One in three companies is now doing something that would have seemed absurd three years ago: skipping a software purchase because their team built a working alternative with AI instead. That’s not a startup anecdote — it’s McKinsey’s State of AI in 2026 survey, fielded across 1,719 leaders in 97 countries between May and June, finding that roughly 32% of organisations skipped at least one software purchase this year because AI coding tools made it cheaper and faster to build something custom instead.
The precise finding is “build instead of buy,” not literally “cancelled an existing subscription” — worth being accurate about, since those are different decisions. But if you’re a Singapore SME owner paying for several SaaS tools you only use partially, the underlying shift is still worth understanding.
What “Agentic Coding Tools” Actually Means
You’ve probably heard “AI agents” thrown around loosely. Here’s what it means in this specific context. An AI coding agent isn’t a chatbot that suggests code snippets — it’s a system that can take a goal, such as “build me a customer invoice tracker that pulls from my order data,” and execute it across multiple steps: writing the code, testing it, fixing errors, and delivering something usable. You describe the outcome. The agent does the implementation work that used to require a developer.
Tools in this category — the kind McKinsey’s survey respondents are using — have moved well past autocomplete. They handle full development workflows, and for a well-scoped project, a single technically capable person can now build in an afternoon what used to take a small team a week.
Why This Mostly Isn’t a Singapore SME Story Yet
Here’s the honest part most coverage of this trend skips: McKinsey doesn’t break the 32% figure down by company size — the survey itself was fielded across “the full range of” company sizes. But the underlying question only makes sense for a business that already has developers to redirect; building instead of buying assumes engineering capacity sitting there, ready to be pointed at a new problem. A typical Singapore SME without an in-house developer isn’t in a position to “just build” a replacement for its accounting software or CRM over a weekend, agentic tools or not.
What does transfer to a smaller business is the underlying question the trend is forcing larger companies to ask: for every recurring SaaS subscription you pay for, is the ongoing cost still justified, or would a narrower, purpose-built automation actually solve the specific problem for less? That’s a question worth asking even without an engineering team, because the answer sometimes isn’t “build it yourself” — it’s “there’s a cheaper, more specific tool than the broad platform you’re paying for.”
The Practical SME Version of This Trend
Rather than chasing the build-vs-buy shift directly, the useful exercise is auditing your current software spend against actual usage. Most SMEs carry at least one SaaS subscription bought for a feature set they use a fraction of. Workflow automation tools — no-code, not requiring an engineering team — increasingly cover the specific slice of functionality an SME actually needs, at a fraction of a full platform’s cost.
Singapore’s SME AI adoption nearly tripled in a single year — from 4.2% in 2023 to 14.5% in 2024, according to IMDA’s 2025 Singapore Digital Economy Report, which puts the wider digital economy at 18.6% of GDP. The build-vs-buy conversation happening at enterprise scale previews a question every business, regardless of size, should already be asking about its own software stack: are you still paying for the whole platform, or just the one feature you actually use?
Enterprise Singapore’s Productivity Solutions Grant still co-funds automation tooling — for pre-approved vendors only, and not for much longer. PSG stops taking new applications on 29 September 2026 and is being folded into the new EDGE Grant, so it’s worth checking what the PSG grant covers now, before assuming a leaner, more targeted tool is out of budget — or out of time.
About the Author
Keith Kwai is an independent consultant helping Singapore SMEs with digital transformation and AI adoption. He has 25 years of marketing and digital experience across global MNCs including Motorola, Singtel, Creative Technology, Epson, and Scholastic International. He builds agentic AI systems — not just advises on them. Connect at keithkwai.com or LinkedIn.
Sources: McKinsey, The State of AI in 2026: On the Road to ROI (May–June 2026 survey); IMDA Singapore Digital Economy Report 2025; Enterprise Singapore Productivity Solutions Grant (PSG) guidelines, closing 29 September 2026 in favour of the EDGE Grant.