Digital Twin Market to See Tenfold Growth in Next 5 Years

The digital twin market is expected to see tenfold growth in the next five years, from $3.8 billion to $35.8 billion per year, according to market research company Markets & Markets.

That growth will come from more industries adopting digital twins, as a way to reduce building, modifying, and testing costs, while also providing a business with a better understanding of their supply chain.

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Digital twin technology has been around for a while. NASA simulates almost all rocket operations, to find any problems, before manufacturing and launching a physical version. Google’s self-driving division, Waymo, has driven billions of virtual miles, testing the vehicle’s brain on all sorts of edge cases.

That technology is now seen as critical to the future of many sectors, which suffer from hefty research and development costs. By building and modifying in a virtual space, engineers and data scientists can collaborate on ongoing projects without the usual costs.  

A logistics and shipping company attempting to reduce waste or improve shipping times may also use a digital environment, to run trials on faster shipping, more carriers, or improved customer service. From this, they will be able to identify what approach is most beneficial.

While the resource investment is lower, a digital twin cannot be developed in a totally standalone environment. It requires data, pulled from real-world sensors, spreadsheets, and databases, to enable a precise recreation of the physical product or system.

That means businesses need to be savvy about data collection and governance, to ensure that tests and modifications made in the virtual world correspond well to changes made in the physical.  

“Of course, all manufacturers will have their own individual supply chain network challenges and optimization opportunities,” said Lisa Caldwell. “Yet in nearly every case, the creation of a digital twin can have a significant effect on their ability to maximize productivity, make good decisions, and boost resilience in the future.”

The market is still in a nascent stage, with most digital twins built by the company that then uses it. In the next five years, we expect to see more technology companies build digital twin solutions for clients, which has led to industries and countries standardizing the terminology and reference architectures.

To that end, Ansys, Microsoft, and Dell have founded a consortium, which aims to introduce more clarity and frameworks for digital twin technology. Six countries, including the United Kingdom, have also launched national digital twin programs, for similar reasons.