It isn’t always easy to balance economic and industrial policy with environmental policy. On the one hand, governments are keen to attract inward investment and encourage domestic manufacturing growth.
On the other hand, they need to ensure they are able to meet their obligations under the Paris Agreement. Finding the right balance can be a challenge, particularly for emerging markets.
But technology is making that balance much easier to achieve. Take digital twins, for example. Broadly speaking, any digital representation of a physical process, activity, asset, or system can be a “digital twin.”
A digital twin could be a straightforward visualization technique — like a graph or a chart. Or it could be a highly immersive visualization environment, or HIVE, where operators can view, monitor, and remotely control an asset or process.
Digital twins can deliver significant advantages to manufacturers across a multitude of activities and functions. We are seeing them being employed to support a variety of decarbonization outcomes — everything from enhancing resource efficiency to monitoring carbon emissions and assessing the impact of new government regulations — such as the European Union’s Carbon Border Adjustment Mechanism.
There are many use cases that can deliver on multiple objectives at once.
Consider the use of digital twins in the manufacturing maintenance process, for example. Digital twins enable the deployment of Industry 4.0, involving the use of sensors and the Internet of Things technologies — where physical objects are enabled to share operational data in real time. This enables maintenance leaders to predict potential issues before they happen. That means lower operating costs, more efficient use of resources, less downtime, and fewer service calls.
Digital twins can also be used in a variety of ways to drive important outcomes. When planning and executing a decarbonization plan for a system or an asset, for example, digital twins could be used to support:
• Visualization: Identifying carbon intensity and footprint of various processes and activities for reporting and planning.
• Monitoring: Assessing and reporting the impact of decarbonization measures and investments.
• Simulation: Analyzing different scenarios to identify and execute further decarbonization initiatives.
They could be used in the design phase of a development to review various plans to optimize for sustainability, carbon footprint, usability, and profitability.
They could be used by operators to reduce the number of site visits — particularly to remote, risky or hard-to-reach places — thereby eliminating some travel footprint and enhancing employee safety. The opportunities for digital twins to help decarbonize the manufacturing sector are considerable and growing.
For emerging markets, the widespread adoption of digital twins could drive significant benefits in terms of increased productivity and embedding resilient, low-carbon solutions in manufacturing.
Digital twins enable markets to narrow technical capability gaps and allow the prototyping of new manufacturing solutions before making investments into assets, equipment, and personnel.
The savings include more efficient use of materials, improved maintenance, greater energy efficiency, and improved life-cycle management of assets. Digital twins can also make assets and operations more resilient in the face of market uncertainty, providing operational flexibility and encouraging system digitization and integration.
Perhaps most importantly, digital twin adoption will allow emerging markets to remain integrated within global value chains. The reality is that global organizations are using digital twins to monitor and manage their supply chains and optimize their carbon footprints. They increasingly expect their partners to be able to link into their “systems of systems” with reliable and relevant data. Those unable to meet their expectations may find themselves shut out of the global marketplace with long-term implications.
While there are a number of key challenges facing emerging market adoption of digital twins in manufacturing, they are not insurmountable.
One big challenge is that digital twin technologies and skills are not always readily available in the market. In the past few years, however, digital twin technologies have become much more user-friendly, and capabilities have become more widely available. It no longer requires a team of software engineers and techies to build and maintain digital twins.
Investment has also traditionally been a big challenge. Yet costs for many of the technologies are falling rapidly. Foreign manufacturers and investors seem increasingly willing to invest in digital twin technologies. Meanwhile, donors and multilaterals are channeling funds into digital twins at an asset and system level, recognizing their catalyzing effects across various policy objectives.
In some markets, the rules and regulations around digital technologies and use cases could be adapted to help create certainty for owners and investors.
Digital privacy laws are key to clarifying how data can be used and shared. Laws requiring the use of digital twins in critical infrastructure can help encourage wider adoption. Self-regulation by industry can ensure a high standard of quality and reliability.
Not surprisingly, a growing number of emerging markets are exploring opportunities to encourage the adoption of digital twin technologies in their manufacturing sectors. Our experience suggests there are some prerequisites that must be in place before digital twin technologies can really start to deliver value.
In some markets, rules and regulations may need to be developed or updated to enable data to be shared between parties and across systems.
Some markets may want to go a step further by mandating the use of certain digital twin capabilities in specific sectors or by opening up their own data for use in private-sector digital twin systems.
Data sharing is a key element and enabler for deploying digital twin technology rapidly and at scale. Governments can play an important role in encouraging it.
Governments could also be helping create trust in the system by supporting a level of certification for digital twins — as a way of validating that technologies can deliver what they promise. New systems and tools for monitoring data usage and automated decision making could help ensure transparency and enhance trust in the value chain. Systems and controls to protect privacy and the use of personal data will need to be addressed upfront.
Last but not least, governments could be working with manufacturers, technology providers, systems integrators, developers, investors, and multilateral development banks to create a supportive ecosystem for digital twin technology and experimentation.
As emerging market governments seek to balance their economic and industrial policies against their environmental policies, new technologies such as digital twins hold significant promise. However, leaving it to market forces alone is not enough.
If governments truly plan to meet their net-zero targets, they must take a more active role in driving digital twins in the manufacturing sector — seeking donor support where market failures are present and working with private actors to encourage the scaling up of green solutions faster where possible.
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