Digital Twin Market Size, Share & Trends Analysis Report By Solution (Component, Process), By Deployment (Cloud, On-premise), By Enterprise Size, By Application, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global digital twin market size was estimated at USD 11.13 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 37.5% from 2023 to 2030. Digital twin technology is gaining traction owing to its potential to bridge the gap between the physical and virtual worlds. The global market is expected to grow significantly over the forecast period in line with the growing adoption of the Internet of Things (IoT) and big data analytics and the growing need to ensure cost-efficient operations, optimized processes, and reduced time to market. Moreover, digital twins would continue to evolve in line with innovations in virtual reality and augmented reality, thereby boosting the market's growth.

Increasing public and private investments in digital transformation solutions are creating robust opportunities for market growth. Countries such as the U.S., India, Australia, Brazil, Saudi Arabia, and South Africa are significantly investing in digital transformation solutions to accelerate digitization. For instance, in November 2022, the Clean Energy Smart Manufacturing Innovation Institute and the U.S. Department of Energy announced a funding of USD 2 million to assist manufacturers in adopting smart manufacturing processes and technologies to save energy and increase productivity, creating a positive outlook for market growth.

Implementation of emerging technologies such as cloud computing, big data, artificial intelligence (AI), IoT, and machine learning (ML) in digital twin solutions is anticipated to boost market growth in the forecast period. Various end-user companies are deploying IoT and AI technologies to collect and interpret data from connected devices, which can be later used in digital twin models to replicate the operation and performance of the existing device. This assists designers & engineers to monitor performance, identify issues, and predict any iterations of common problems. Integration of these emerging technologies also helps companies in enhancing system productivity and operations, thereby driving market growth.

End-user companies focus on deploying digital twin solutions to optimize their operational processes and supply chains to recover financial losses. Growing demand for digital twin solutions is encouraging various market players to improve their product portfolio and geographic expansion to achieve higher profitability from the market. For instance, in June 2023, a software company, Matterport, Inc., partnered with technology solution distributor CompuSoluciones to accelerate the sales of its digital twin solutions in key regions of Latin America, such as Mexico and Columbia. With these partnerships, CompuSoluciones will offer Matterport, Inc.’s 3D cameras and digital twin solutions to various small and medium enterprises (SMEs) in Latin America.

End-user industries such as manufacturing, automotive, aerospace, defense, residential & commercial, and retail & consumer goods companies can obtain greater insights into the features, qualities, specifications, and utilization of the products. Defense organizations are focused on developing their digital & IT infrastructure and the digital twin, which helps them accomplish better communication, thereby driving market growth. For example, in October 2021, the UK’s Ministry of Defense (MoD) announced a contract with UK-based technology company Improbable. As a part of this contract, Improbable will create a next-generation communication network digital twin for MoD. The contract will aid MOD in operating, planning, managing, and optimizing its complex technical infrastructure.

Market Dynamics

Innovation, global competition, and technological advances can be considered the key driving factors responsible for the expansion and growth of the digital twin market. The digital twin has provided businesses with additional means to cut costs and augment profits effectively. Advantages associated with process automation, cloud computing, and social media, among others, encourage businesses to opt for digital twins and further boost the efficiency of their processes.

Digital twin providers are anticipated to leverage the new technological innovations to manage the time-to-market concerns efficiently, increase the existing system’s productivity, and optimize internal processes, product designs, and systems to reduce energy consumption, enhance the production layout, and minimize investments, among others. Over the past few years, the emergence of technologies, such as Robotic Process Automation (RPA), has started to influence the digital twin market. RPA, with its cost-saving abilities, speed, and efficiency, is gradually making inroads into all industries. RPA has also emerged as the fastest-growing trend in digital twin platforms, particularly in the manufacturing sector, to ensure high-value creation, fast time-to-value, and notable cost savings.

In an industrial production site, a significant proportion of the work is based on assembly operations, which demand high production flexibility and are also difficult to automate. The need to handle the fluctuating production quantities and complex product geometries further adds to the complexity of assembly lines and their operations. Ever-increasing adoption of process automation in the digital twin industry drives market growth.

Solution Insights

In terms of solutions, the system segment held the largest revenue share of over 40% in 2022. The high market share can be attributed to the growing usage of digital twin solutions for developing and designing assembly lines, communication systems, and piping systems in oil & gas, automotive models, and aerospace sectors. System twins are an integration of several assets, which allows engineers to observe and interpret the synchronization of components during operation and system performance, supporting segment growth.

The process segment is anticipated to register the fastest CAGR of 39.4% over the forecast period. The growth can be attributed to the increasing usage of digital twins for optimizing & designing workflows in supply chain processes, warehouse processes, smart city projects, and production. Major organizations are significantly emphasizing minimizing operational costs and improving coordination across all operations. Digital twin solutions assist enterprises in developing workflow structures, thereby improving collaboration with suppliers as well as within internal departments.

Deployment Insights

Based on deployment, the on-premise segment held the largest revenue share in 2022. The significant market share can be attributed to the high adoption of on-premise solutions by large enterprises for enhanced security and ease of compliance with government regulations. Furthermore, large enterprises have critical business information, and to protect it these enterprises choose complete ownership of solutions. However, lately, consumer focus is shifting toward cloud-based solutions owing to their easy operation and low operating costs. Therefore, the on-premise segment is expected to witness slow growth during the forecast period.

