Digital Twin Market

Digital Twin Market Outlook (2023–2033)

The global digital twin market is valued at US$ 5 billion in 2023 and is predicted to touch US$ 95 billion by 2033, expanding at a stupendous CAGR of 34.3% during the forecast period (2023–2033).

A digital twin is a virtual duplication of any physical asset, system, or process that can be used to ensure predictive maintenance and reduce outages over a specified period. A digital twin is created using several IoT sensors that gather real-time data produced during the product development phase and learn, evaluate, and updates itself based on working conditions.

Unplanned downtime, production waste, and pricing trends are three issues that have a substantial impact on firms.

• According to a report by Service Max, a service execution management company, around 82% of organizations have encountered the problem of unplanned downtime and production waste for three years in a row, with an average loss of US$ 2 million.

Manufacturers are seeking a system that can identify probable defects and malfunctions so that they can avoid further losses. The benefit of using a digital twin is that it aids in reducing the extra cost and time required during the production process.

Engineers can improve a product's performance by examining and changing the physical design of the prototype at each phase of the design process. Engineers can simulate the digital prototype created with a virtual twin's assistance and change the prototype's design at any stage during the design process with minimum effort and expenditure.

Digital twin technology can help a variety of industry-related operations, including performance management, process control, configuration management, asset management, and simulation modeling.

The implementation of digital twin technology in conjunction with cutting-edge technologies such as cloud computing, internet of things (IoT), and artificial intelligence is projected to bolster market growth. Companies are employing IoT and AI technologies to capture and analyze behavioral data from existing connected products and IoT devices, which can then be applied to the digital twin model to imitate the usage and performance of the existing device.

This allows product designers and engineers to monitor product performance, detect flaws, and forecast future iterations of prevalent problems. The implementation of these technologies also assists firms in boosting operations and system productivity, thereby enhancing product performance.

Several firms are focusing on using digital twin solutions to streamline their supply chains and operational procedures to rebound from the pandemic's economic damages. As a result, cloud firms like Google Cloud and Microsoft Azure are concentrating on developing a variety of cloud-based digital twin solutions for industry players to provide easy access and customizable solutions.

• Google Cloud introduced a supply chain digital twin in January 2022 with the goal of providing manufacturers and distributors with unparalleled visibility into operations taking place in their supply chains.

During the projected period, global demand for digital twin platforms is expected to be driven by such innovative solutions, the rising need for automation across industries, and new developments in the market.

Report Attributes	Details
Digital Twin Market Size in 2023	US$ 5 Billion
Projected Market Value (2033)	US$ 95 Billion
Global Market Growth Rate (2023–2033)	34.3% CAGR
North America Market Share (2022)	40%
Automotive and Transportation Segment Share (2022)	20% CAGR
Key Companies Profiled	ABB Ltd Accenture plc ANSYS, Inc AT&T Inc AVEVA Group plc Bentley Systems, Incorporated General Electric (GE Digital) IBM Corporation Microsoft Corporation

Why is the Digital Twin Industry Expanding So Rapidly?

“Increasing Adoption of Product Twins in Healthcare and Life Science Sectors”

One of the emerging trends is the use of twin solutions in the healthcare and life science sectors. These technologies are increasingly being used in the pharmaceutical industry to predict procedure completion times, leading to fewer real-world and physical tests or process completions. These aspects aid in designing and evaluating drug applicants.

• Product twin solutions are in the early stages, as per the Swedish Digital Twin Consortium, and could be used to tailor healthcare treatment. The goal is to create secure network models and then computationally match those twins.

With the increased awareness of digital solutions with high product standards and quality control, major players are building digital life science research and development methods.

• In partnership with Ecole Polytechnique Federale de Lausanne (EPFL), Hewlett Packard Enterprise utilized its supercomputer to develop digital models of the brain for scientific reasons.

As a result, significant advances and increased need for advanced technologies in the industry will raise the demand for digital twins.

What are the Obstacles That Companies Providing Digital Twin Technology Experience?

“High Implementation Cost of Digital Twin Technology”

The expense of installing digital twin technology in an organization is quite significant. Digital twin and associated technologies such as manufacturing operations management (MOM), 3D CAD, manufacturing process management (MPM), product lifecycle management (PLM), computer-aided design (CAD), model-based system engineering (MBSE), augmented reality (AR)/virtual reality (VR)/extended reality, and enterprise resource planning (ERP) necessitates a significant investment to be implemented.

Moreover, if the organization or corporation lacks the appropriate support infrastructure and technological base, the cost of deploying digital twin technology grows substantially and becomes more expensive. As a result, the high cost of implementation prevents firms from utilizing digital twin technology.

“Mounting Concerns over Privacy & Security”

Demand for twin solutions centered on technologies like the IoT, artificial intelligence, cloud, and Big Data, is increasing in industries. The solution for building the physical twin includes the integration of several IoT sensors and other digital technologies. With the growing number of programmable electronic devices and IoT sensors, there is an increased danger of security, compliance, data protection, and legislation.

Due to a lack of privacy-related laws, there is a great possibility of a hacker or an anonymous individual easily acquiring the information of mechanisms. Hence, increasing concerns regarding privacy and security are expected to negatively impact the sales growth of digital twin technology.

Country-wise Insights

What Makes the United States a Huge Market for Digital Twins?

“Presence of Prominent Market Players in the Country”

North America accounted for 40% of the worldwide market for the digital twin in 2022. North America is a focal point for technological innovation and an early adopter of digital twins and similar technologies.

The United States is leading the North American market due to the presence of key digital twin providers in the country, such as Bentley Systems, General Electric, IBM, Microsoft, Emerson, ANSYS, Altair, Amazon Web Services, and Oracle. These companies are making significant investments in the market.

• For example, General Electric released updates to its on-premises analytics software, Proficy CSense, in August 2021. The software uses machine learning and AI technology, as well as digital twins, to diagnose problems and root causes, forecast future performance, and automate procedures.

Moreover, the United States has a well-established ecosystem for digital twin activities and the presence of big aerospace, automotive and transportation, energy and utilities, food and beverage, and chemical companies. These sectors are substituting legacy systems with sophisticated solutions to increase performance effectiveness and decrease overall operational expenses, which is fueling the sales of digital twin technology in the country.

Which Countries are Driving Market Growth in Asia Pacific?

“South Korea & Japan to Contribute Highly to Asia Pacific Market Growth”

Asia Pacific is expected to experience significant growth during the forecast period. Smart city development initiatives throughout the region and increasing consumer product demand are propelling the regional market.

Moreover, the well-established automotive and manufacturing sectors in nations such as South Korea and Japan are contributing to the market growth in Asia Pacific.

Which Country is a Major Player in the European Market?

“Germany to Play Major Role in European Market progress”

The European market is witnessing considerable growth. The increasing demand for modern industrial technologies across Europe is driving the demand for virtual twin technology.

Germany is a major player in the European market. The country's automotive industry is heavily implementing digital twin technology across all processes.

• For example, in July 2021, Robert Bosch and Volkswagen used a virtual twin model to improve the performance of self-driving cars.

Category-wise Insights

Why is Digital Twin Technology Widely Used in the Automotive and Transportation Sectors?

Demand for digital twin technology from automotive and transportation sectors is predicted to increase at a CAGR of 20% during the forecast period. This is mainly due to the extensive use of digital twin technology in the automotive and transportation sectors to develop digital models of connected automobiles.

Furthermore, mass manufacturing, lean adoption, and globalization are important aspects encouraging firms in the automobile sector to implement innovative technologies like digital twins, IoT, AI, and others to satisfy customer demands.

Competitive Landscape

The global market for digital twins is highly competitive. Key players in the digital twin market are implementing a variety of strategies, including strategic agreements & contracts, mergers & acquisitions, and developing, testing, and introducing more effective digital twin solutions. Moreover, several startups are entering the market with innovative offerings.

• Digital Construction Works, a startup based in the United States, provides DCW, a digital twin integration platform for construction firms. The platform converts every job site into a digital twin by utilizing several third-party databases. This, in turn, streamlines construction progress tracking, simplifies downtime management, and accelerates project completion.
• Amazon Web Services and ANSYS established a strategic partnership in February 2022 to revolutionize cloud-based engineering simulations. The collaboration will enable ANSYS products to be installed on AWS, making simulation workloads easier while also delivering flexibility and scalability through easy access to storage solutions and software via any web browser. ANSYS can incorporate AWS' complete framework, which covers items such as storage, computation, digital twin, IoT, machine learning, and analytics.

Key Segments of Digital Twin Industry Research

• By Type :

  • System
  • Product
  • Process

• By End Use :

  • Residential & Commercial
  • Manufacturing
  • Automotive & Transport
  • Energy & Utilities
  • Agriculture
  • Healthcare & Life Sciences
  • Other End Uses

• By Region :

  • North America
  • Latin America
  • Europe
  • APAC
  • MEA