Water Shortages: Opportunities for Entrepreneurs (Part 1)

By Guest Author Dominique Trempont

While people focus on carbon footprints and potential ways to reduce the impact man-made CO2 emissions, the world is running out of another of its key elements: fresh water.

We use fresh water much faster than it can replenish: it is increasingly scarce and has no alternative.

Water is a strategic resource for countries and governments. According to United Nations, drinkable water only serves 4 and, by 2050, 6 billion people on earth, up from less than 2+ billion a decade ago, and is still not safe or readily available for an additional 2 billion people.

Providing enough fresh water for the world to function is not a “nice to have”. It is a “must have”. We cannot survive without water: 60-65% of our body and 77% of our brain is water. Water is also essential to creating food (agriculture) and economic development. Whoever controls water controls food, social and economic well-being. This may be the most important priority for this planet.

And, yet, water is widely considered as limitless and is taken for granted. This perception is about to radically change given the water shortages we are facing.

A sense of urgency is starting to build. Last week, California Governor Arnold Schwarzenegger declared a state of water emergency and announced water rationing in the state. Regions like Florida, upstate New York, the Midwest and the South are under the same pressure. Over the next 10 years, 36 out of the 50 states in the US forecast severe water shortages.

Let’s put this in perspective: since the 1900s, the world’s population has doubled every 40 years and fresh water demand has doubled every 20 years, while the supply of safe drinkable water has dwindled. The World Bank predicts that by 2025, demand will exceed supply by 50%, possibly more if one factors in increasing pollution, contamination and decaying water infrastructure.

Even though the water market tends to be on a national scale and has been largely regulated, there is a tremendous opportunity to innovate in this $32 billion worldwide water infrastructure industry to expand the $400 billion global water needs of the world.

I have been interested in the water space for about three years now. I classify innovation opportunities in five categories to track who is doing what and getting funded, and I am looking for feedback from the industry and entrepreneurs.

1. Collect storm water and rainfall more comprehensively

Economically recovering storm water and rainfall is a simple way to increase water supply by as much as 5-7% worldwide. This is a low-hanging fruit for most rainy season countries. In the US, the Orange County Water District has done extensive work since 1978 to recharge the aquifer (the underground layer of water-soaked sand and rock that acts as a water source for a well) by damming desert washes and creating large sand filters. On a smaller scale, households could recycle water for domestic uses other than drinking; cities, towns and villages could collect rain more effectively. I came across AbTech and its SmartSponges, which collect and filter water run-off and storm rain. This could be an interesting play if the company has strong material science patents that can become a platform in other applications (see storage opportunity below) and has a way to leverage itself by selling globally.

2. Store and transport water in a sustainable and safe way

There is an enormous need for more reliable solutions to store, transport and deliver already filtered water that is currently wasted or re-contaminated over time.

Stored fresh water is prone to contamination. A company that is focused on this market segment is Pax Water Technologies, a subsidiary of Pax Scientific Inc. Quoting their website: “When drinking water becomes stagnant and stratifies—especially in storage tanks exposed to the strong summer sun—water in the upper layers can completely lose its disinfectant residual. This residual is needed to control bacterial re-growth and protect the health of consumers from waterborne illness. For many storage tanks, the solution to maintaining residual is simple: keep the water moving.” This constant remixing system can reduce the need to add more chemical agents and can become solar-powered. This is an interesting niche and OEM opportunity if the patents are solid.

Transporting drinkable water is also a challenge. In the United States, the water infrastructure is such that a staggering 30% of water is lost during transportation, before it reaches the field, factory or household. This loss is higher in countries like India and China. Fixing the infrastructure and regaining that thirty-some percent loss requires higher maintenance and hence more public funding.

This is probably not a big space for entrepreneurs. To fix transportation and storage issues, governments would need to put a price tag on this 30-40% water waste, calculate a ROI and fund the maintenance, possibly with price increases.

This segment is part 1 in the series : Water Shortages: Opportunities for Entrepreneurs
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