Cloud segment is expected to register the fastest CAGR of more than 30.0% over the forecast period. Cloud-based platforms offer higher flexibility and cost-effectiveness to businesses by reducing investments in installing physical infrastructure and maintenance costs. Growing popularity of cloud-based solutions is encouraging market players to develop and provide advanced cloud-native digital twin technologies. For instance, in November 2022, Dassault Systèmes transferred its digital twin operation to the cloud with a aim to provide end-to-end independent cloud service that is directly linked to each customer's core business and helps them generate value from data on various levels.

Enterprise Size Insights

Based on enterprise size, the large enterprise segment held the largest revenue share in 2022. The high market share can be attributed to the increasing use of digital twins by large enterprises to reduce the product time to market and enhance product performance. The digital twin offers end-to-end visibility on the product and its operations, which assists these organizations in planning the maintenance of the machinery, supporting the segment growth.

The SME segment is anticipated to register a CAGR of more than 30.0% from 2023 through 2030. There is a growing adoption of digital twin solutions among SMEs to optimize product development costs and easy availability of affordable solutions. Furthermore, with digital twin solutions, SMEs can monitor the device's performance and gain valuable insights to avoid machine failure or damage.

Application Insights

In terms of application, the predictive maintenance segment held the largest revenue share in 2022. With help of digital twin in predictive maintenance, engineers can determine and schedule the maintenance preventing machine failure by enabling scheduled maintenance as per actual need and reduces downtime. Businesses can leverage digital twins in their predictive maintenance to address various performance issues without under or over-investing in critical resources.

The product design and development segment is anticipated to register a CAGR of more than 25.0% from 2023 to 2030. Digital twin solutions are experiencing high demand in product design & development owing to their various benefits such as assisting engineers & designers in visualizing design concepts, reviewing manufacturing operations using computer-aided manufacturing (CAM) software, and simulating design performance.

End-use Insights

In terms of end-use, the automotive and transport segment held the largest revenue share of 20.25% in 2022. The high market share can be attributed to the growing adoption of digital twin in this sector due to its various benefits such as cost optimization, enhanced safety of vehicles, and high productivity. Digital twin technology can assist manufacturers and operators in making better decisions about how to design, operate, and maintain vehicles, as well as improve the supply chain by providing real-time data and insights. Real-time vehicle health monitoring can be performed with the help of digital twin technology, which also aids in anticipating maintenance requirements and planning them accordingly.

The telecommunication segment is anticipated to grow at a CAGR of 42.2% during the forecast period. Digital twin technology is used in monitoring telecom network systems and identifying potential issues before they become problems. This can reduce maintenance costs and minimize downtime. Telecommunications sector uses digital twin technologies to enhance customer experience, boost efficiency, and optimize network design. Engineers, network managers, and service providers can improve their decisions regarding network planning, resource allocation, and service delivery by using digital twin technology, which offers real-time data and insights.

Regional Insights

North America held the largest market share of 35.14% in 2022. The regional growth can be attributed to the emergence of technologies, such as Robotic Process Automation (RPA), Virtual Reality (VR), and the IoT, which has started to influence the digital twin industry. Key companies in the U.S., such as International Business Machines Corporation, Microsoft Corporation, and General Electric, are effectively working on new product development and enhancement of existing products to acquire customers and capture more market shares.

Asia Pacific is anticipated to register the fastest CAGR of 40.4% over the forecast period. The growth of the Asia Pacific region can be attributed to rising digital infrastructure, increasing manufacturing output, and improved technological adoption, among others. Further, utilization of digital twins in smart city initiatives, and supportive government initiatives for digitalization is creating robust opportunities for the market.

Key Companies & Market Share Insights

Major market players include ABB, AVEVA Group plc, Dassault Systemes, General Electric, and Hexagon AB. Intense competition among leading players for introducing advanced and innovative products is encouraging companies to invest in the research and development of products and automation of processes. Furthermore, several automotive brands are adopting digital twin technologies to improve customer engagement using interactive automobile dashboards on websites, where customers can customize vehicles at their convenience. This helps companies in tapping consumer behavior and make 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 January 2023, AVEVA Group plc completed its acquisition by Schneider Electric a company that specializes in energy management and digital automation. Through this acquisition, both firms aim to adopt a holistic approach to transform digital services across various customer operations. Some prominent players in the global digital twin market include:

• ABB

• ANSYS, Inc.

• Autodesk Inc.

• AVEVA Group plc

• Amazon Web Services, Inc.

• Dassault Systèmes

• GE DIGITAL

• General Electric

• Hexagon AB

• IBM Corporation

• Microsoft Corporation

• PTC Inc.

• Rockwell Automation

• SAP SE

• Siemens AG

Digital Twin Market Report Scope

Global Digital Twin Market Report Segmentation

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

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

  • Component

  • Process

  • System

• Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • Cloud

  • On-premise

• Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Large Enterprises

  • Small and Medium Enterprises (SMEs)

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Product Design & Development

  • Predictive Maintenance

  • Business Optimization

  • Others (Inventory Management, Performance Management)

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

  • Manufacturing

  • Agriculture

  • Automotive & Transport

  • Energy & Utilities

  • Healthcare & Life Sciences

  • Residential & Commercial

  • Retail & Consumer Goods

  • Aerospace

  • Telecommunication

  • Others

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

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • India

    • China

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East & Africa (MEA)

    • UAE

    • Saudi Arabia

    • South Africa