The digital twin market is estimated to grow from USD 3.8 billion in 2019 to USD 35.8 billion by 2025, at a CAGR of 45.4%. Factors driving the demand for digital twin include the growing adoption of emerging technologies such as IoT and cloud for the implementation of digital twin and promising prospect of digital twin in industries such as healthcare, aerospace & defense, and automotive & transportation.

A digital twin is a digital replica of an asset, component, product, process, or a complete system/unit. Digital twins provide visibility with regard to the functioning of a remotely located component, process, or system. It is used along the entire value chain of an asset/product manufacturing process.

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Market Dynamics

Driver: Declining time and cost of product development and unplanned downtime with adoption of digital twin

Elimination of unplanned downtime and reduction of maintenance cost are the major factors considered by companies of various industries to improve productivity and efficiency. According to the Vanson Bourne study conducted in 2017, about 82% of companies have experienced at least one unplanned downtime outage in a span of 3 years. Moreover, as per the independent research (conducted in 2017) of Aberdeen University, unplanned downtime costs about USD 250,000/h to the companies. Such downtimes in companies affect production process, productivity, efficiency, and customer service.

Reduction in downtime can be achieved with the implementation of a digital twin. The deployment of a digital twin helps companies gather data and use it for driving specific business outcomes. The data fetched is analyzed with respect to various parameters, and both preventive and predictive measures are proactively taken up to avoid any harm to a product, process, and system, which would, in turn, help reduce downtime and consequently increase the overall efficiency.

The impact of downtime in automotive can lead to huge financial loses. For instance, in CNH Industrial (a company involved in designing and manufacturing a wide range of agricultural, industrial, and commercial vehicles and powertrains), a minute of downtime can cost more than USD 160,000. Thus, the deployment of digital twin by identifying the most critical areas helped CNH Industrial reduce downtime.

Furthermore, in aerospace, unscheduled maintenance events for aircraft cause stress and inconvenience to passengers. According to the Future of Work report published by GE (US), such events are estimated to cost USD 8 billion to the global airline industry. The adoption of digital twin helps predict the downtime, which can mitigate airline costs and the inconvenience caused by travel delays in the aerospace industry.

By implementing digital twins, engineers can optimize product performance by modifying the physical prototype, in which changes are made as per the requirement during the design phase. Therefore, creating a digital prototype with a digital twin to run simulations help in analyzing the process and taking corrective measures at any instance in lesser time and minimal costs. Thus, the deployment of digital twins has the potential to save production cost and time.

Restraint: Risks associated with data security due to the use of IoT and cloud platforms

There is increasing use of digital technologies, such as the cloud, Big Data, IoT, IIoT, and artificial intelligence, in various facets of business. Digital twin involves the integration of various IoT sensors and digital technologies for virtualizing a physical twin. Growing connectivity trend leads to a greater challenge on the level of security, compliance, and data protection, as well as regulations.

Increasing occurrences of viruses and cyberattacks lead to security concerns. Important information can be under threat by malicious viruses, causing a major loss to industries. The failure of IoT infrastructure providers and cloud platform providers to implement proper security measures may lead to the disruption of an entire flow of information. Industries adopting digital twins with such platforms are prone to malware that is targeted at industrial systems due to increasing dependence on web-based data interchange and off-the-shelf IT solutions.

Opportunity: Promising growth of digital twin technology in industries such as healthcare, aerospace, and automotive

Technological innovations are contributing to the growth of various industries. Digital twins have advantages in terms of technology, data and analytics, and innovation, which help these industries to grow. Currently, many companies have been transforming data collection and analytics, organization, and IT infrastructure to increase their performance agility. Principle and framework of a digital twin contribute to creating digital projects for organizations. A digital twin can drive other digital initiatives taken by organizations.

Many IoT vendors are collaborating with digital technology providers for efficient development of products and solutions across sectors such as automotive, healthcare, and aerospace.

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Challenge: Lack of awareness regarding cost benefits of digital twin adoption

Several companies are unaware of the advantages of adopting digital twins in their production processes. As it is a new technology, the companies are unclear about the economic benefits, investments involved, and cost benefits. Determining the potential of a digital twin is considered to be complex and diverse, which further complicates the adoption of this technology.

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