Over the past several years my thinking has changed from believing that water stewardship strategies would be able address water scarcity and quality issues to a mindset that this strategy is no longer enough. This is not to suggest that these strategies don’t create value. Instead, we also need new approaches to address the “wicked problem” of water.
Involvement with several initiatives shaped my thinking.
I have come to appreciate that there are initiatives that can accelerate our progress in solving water challenges. They include, XPRIZE, 101010 and ImagineH2O. These programmes and accelerators made me realise that there are entrepreneurs actively developing not just new water technologies but new business models that, if scaled, will solve water scarcity and quality challenges – creating abundance.
An abundance strategy for water is the thesis for my forthcoming book with David Grant of ABInBev – “Water Stewardship and Business Value: Creating Abundance from Scarcity” (Sarni, W., and Grant, D., Routledge 2018).
There is an opportunity for companies to create greater value & impact beyond the framework of water stewardship
What we present in our forthcoming book is the opportunity for companies to create greater value and impact beyond the framework of water stewardship. We propose that companies can play a more active role in creating water abundance through innovation. Not just technology innovation but also innovation in financing/funding, business models and partnerships. We believe that innovation will take us from 19th- and 20th-century public policy and infrastructure to 21st-century solutions through: exponential technologies (i.e., material science, internet of things, etc.), prize competitions and entrepreneurial programmes (e.g., XPRIZE, ImagineH2O, 101010), innovative business models (e.g., water as a service) and financing (e.g., green bonds and socially-responsible investing) and new stakeholder ecosystems (e.g., Replenish Africa Initiative).
Imagine if companies invested in activities going beyond their value chain footprint (supply chain, operations and product use)? What if companies invested their own funds in water technology, partnered in public infrastructure investments, funded prize competitions targeting technology and public policy innovation? What if they leveraged their global reach and skills in marketing and communications to increase education and awareness of water risks and solutions to address these risks?
An overview is provided below of several innovative competitions, entrepreneurial programmes, technologies, finance strategies and business models to get us to water abundance.
1. Innovation competitions and programmes
Many people are familiar with XPRIZE – XPRIZES are monetary rewards to incentivise three primary goals:
- Attract investment from outside the sector that takes new approaches to difficult problems.
- Create significant results that are real and meaningful. Competitions have measurable goals, and are created to promote adoption of the innovation.
- Cross national and disciplinary boundaries to encourage teams around the world to invest the intellectual and financial capital required to solve difficult challenges.”
I had the privilege in 2016 of working on an XPRIZE for water with an exceptional team with the goal of crafting an XPRIZE for Water. Our vision – universal access to safe drinking water, always – was presented in late September at the XPRIZE Visioneers Summit, sponsored by the Roddenberry Foundation.
Bringing in outsiders to develop businesses to tackle water has enormous promise
Another unique organisation founded to drive innovative solutions to “wicked problems” is 101010. 101010 was founded by Tom Higley, a Denver, Colorado based entrepreneur. His programme brings together 10 entrepreneurs, for 10 days to address 10 “wicked problems.” The programme links successful entrepreneurs with challenging (wicked) problems such as healthcare and cities, with the intent of solving them. In October 2017, they ran 101010 Cities – Infrastructure and Water. Based upon my involvement with 101010, the process of bringing in outsiders to develop businesses to tackle wicked problems, such as water, has enormous promise.
Innovation in water technology innovation has been a long-standing trend. There have been ebbs and flows in interest and investment in the “water tech” sector over the years. Angel investors, VC’s and private equity funds are chasing innovative water tech companies around the world.
The trends in technology innovation include the following categories:
- Digital Water
- Inexpensive sensors
- Internet of Things (IoT)
- Big data
- Artificial intelligence
- Water trading platforms
- One Water/Circular Economy
- Decentralized/Off Grid
- Air moisture capture
- Point of Use/Point of Extraction
- Exponential technologies
- Material science such as nano-technology and biomimicry
There is a significant trend in innovation & adoption of digital water technology solutions
In particular, there is a significant trend in innovation and adoption of digital water technology solutions. Platforms, hubs and accelerators focused on digital applications are being established. From GE’s focus on the Industrial Internet and water data technology hubs such as WetDATA based in Denver, Colorado. Prize competitions are also focusing on digital technology startups – ImagineH2O’s 2016 prize competition supported the launch of several digital solutions in infrastructure, agriculture and water quality monitoring.
3. Financial and funding models
Would companies make investments in water sector technology and infrastructure? Research by Alex Money, PhD, Oxford University, UK, indicates that there is an emerging interest in investment by multinationals for these investments.
The private sector can leverage its large pools of capital for public sector investment…
…part of this model includes green bonds
The private sector can leverage its large pools of capital for public sector investment. His research is based on interviews with CEO’s at food and beverage multinational companies; with Chief Investment Officers at fund management firms in the UK, USA, South Africa and Australia; with senior bankers including the CFO of the World Bank; government representatives including UK Treasury; insurance company representatives; non-governmental bodies; corporate sustainability specialists; and various academics.
Part of this model includes green bonds. Growth in green bonds is increasing, in part, due to the work for the UK-based Climate Bonds Initiative, which is “an international, investor-focused not-for-profit. It’s the only organisation in the world focusing on mobilising the USD100 trillion bond market for climate change solutions.” It established a water infrastructure working group to develop criteria for water investments that can be used to back green and climate bonds certified under the Climate Bond Standard. The group is charged with developing criteria for water-related investments in the areas of “clean water projects, water treatment infrastructure, agricultural usage, storm and flood drainage and protection.”
4. Business models
There are signs that innovative business models are also finding their way into the water sector. A couple of examples are provided below:
There are signs that innovative business models are also finding their way into the water sector
Banyan Water was founded in 2011 and “provides smart water management as a service for commercial and institutional businesses using real-time technologies and related services to save money and enhance properties. Banyan Water believes that better water management is not just a key source of profit for clients, but a requirement in meeting the needs of our growing population. The company helps businesses find and maintain water savings opportunities throughout their portfolios.”
Another company is FATHOM which is a SaaS, “cloud-based data integration platform that is changing the water utility paradigm.” Its geospatial platform goes beyond the meter to encompass the needs of water utilities – a “smart gird for water,” with three “rapidly deployable modules: FATHOM MDM, FATHOM U2You and FATHOM CIS.” According to FATHOM, the company delivers “benefits of technology while eliminating the risk so often associated with IT‐driven projects. Through FATHOM, utilities can build sustainable, data‐driven, customer‐centric enterprises while managing the realities of water volatility and the increasing expectations of customers.”
What does “business unusual” mean?
We can no longer afford business as usual and need to embrace business as “unusual.” For me this means the following:
- Shifting our thinking from water scarcity to abundance to attract new ideas and stakeholders to solve complex (wicked) water challenges.
- Scaling innovation and entrepreneurial programmes such as 101010 and prize competitions such as those of XPRIZE and ImagineH2O.
- Developing and implementing new financing models such as blended finance.
- Leverage the speed and scale of entrepreneurs and multinationals to invest in water solutions in addition to their water stewardship programmes.
- Proactively engage with successful entrepreneurs and businesses from outside the water sector.
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