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Digital twins: How virtual models are helping companies improve efficiency and cut costs

Estimated reading time: 5 minutes


What’s so great about digital twin tech? Why are 70 percent of C-suite tech execs preparing to invest in it? Let’s find out…

Is it possible to make a virtual copy of an entire city? Shanghai thinks so. The Shanghai Urban Operations and Management Center has built a replica of its city of 26 million inhabitants. The copy models 100,000 urban elements – from garbage disposal and e-bike charging infrastructure to road traffic and apartment design – using data from satellites and drones to construct the living replica.

What’s the point of this ambitious project? Pretty simple, really. It allows planners to test various scenarios and then measure the results – without any impact on the actual city and its inhabitants. If something works well, it can then be rolled out in the physical domain.

The project is, of course, an example of digital twin technology. The concept allows designers, planners and engineers to test everything from engines to, well, the entire planet (see last section below). It is now fairly widespread across multiple verticals. Indeed, Gartner believes the market for digital twin enabling software and services hit $9 billion in 2022.

So clearly the market is taking off. But its roots are actually half a century old. Many observers trace it back to the famous Apollo 13 spaceflight of 1970. This was the ‘Houston, we have a problem” mission in which an explosion critically damaged the main engine. To prepare for the spaceflight NASA built 15 digital simulators. When disaster struck, the NASA engineers were able to adapt and modify the simulations to match conditions on the real-life spacecraft as they evolved. 

Was this truly a digital twin? Maybe, although no one at NASA used the actual phrase. It would take until 2011 for the term to be coined for the first time by Dr Michael Grieves. In a scientific paper he described a conceptual process in which a virtual model would share information in real time with a physical system: the two would mirror each other. 

So that’s a bit of history. Now let’s explore the topic in a little more depth.


What is a digital twin?

The introduction above should have shed some light on the concept and why it is important. But let’s defer to the experts for a concise description. Here is how management consultant McKinsey describes it.

A digital twin is a digital representation of a physical object, person, or process, contextualized in a digital version of its environment. Digital twins can help an organization simulate real situations and their outcomes, ultimately allowing it to make better decisions.

So let’s say the focus of a digital twin is a wind turbine. It will be fitted with sensors that relay data about energy output, temperature, vibrations, weather conditions and so on. On receiving this data, the twin can run simulations, study performance issues and generate potential improvements. Ultimately, these insights can be fed back to the physical turbine to boost its performance.

What is the difference between a simulator and a digital twin?

Simulations and digital twins both use virtual models to replicate a given system’s processes. However, there are two important differences between them.

First there’s scale. Usually a simulation supports testing of just one process, whereas a digital twin – as a complete replica – should emulate all facets of a system. 

There’s the real-time data element. Simulations usually don’t connect to any other system. A digital twin is different. It is designed around a two-way flow of information with the object it is emulating. 

So to sum up, simulations help designers understand what might happen in a real world scenario. Digital Twins help them understand what is happening now, and therefore how to fix problems and improve performance.

What are the benefits of a digital twin?

Today, companies in a variety of verticals have embraced digital twins because they can speed up development times, reduce costs and boost efficiency. Here are five precise benefits as identified by Deloitte.

•    Accelerating product design

Designers can use digital twins to prototype new ideas quickly and inexpensively. They can simulate what-if scenarios involving system interactions, product testing, and customer experience. 

•    Designing more efficient processes

Digital twins can model complex processes that identify inefficiencies and suggest ways to address them. Deloitte gives the example of car maker Maserati, which digitally modelled its production line to improve the positioning of factory robots, improving facility throughput by 3x.

•    Optimizing day-to-day performance

By capturing operational data in real-time, organizations can optimize the performance of products or processes. For example, a hospital might improve patient experience by identifying busy areas, then taking action to reduce congestion.

•    Enabling predictive maintenance

Digital twins can go further than improving performance in the present. They can also mitigate against failures in the future. By modelling scenarios based on real-time feedback, they can anticipate equipment breakdown, and reduce unexpected shutdowns. 

