Report predicts US$4.6 billion global spend on digital twins

Tuesday, 11 January, 2022

Report predicts US$4.6 billion global spend on digital twins

In its new white paper, ‘70 Technology Trends That Will — and Will Not — Shape 2022’, ABI Research analysts say they have identified 35 trends that will shape the technology market and 35 others that, although attracting huge amounts of speculation and commentary, are less likely to move the needle over the next 12 months.

“The fallout from COVID-19 prevention measures, the process of transitioning from pandemic to endemic disease and global political tensions weigh heavily on the coming year’s fortunes,” said Stuart Carlaw, Chief Research Officer at ABI Research. “This white paper is a tool for our readers to help shape their understanding of the key critical trends that look set to materialise in 2022 as the world begins to emerge from the shadow of COVID-19. It also highlights those much-vaunted trends that are less likely to have meaningful impact in 2022.”

In relation to the manufacturing technology markets, the biggest likelihood will be the rise of digital twin marketplaces, while at the other end of the scale, 5G is unlikely to make inroads into the production line.

Manufacturers need a range of capabilities to deploy digital twins, including computer-aided design (CAD) modelling, connectivity, cloud computing, Industrial Internet of Things (IIoT) software platforms, remote monitoring, hardware for shop floor workers (tablets, AR glasses), physics-based simulation, ML and systems integration. This is because digital twins are not a technology but rather a composition of solutions aimed at bridging the physical and digital worlds, from design through simulation, manufacturing, assembly, and after-sales service and support.

Over the last few years, digital twins have grown from a concept to become mainstream with the help of IIoT dashboards and near-real-time reporting. This level of maturity has been accompanied by new thought constructs, such as the use and implementation of AI at scale; changing requirements like the need for model libraries and standards bodies; and soon the emergence of digital twin marketplaces that enable independent software vendors (ISVs) and other third parties to build relevant tools for the ecosystem. These tools are essential for continued value creation and the wider democratisation and adoption of digital twins. Spending on industrial digital twins will grow from US$4.6 billion in 2022 to US$33.9 billion in 2030 at a 28% compound annual growth rate (CAGR).

In relation to 5G, as of July 2021, there were 84 sites with publicly announced private cellular network (4G/5G) deployments. All are at large companies and facilities, with examples including ABB, Airbus, BASF, Daimler AG, Ford, Haier, Konecranes and Nippon Steel. While important, current deployments are mostly used as campus networks or in a lab or intermediary production development centre for non-industrial production applications. Standards work by 3GPP and 5G-ACIA continues to advance adoption and use of the technology; however, the device ecosystem and implementation/management functions lag.

There is also a question of relevance: two-thirds of manufacturers employ fewer than 20 people. In its current form, working with and trialling 5G in manufacturing favours large companies and factories with the R&D capital to test and learn. These larger companies and locations have started to evaluate the cost and benefits of different deployment scenarios (a key progression); however, 5G will not be relied upon for production-critical applications at scale until 2024.

More trends that will and won’t happen in 2022 can be found in the white paper ‘70 Technology Trends That Will — and Will Not — Shape 2022’.

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