Digital Twin Market Expected to Hit $140.93 Billion by 2031

The digital twin market was valued at US $10.305 billion in 2023 and is projected to reach US $140.93 billion by 2031; it is expected to register a CAGR of 38.7% during 2023–2031.

According to a new comprehensive report from The Insight Partners, the global digital twin market is observing significant growth owing to the increasing adoption of IoT devices, large-scale digital transformation, and Industry 4.O adoption across enterprises and surging emphasis on predictive maintenance. Furthermore, the Integration of AI, AR, VR, and other advanced technologies is likely to propel the demand for digital twins in the future.

The report runs an in-depth analysis of market trends, key players, and future opportunities. In general, the digital twin market comprises a vast array of types, enterprise sizes, and end users, which are expected to register strength during the coming years.

Overview of Report Findings

Increasing Adoption of IoT Devices

The Internet of Things (IoT) describes an extensive broad network of interconnected devices along with technologies that enable communication between these devices and the cloud. Recently, there has been a huge surge in the adoption of IoT technologies due to advancements in mobile and wireless connectivity technologies, and a gradual drop in the cost of sensors and other components. Several industries are using IoT to improve efficiency and reduce the costs of their operations.

According to Finance Online, there were approximately 14.76 billion connected IoT devices as of November 2023, and this figure is expected to rise to ~25.44 billion by 2030. As per a forecast by IoT Analytics, 75% of the total devices in use would be IoT by 2030. Furthermore, FinleyUSA estimated the global IoT spending at US$ 1.1 trillion in 2023. The use of digital twins is increasing with the surging adoption of IoT. Digital twins require a continuous flow of data to accurately replicate their physical counterparts. IoT devices can fulfill this requirement with built-in sensors. These sensors facilitate real-time data collection from the environment, human interactions, or objects' functions.

Digital twins rely on IoT sensor data to gather information from the real-world object to project it to create the digital-world object. The insights derived from these data allow organizations to react quickly to improve operational efficiency, customer satisfaction, and production quality, among others. As IoT devices transmit data, digital twins update the data in real time, which ensures that the virtual model is in sync with the physical entity. By leveraging IoT, a digital twin can represent a complex piece of equipment such as a wind turbine and processes such as customer activities in a retail shop. Thus, the increasing adoption of IoT devices drives the digital twin market.

Surging Emphasis on Predictive Maintenance

Predictive maintenance is perceived as the most advanced means to manage maintenance within manufacturing plants. This maintenance approach is enabled by the implementation of technologies such as AI, ML, the Internet of Things (IoT), and Big Data to monitor equipment and check for part failure. Predictive maintenance helps save maintenance costs by selectively detecting the parts that need attention. It also guides organizations to make small repairs in a timely manner, which aids the extended life cycle of equipment and helps reduce downtime.

A targeted maintenance approach enabled by predictive maintenance reduces unnecessary inspections and repairs and facilitates early intervention to prevent serious and complex problems down the line. Due to such benefits, predictive maintenance has increasingly been used in economically critical industries, such as manufacturing and automotive, in recent years. According to the Department of Energy, maintenance teams from different organizations expect an upsurge of 25% in production outcomes after the implementation of a predictive maintenance strategy and software. Thus, a growing focus on predictive maintenance bolsters the digital twin market.

Conclusion

The digital twin technology is revolutionizing various industries, and it has the potential to shape the future of the manufacturing industry. The increasing use of cloud solutions and services, digital transformation measures taken by governments and industrial sectors, and an emphasis on sustainability are a few of the key factors driving the digital twin market growth. The implementation of digital twins helped end users improve their performance, lower operating costs, and provide convenience on a number of levels. Further, the integration of AI, AR, and VR technologies is expected to bring new digital twin market trends in the coming years.

The report from The Insight Partners, therefore, provides several stakeholders—including hardware providers, software providers, service providers, system integrators, and end users —with valuable insights into how to successfully navigate this evolving market landscape and unlock new opportunities.

Source: The Insight Partners