•    Planning for large-scale infrastructure changes

Digital twins are not just applicable to industrial products and processes. They can also help with infrastructure by modeling the behaviour of people or traffic, for example. This can be extremely useful in city planning, wireless rollouts, stadium design and other similar scenarios.

How large is the digital twin market?

According to McKinsey, interest in digital twins is already widespread in industry. It reported in 2022 that 70 percent of C-suite technology executives at large enterprises were exploring and investing in digital twin tech. This is driving a market that could generate $48 billion by 2026.

Meanwhile, Gartner estimates the market for digital twin enabling software and services to reach $150 billion worldwide by 2030, up from $9 billion in 2022. 


Which verticals are using the digital twin concept now?

Digital twins can be used in multiple contexts. And new tools are making it easier than ever to develop these models. For example, Amazon now offers its AWS IoT TwinMaker to help enterprises create virtual representations of any physical environment, and combine existing 3D models with real-world data. According to IBM the most common applications are in the following verticals.

Digital twins are used extensively in auto design, to improve time to market and vehicle performance.

Power generation 
Digital twins are very useful for the maintenance of large engines and power-generation turbines.

Big physical structures, such as large buildings or offshore drilling platforms, can be improved through digital twins, particularly during their design. 

Digital twins are very common in manufacturing. They help with the design of machinery and the layout of facilities.

Sensor-generated data can be used to track a variety of health indicators and generate key insights.

Urban planning 
Civil engineers use digital twins to optimize the built environment, reduce congestion, allocate resources and more.

Three examples of digital twins in action

1.    In Los Angeles, the Sofi sports stadium – home to NFL teams the LA Rams and LA Chargers – has its own digital twin. It models the stadium and the 300-acre Hollywood Park campus around it. The twin collects data in real-time from every area of the park’s operations so that event organizers can improve the customer experience and maintenance. These users engage with the twin using apps that relate to specific features and functions.

2.    Over the last few decades, the earth’s orbit has filled up with more than 7000 man-made satellites and other debris. How is it possible to keep track of their locations, and anticipate the impact of phenomena such as solar flares, space weather, and other disruptions? In 2022, Slingshot Aerospace won a $25-million contract from US Space Force to provide a digital twin of orbital space. The system combs through public and commercial data to build a living picture of the state of low-earth orbit in real-time. The service will help risk modeling for space insurance, and providing data for space-serving companies operating on satellites in orbit.

3.    In summer 2023 a consortium called Software République presented the first view of its H1st vision concept car at the Viva Technology 2023 exhibition. It was one of the most ambitious automobile concepts ever created, yet it took just six months to design and build. The secret of this speed? A digital twin.

The twin modelled how the driver might interact with the car, other vehicles and road infrastructure. It also aided the design of ambitious features such as the ability to unlock the car with posture and facial recognition. 

Individual people? The entire planet? Where can digital twins go next?

If a digital twin can successfully emulate a wind turbine, can it eventually move beyond the industrial context? Plenty of experts think it can. In fact, they are already working on some very ambitious applications.

Tech analyst Gartner believes a key use case for the future will be a digital twin of the customer (DToC). It says a DToC platforms will consolidate a data trail of all aspects of customer interaction – all captured from surveys, sensors and social media. The tools might analyse how individuals interact with brands across multiple channels. 

It sounds a little creepy, so obviously organizations will need to be sensitive in their application of the concept. However, it might be that customers are OK with the idea because they also embrace it. 

Many tech experts believe personal digital twins will be commonplace by the end of the decade – and that this process will be led by healthcare. For example, former GE CEO Bill Ruh predicts that one day, every human will have a digital twin from birth. The twin will use the person’s unique genome to suggest bespoke treatments when they become ill.

High profile initiatives are paving the way for this idea to become reality. The Living Heart Project, for example, is a pioneering project to develop accurate personalized models of the human heart. And companies such as Siemens are already working on practical applications of the concept.

But if digital twins of people are not wild enough for you, how about a digital twin of the entire planet?

That’s the aim of the European Union’s ‘Destination Earth’ initiative, which kicked off in 2021 and is expected to run for up to ten years. The project is building an accurate digital model of the earth to map climate development and extreme events as accurately as possible in space and time. This includes new data on human activities as they affect water, food and energy management.


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