Digital Twin Market Size, Share & Trends Analysis Report By End Use (Manufacturing, Agriculture), By Solution (Component, Process, System), By Region (North America, APAC), And Segment Forecasts, 2022 - 2030

Report Overview

The global digital twin market size was valued at USD 7.48 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of 39.1% from 2022 to 2030. Production halts and supply chain disruptions during the COVID-19 pandemic led to the suspension of several other activities along the value chain of industries, such as aerospace, manufacturing, and automotive. This impacted the market during the first half of the pandemic in 2020. However, as the number of COVID-19 cases started reducing and restrictions were lifted, the market began recovering strongly as several industries started moving toward automation and virtualization of products as well as processes.

While the world is now on the path of recovery, a lot of uncertainty remains surrounding the spread of new COVID-19 variants. As such, several nations are expected to implement digital twin technology as a part of their economic reform activities. Digital twins could help build predictive models and determine the probability of success of physical prototypes before they are rolled out. The pandemic has accelerated the adoption of digital twin technology across various applications in several verticals beyond manufacturing, including real estate, healthcare, telecom, and retail, driving the growth prospects of the market.

The integration of digital twin technology with technologies, such as IoT, Artificial Intelligence (AI), and cloud computing, is further expected to boost the market growth. Organizations are deploying IIoT and AI technologies to collect and analyze behavioral data from existing IoT devices and connected products, which can be later applied to the digital twin model to replicate the existing device’s performance and usage. This helps product engineers and designers observe the product performance and identify any issues as well as predict future iterations of common problems. The deployment of these technologies also aids organizations in enhancing operations and system productivity, thereby improving the overall product performance.

Several organizations are focused on deploying digital twin solutions to optimize their supply chains and operational processes to recover from economic disruptions caused by the pandemic. As such, cloud companies like Microsoft Azure and Google Cloud are focusing on launching various cloud-based digital twin solutions for industry players for easy accessibility and customized solutions. For instance, in January 2022, Google Cloud launched a supply chain digital twin, which is expected to provide manufacturers and distributors with unprecedented visibility of operations occurring in their supply chains. Such innovative solutions and the growing demand for automation in various industries are anticipated to trigger the demand for the digital twin platform over the forecast period.

The increasing deployment of cloud and IoT technologies is also leading to security and data privacy threats and the increased risk of cyberattacks. Cloud-based digital twins require online storage of asset information, subsequently leading to security and privacy concerns. Moreover, the lack of skilled professionals makes it harder for organizations to develop an efficient cybersecurity strategy. As such, several Small&Medium Enterprises(SMEs) are still hesitant to invest heavily in advanced technologies, which is expected to pose a challenge to market growth.

Solutions Insights

The process segment is expected to register the fastest CAGR of 40.0% over the forecast period. This growth can be attributed to the implementation of a digital twin for designing workflows in an organization, supply chain processes, smart city projects, warehouse processes, among other applications. Organizations are focusing on improving coordination across operations to optimize workflow processes and cut down on operational costs. Digital twin technologies help enterprises develop workflow structures, thereby enhancing the collaboration within the company’s departments, suppliers, as well as improving customer engagement.

The system segment accounted for the highest revenue share of the global market in 2021. The market share can be attributed to the high deployment of digital twins for designing and developing prototypes of aerospace engines, assembly lines, communication systems, full-scale automotive models, piping systems in the oil & gas industry, among other applications. System twins are a combination of several assets put together, which help engineers observe the system performance and synchronization of components during operation. The deployment of digital twin technology helps identify any anomalies in system operations and enhance system performance.

End-use Insights

The automotive and transport segment led the market in 2021 and accounted for the largest revenue share of more than 19.00% of the overall revenue. This can be attributed to the adoption of Electric Vehicles (EVs), lean adoption, and the rising usage of simulation technologies. The incorporation of digital twin technology in the automotive sector helps engineers capture operational and behavioral data of the vehicle, thereby facilitating further enhancements in automobile design and optimizing costs. Upcoming trends in the automobile industry, including autonomous and connected vehicles, shared mobility, and electrification, are also expected to increase the adoption of this technology.

The growth in the automobile industry is followed by the telecommunication, residential, and healthcare sectors, which are expected to exhibit healthy growth rates over the forecast period. Digital twin technology supports telecom service providers in designing complex network architectures and upgrading the existing network infrastructures to accommodate new solutions, such as Fiber to the Home (FTTH) and software-defined networking. The adoption of digital twin technologies has increased in the healthcare sector amid the COVID-19 pandemic, helping healthcare professionals study the infected patient’s data for future research in performing treatment simulations. Furthermore, the increasing usage of digital twin solutions in the residential and commercial segment for building 3D models of upcoming smart city projects is expected to fuel market growth.

Regional Insights

Asia Pacific is expected to register the fastest CAGR of more than 43% over the forecast period. The growth of this region can be attributed to the well-established manufacturing and automotive industries in countries, such as China, India, Japan, and South Korea. In addition, smart city development projects across the region and the high demand for consumer products are driving the regional market. Furthermore, the proliferation of connected devices is expected to contribute to the regional market growth over the forecast period. North America held the high market share, followed by Europe, in 2021.

The regions have some of the most advanced infrastructures to support upcoming technologies like digital twins, which is the prime reason for the high adoption of the technology. Furthermore, the early availability and adoption of new technologies have contributed to the growth of the North America regional market over the past years. The promising growth of the biotechnology industry and heavy investments in the R&D of the automotive and manufacturing sectors are expected to drive the market growth in the Europe region.

Key Companies & Market Share Insights

Intense competition among leading players for introducing advanced and innovative products is encouraging companies to invest in the R&D of products and automation of processes. Furthermore, several automotive brands are adopting digital twin technologies to improve customer engagement by using interactive automobile dashboards on websites, where customers can customize vehicles at their convenience. This helps companies in tapping consumer behavior and making changes to existing models.

Companies are adopting strategies to leverage new opportunities in the market and target new customers by developing customized products. For instance, in December 2021, Dassault Systèmes announced a partnership with Renault Group. The partnership was aimed at using Dassault Systemes’ 3DEXPERIENCE platform on the cloud to develop programs for new vehicles and other mobility services. Renault Group would leverage the platform to manage the virtual twins of its product configurations. Some prominent players in the global digital twin market include:

• ABB

• AVEVA Group plc

• Dassault Systemes

• General Electric

• Hexagon AB

• IBM Corporation

• SAP

Digital Twin Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global digital twin market report on the basis of end-use, solution, and region:

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • Manufacturing

  • Agriculture

  • Automotive & Transport

  • Energy & Utilities

  • Healthcare & Life Sciences

  • Residential & Commercial

  • Retail & Consumer Goods

  • Aerospace

  • Telecommunication

  • Others

• Solution Outlook (Revenue, USD Million, 2018 - 2030)

  • Component

  • Process

  • System

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa