Small and medium-sized enterprises ( SMEs ) in Singapore are looking beyond the domestic market and accelerating technology adoption for business growth, a recent survey finds.

According to the latest DBS Business Pulse Check Survey, 82% of the 730 companies polled between December 2025 and January 2026 plan to expand overseas this year. This outward-looking view is led by firms in the information and communications as well as manufacturing sectors.

Reaching new customer bases ( 49% ) and building a stronger overseas brand presence ( 43% ) are the primary drivers, reflecting a strategic shift towards diversifying revenue streams and markets, the survey shows.

SMEs looking to enter new markets highlight the importance of connections with trusted local partners, access to market insights, and guidance on local regulatory requirements to support successful market entry and scaling.

In addition to regional expansion, technology – particularly artificial intelligence ( AI ) – is playing an increasingly prominent role in how companies are strengthening their competitive edge. About 67% of respondents said they are already applying some form of AI in their work processes.

 However, adoption remains uneven across industries, with only 12% having fully integrated AI across their operations, indicating significant headroom for broader and deeper deployment. SMEs in the information and communications, electronics manufacturing, and professional services sectors are most advanced in their AI adoption, while those in the wholesale and trade sectors are the least likely to have adopted AI solutions.

To further scale AI adoption, respondents cite the need for financial support or grants, expert guidance on how to apply AI more effectively, and partnerships with technology providers as the most helpful forms of support in translating usage into tangible productivity gains.

SMEs are also making notable progress in their sustainability journeys as they align with evolving customer and market expectations. The proportion of businesses that consider themselves sustainability-ready has risen to 49%, up from about one-third a year ago. Notably, the share of firms that feel unprepared has declined to 27% from 60% last year.

To sustain the momentum, SMEs highlight the need for more affordable green technologies, clear step-by-step implementation frameworks, and training to equip staff with relevant skills to compete credibly and effectively as sustainability becomes integral to competitiveness.

These strategic initiatives are being undertaken against a more challenging backdrop. About 36% of respondents said tariffs and trade restrictions have affected their operations, citing higher operating costs and supply chain disruptions, including delays and materials shortages.

Amid these headwinds, sentiment in the year ahead remains measured yet optimistic. Some 57% of respondents expect their business performance to improve compared with last year, underpinned by intentional investments in productivity and expansion into new markets.

 Chen Ze Ling, group head of corporate and SME banking at DBS, says: “The survey reflects the pragmatic approach many SMEs are taking to navigate an uncertain environment. Businesses are taking clear, practical steps – expanding their footprint, investing in AI to drive efficiency, and strengthening their sustainability credentials to stay competitive.”