Amid tariffs, international tensions and economic pressures across Europe, 2025 is shaping up to be an unpredictable year for industrial organizations - and one where adversarial trends will dominate. The combined effect of these forces is already being felt in the form of higher operating costs, supply chain delays and increased difficulty in long-term planning.

This article will explore the key forces shaping the future of European industry and why organizations must act now to remain competitive. We discuss three critical imperatives every industrial organization must address in 2025 and beyond. Learn actionable strategies to navigate this era of uncertainty. 

The Triple Imperative: Productivity, Compliance, and Resilience

• Industrial facilities across Europe already face a triple long-term challenge: The productivity imperative: High labor costs, stagnating productivity and adverse demographic trends have made it essential to reassess which processes can be automated, outsourced or streamlined to maximize efficiency. For sectors such as manufacturing, utilities or energy — where 20% employees may retire within the next decade — labor-intensive processes are becoming a significant liability. It is paramount to find ways to rapidly equip junior employees with the operational knowledge of an industry veteran, because this ensures that critical expertise, best practices and safety standards are preserved and efficiently transferred. This prevents costly disruptions, errors and knowledge gaps as experienced staff retire or move on.
• The compliance imperative: Whether enforced by investors or regulators, ESG criteria introduce new compliance and reporting requirements. Frameworks such as Fit for 55 in the EU impose strict emissions reduction trajectories, while safety regulations and penalties will continue to increase, requiring organizations to integrate compliance into every aspect of their operations.
• The resilience imperative: The COVID-19 pandemic, the recent energy crisis and growing geopolitical instability have pushed companies to explore de-risking strategies. Facilities must be designed (or adapted) to guarantee rapid operational readiness, efficiency by design and adaptability to external shocks - including cyberattacks, unforeseen downtime or extreme weather events. 

Addressing these challenges effectively is crucial to the financial baseline of industrial organizations. So, how can organizations secure this? 

Why Digital Twins Have Become the Backbone of Industrial Operations

To address this triple imperative, digital twins have emerged as a pivotal technology to build more productive, compliant and resilient facilities.

At its core, a digital twin provides rapid access to information and enables users to better plan and execute field work, from the early installation and construction stages, all the way to operations and maintenance. The positive effects of using a digital twin span from preventing incidents and reducing on-site visits to optimizing production processes and avoiding unplanned asset downtime. 

In a survey by Hexagon of 660 C-suite executives and senior leaders across 11 industries, it was found that a whopping 96% saw benefits in digital twins, with 62% stating that they find immense value in such technology. Digital twins are on the agenda of 72% of executives, who plan to increase their investments in this area over the next twelve months.

The reason for such popularity is simple: digital twins are having a sizable impact on organizations’ financial health, contributing to 19% of companies’ cost savings and revenue growth.

Identifying Three Prerequisites to Realize Value  

The report also underlines three key obstacles to overcome to realize value from digital twins: poor data quality, lack of interoperability and cybersecurity concerns. The ability of a digital twin solution to address such challenges will determine the success of a digitalization initiative. So what are these key prerequisites, and how can Hexagon help companies grapple with these?

Data quality is the most cited challenge among executives. A digital twin should be able to automatically validate data being uploaded in the system, detect inconsistencies and values outside of expected ranges. Hexagon’s HxGN SDx2, a cloud-native SaaS solution that bridges physical and digital worlds, allows for the definition of business rules that help you identify invalid data before it’s published on the production environment. It also offers out-of-the-box reports summarizing potential inconsistencies among values coming from different disciplines. Finally, data handover between EPCs and Owner Operators occurs within the platform itself, making the process transparent and seamless.

Interoperability and data integration is the second most frequently reported challenge. 
The value of a digital twin rests on its ability to consolidate critical information, no matter the variety of data sources and formats. Digitization initiatives often result in data silos that fail to democratize access to information and lead to sub-optimal decision-making. 

Today, data integration is an area where artificial intelligence can play a critical role. Hexagon’s SDx2 leverages Large Language Models (LLMs) to automate tag and metadata extraction from uploaded documents, thus minimizing labor-intensive and error-prone manual tasks. 
By identifying and indexing tags and properties, Hexagon SDx2 creates a searchable knowledge base, a unified digital thread accompanying customers along the whole asset lifecycle.

The solution also offers native connectors for industry-standard maintenance systems, such as Hexagon EAM, SAP^® Plant Management and IBM Maximo^®, as well as connectors for process historians (AVEVA™ PI System ™ and Aspen InfoPlus.21^® (IP.21)). These connectors enable customers to reduce time to value and lower project risks due to integrations.

Additional third-party systems can be integrated by means of flexible RESTful APIs, making SDx2 truly data agnostic. This approach ensures our customers can continue to leverage their existing investments, while developing a full perspective on their assets.

Data integration is available for both on-premises and SaaS environments, allowing for a hybrid architecture approach that caters to customers with legacy systems. By centralizing and consolidating information on SDx2, customers can create meaningful relationships between objects (such as documents, engineering tags, change requests, work orders, production units and more), making the navigation experience seamless and intuitive also for occasional users.  

Cybersecurity ranks third in the list of executives’ concerns. Industrial digital twins enable remote monitoring of critical processes, making it imperative to select a partner with strong credentials in industrial cybersecurity. Hexagon offers full compliance with international and national standards such as ISO 9001, ISO 27001, ISO 27017, CSA Star 1 &2, SOC2 and more. 

Hexagon SDx2 has been built from the ground up with a strong focus on data confidentiality and integrity, providing a solid foundation for information management in asset-heavy industries.

In summary, 2025 presents European industrial organizations with significant challenges, from rising costs and supply chain delays to the urgent need for greater productivity, compliance, and resilience. Digital twins have emerged as a transformative solution, optimizing operations and ensuring regulatory adherence amid disruptions. By building strong digital foundations today, organizations will be better positioned to thrive in uncertainty and change. 

If you’d like to know more about how Hexagon can accompany you in your digital transformation, please visit https://hexagon.com/products/hxgn-sdx2