The answer is relatively simple. Whereas original data is collected in all your interactions with real persons (e.g. clients, patients, employees etc.) and via all your internal processes, synthetic data is generated by a computer algorithm. This computer algorithm generates completely new and artificial datapoints.
Solve data privacy challenges
Synthetically generated data consists of completely new and artificial datapoints with no one-to-one relations to the original data. Hence, none of the synthetic datapoints can be traced back or reverse engineered to original data. As a result, synthetic data is exempt from privacy regulations, such as the GDPR and serves as solution to solve and overcome data-privacy challenges.
Augment and simulate
The generative aspect of synthetic data generation allows to augment and simulate completely new data. This functions as solution when you have not enough data (data scarcity), would like to up-sample edge-cases or when you do not have data yet.