This chapter critically examines the evolving landscape of assessment in applied, study-focused educational institutions, particularly institutes of higher learning (IHLs), amid the growing integration of artificial intelligence (AI). As AI becomes more embedded in education and the workplace, traditional assessment methods must be reimagined to remain relevant and prepare graduates for a volatile, uncertain, complex, and ambiguous (VUCA) world. In polytechnics and similar institutions, where practical skills and real-world application are key, assessments should not only measure competencies accurately but also foster future-oriented learning environments. The chapter explores how assessments must go beyond evaluating knowledge retention to include higher-order thinking, adaptability, and real-world application. It highlights how AI can enhance personalisation and feedback, improving learning outcomes, while also acknowledging concerns around fairness, validity, sustainability and ethics. A balanced, well-designed approach is essential—one that leverages AI’s strengths without compromising integrity. Ultimately, rethinking assessment in this AI era is crucial for IHLs committed to equipping students with the skills and mindset to navigate an unpredictable global future. © 2026 selection and editorial matter, Asha Kumaran, Boey Chee Kin, Cleta Milagros Acebedo, Gabrielle Lai, Linda William, Teo Chee Leng, Vijayan N, and Zhang Huiyu; individual chapters, the contributors.
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