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The year ahead for water: Creative destruction

From the “Uberization” of the water sector to radical decentralization to a new partnership model, these themes will ripple across the industry in 2023.

Drainage ditch

Image via Shutterstock/Sandris Veveris

This year, we will see the water industry’s status quo disrupted in response to the convergence of several trends and factors — the impacts of climate change, outdated public policies, and aging and underinvested infrastructure.

As discussed in my last GreenBiz column, "Water bites back in 2022," these trends will combine with the forces of creative destruction, relentless innovation from entrepreneurs fueled by increased investment in the water sector.

What we are currently seeing is:

  1. The public sector slowly (and not uniformly) is realizing that policies and regulations enacted decades (if not a century ago) are no longer relevant, and any incremental adjustments are grossly inadequate to address the realities of climate change.
  2. The "installed base" of centralized utilities, the private sector and conventional technology and service providers are working to figure out how to innovate faster.
  3. Disruptive technologies, businesses and collaboration models (collective action) are taking hold to transform the public and private sector relationship with water resources.

These trends inform my predictions for 2023.

  1. The "Uberization" of the water sector. This view is a bit modified from observations from Dragan Savic FREng, CEO of KWR Water Research Institute, a friend and colleague in the world of water. FREng brought up the impact of Uber on mobility and, in turn, public policy (the taxi industry) and how that might translate to the water sector. I believe the "Uberization" opportunity in the water sector lies in the democratization of water data and solutions. This means that delivering data, actionable information and solutions directly to the consumer and customer will be a game changer. Uber directly delivered mobility. Digital water technologies will directly deliver water use and quality data and solutions. What this looks like is access to real-time water data in the home via technologies such as Flume Water, Spout and Hydraloop to deliver "smart water home" technologies — a move to extreme decentralization as part of the growth of smart homes (smart energy and water).
     
  2. The water sector strikes out on its own. The 2023 U.N. Water Conference, March 22-24 in New York, is seen as the most important water event in a generation and will examine water-linked issues from various perspectives. The last U.N. conference on water was in 1977 in Mar del Plata, Argentina. This 2023 event may be a bit of a breakout event for the water sector. I believe the excitement water professionals felt at being included in the Climate COPs over the past few years will start to fade due to how the past Climate COPs have failed to deliver real progress. It is time for the water sector to lead in delivering quantifiable progress in achieving Sustainable Development Goal 6: Clean water and sanitation. The sector will realize that pinning hopes on linking water issues to climate process by the public sector is not a productive path forward.
     
  3. Collective action is redefined. Collective action has been a key aspect of corporate water stewardship strategies for addressing water challenges such as scarcity, poor quality and impacts on ecosystems. These collective action strategies were built primarily between corporations and non-governmental organizations (NGOs). However, there is a significant shift in the stakeholder groups mobilizing to solve "wicked problems" such as water. This shift is being led primarily led by the private sector.

    That change from collective action to "aligned action" with catalytic communities has been a long time in the making. We are seeing the private sector working directly with entrepreneurs, investors and other multinationals on identifying and supporting innovative technology solutions to more proactively address "wicked water problems." Expect to see this trend to gain momentum this year and to be highlighted at key water events, including U.N.-Water Week.
     
  4. Transformation, not technology innovation. I attended the International Water Association Digital Water Summit in November, and a key takeaway is that the water sector is coming to realize that the successful adoption of digital technologies requires business transformation (public and private sectors). To date, digital water technology adoption remains ad hoc. For these technologies to scale, a business model and strategy of transformation are imperative. 2023 will see this realization take root with increased investment in transformation strategy as the means to accelerate digital technology adoption.

Let me know what you think about these predictions via LinkedIn, GreenBiz or an email.

Prepare to be disrupted this year.

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