McKinsey Finds Digital Twins Can Boost Public Sector ROI by Up to 30%

• According to a McKinsey report, digital twins can improve capital and operational efficiency of government infrastructure projects by 20-30%.
• Simulation tools are helping leaders optimize major investments before committing irreversible funds.

Global investment in public infrastructure is surging, but governments are facing increasing complexity and risk in planning high-impact projects. According to a report by McKinsey, digital twins can significantly enhance the decision-making process for public-sector leaders by providing detailed modeling of both short-term and long-term impacts.

Digital twins combine data, simulations, and optimization tools, enabling leaders to evaluate different choices, forecast results, and determine where to focus their efforts. In one scenario, McKinsey describes how a state government could use digital models of three transit projects to simulate real-world factors, including population growth, accessibility, energy use, and emissions. By running these simulations over time, leaders could see how each project performs across different future scenarios. This would help them choose the option with the greatest long-term public benefit and return on investment.

McKinsey reports that while rolling out digital twins takes significant effort, the potential gains can be substantial. The firm estimates these tools can improve capital efficiency, service accessibility, and operational performance by 20-30%. When applied to large-scale public spending, McKinsey notes, that level of improvement can drive meaningful financial returns.

🌀 Tom’s Take:

Digital twins are quickly becoming a go-to tool for making tough decisions. They let leaders test different scenarios, see how things might play out, and move forward with real data, not just gut feel. The public sector is one example, but we’re seeing this tech show up everywhere, from supply chains to space. As spatial tools get more accessible, they’re starting to shape how smart investments happen across the board.

Source: McKinsey