Innovation in the Water Sector

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Project Efficiency & Industry Growth Is Contingent On More Than Just Innovation in Technology

By Chris Peacock

Innovation in the water sector has been largely misunderstood and understated.

With other types of technology unicorns coming out of the west coast and our attraction to sexy solutions, the water sector continues cry out for better, innovative technologies. The reality is, however, this sector is not in need of highly disruptive technologies born from an innovator’s garage. There are many innovative technologies already available to solve most of the challenges this sector faces today (a few of which are showcased in the projects highlighted on the following pages).

What the sector needs are new ways to categorize, test, approve, implement and ultimately acquire these technologies. The sector needs technology companies that can deliver their innovative solutions in the existing matrix of antiquated policies and risk-averse decision makers. What the sector is really calling out for when we speak of innovation is a desire for technology companies to meet water utilities where they are at today with consumable solutions that help the sector advance in this era of change.

Everyone in this sector realizes there are numerous challenges. It is easy to simply say there is not enough innovation in this sector. I would argue, however, that there is substantial technological innovation in our sector. What is lacking is complementary innovation in business models that support the adoption of these technologies.

Innovation and Technology

Technology in the water sector has continued to advance significantly over the past few decades. With infrastructure lifespans that exceed 20 years in most cases, the challenge for utilities is finding he window to adopt new technologies when they do become available. Meaning the business case for such adoption must be powerful. Otherwise, the existing system will remain the status quo until the end of its useful life.

The sector is certainly not lacking technologies. When we look at the number of water clusters across North America — 15 as represented by the EPA Water Cluster Map — we can quickly identify the power of water technology companies as regional economic engines. The interest in water technology commercialization is also highly visible. Through the work of WaterTAP Ontario, Isle Utilities’ TAG groups, the BlueTech Tracker, Imagine H2O’s yearly competition and WEF’s LIFT program, among others, there are an abundance of organizations helping water technology companies gain visibility in this sector.

So why then do we continue to call for more innovation in the sector?

The reason is simple. We have been looking in the wrong place for innovation to occur. Innovation in technology has been occurring on a regular basis. Innovation around business models has not.

Innovation and Business

The reason new technology adoption rates are low is primarily due to a chain reaction caused by the simple fact that water is heavy. Unlike our power cousins, whose commodity moves at the speed of light across a nationally integrated distribution network, water takes massive amounts of energy and infrastructure to move from one point to another. As such, water is traditionally seen as a highly localized business. With more than 50,000 community water systems in the United States alone, it does not take much imagination to see how local the business water has become.

The localization of water has led to a highly fragmented water sector. Combined with the risk adverse nature of decision makers who are responsible for delivering safe supplies of water — or treating water to high standards before reuse or disposal — this fragmentation has led to major diseconomies of scale. In turn, these diseconomies leave little room for adopting innovative solutions.

Innovation in the water sector must begin at the business model level. The historic model of delivering safe, clean and abundant supplies of water (essentially for free) is over. There is a large outcry for people to begin valuing water more so than we have in the past. The real issue is that we have historically engineered supply side solutions that have relieved the pressure of demand through massive storage, conveyance and treatment systems. Most of which has been done with little public involvement and through massive subsidies. The result is that our society places little “value” on water.

These large scale projects are indeed invaluable to the social landscape and growth of some of our most major cities. Supply side innovations, however, will not combat the current challenges we are facing. In fact, an over reliance on these types of solutions may only worsen the situation we currently face. Only with refocused efforts on innovating around the business of water as a service may we indeed find true solutions to our real business problems.

Water as a Service

Business as usual in the water sector is rapidly changing. Extreme weather events are having significant impacts on the stability of our water supplies. Cost pressures are forcing Utilities to reexamine their pricing strategies. Outdated policies are being called into question. Our infrastructure, as we all know too well, is crumbling. Further, too few utilities and communities have access to the critical tools necessary to effectively manage their operations. The business of water is changing — as it should.

As an industry, it is time we look at Water as a Service and seek innovative tools that support new models. There are significant opportunities for true innovation in the water sector. These innovations are already occurring in the areas of Information Management, Water Reuse, Revenue Assurance and Point of Use Treatment Solutions among others. What each of these current innovative tools have in common is an approach that allows the sector to 1) adopt the technology today, 2) move into the future as a step change function due to the technology and 3) acquire the technology under a service based model or with results that generate additional revenue or reduced operational expenses.

Innovating the Future of Water

How can we move to a future of true innovation in the water sector, where utilities and organizations alike are able to leverage the powerful tools that are readily available? As the founder of The Water Innovation Project, I have made it a mission to transform the way we value water through innovation and collaboration. I truly believe, and have seen firsthand, that innovation in this sector is dependent upon partnerships and collaborative efforts.

The future of water requires partnerships, engagement and cohesive education. To change the business models around water, we must engage with each other in new ways. This is one reason we have developed a number of projects that involve multiple stakeholders in a variety of projects. Whether we are collaborating to publish a book such as “Damned If We Don’t! Ideas for accelerating change around water,” (www.waterinnovationproject.com/press) with 29 thought leaders in the sector or hosting the 2015 Water/Energy Nexus Hackathon with corporate and government supporters, we are delivering new models to the sector to better understand ways in which we may best build resiliency into our industry and engage with each other.

At FATHOM, we are helping utilities eliminate the problems of adopting innovative technology. Our software-as-a-service (SaaS) architecture allows any water system with an internet connection to access highly functioning tools to improve operations and sustainability. Additionally, the FATHOM Store has been developed specifically for the purpose of accelerating innovation. By consolidating, normalizing and canonicalizing the data for utilities, FATHOM provides significant benefits for the industry. Under this model, delivery of services to end-users is a matter of accessing the FATHOM Store Data APIs and allowing utilities the opportunity to acquire it on a subscription basis.

Pathway to Innovation

Innovating the future of water is not overly complex if we begin to reconsider the business models under which we operate. There are a number of technology companies that are already operating under a new paradigm and succeeding in the water sector. There are a number of utilities that have also found new ways to operate, price their services and engage with end users to change demand. Collectively, we must reexamine the business of water and as a result the innovative technologies will follow.

If you are ever in doubt of the innovations taking place in our sector, look to one of the many organizations with a focus on water technology commercialization. You will not find a lack of amazing companies or people ready to deliver new solutions. In fact, you may indeed become overwhelmed at the number of technologies available today. Unfortunately, you will likely find a lack of business models that support your ability to test or acquire these new technologies.

This is where the real innovation will occur — in our ability to transfer technologies to the customers who actually need them.

Chris Peacock is the founder of The Water Innovation Project, an idea lab and leadership hub with a mission to transform the way we value water through innovation and collaboration. His most recent projects include the formation of H2.O, a platform for the water utility industry to collaborate and share knowledge around data, a Water/Energy Nexus Hackathon and the recently-published, award winning anthology, “Damned If We Don’t! Ideas for accelerating change around water.” Peacock is also the director of strategic accounts for FATHOM.

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