, which refers to the extra work and long-term costs that arise from choosing quick, easy solutions in software development instead of better, more sustainable ones.
Today, however, the biggest challenge is market uncertainty.
Companies are now seeing AI adoption not as experimentation, but as the norm to be deployed strategically.
The survey found that 37 per cent of Singapore business leaders said their companies are employing a balanced strategy of combining strategic AI investments with targeted implementations to improve both long-term outcomes and near-term efficiency.
Meanwhile, 25 per cent of local executives said their companies are undergoing long-term transformation by integrating AI across multiple functions as part of a long-term strategy for competitive advantage and business model evolution.
Mr Craig Nielsen, vice-president of Asia-Pacific and Japan at GitLab, said that AI-fuelled software innovation is an undeniable source of competitive advantage and economic impact.
“The companies pulling ahead are the ones blending AI with human expertise, leveraging agentic AI with intention, aligning software strategy with business value, and building guardrails to innovate responsibly.
“With over $6 billion per year in potential value at stake, the organisations that optimise this human-AI partnership today will define the future of software tomorrow,” said Mr Nielsen.