Market Insight

Water Shines at 2014 SXSW Eco Conference in Austin

October 29, 2014

Michael Markides Michael Markides Associate Director, Smart Utilities Infrastructure
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Water resources globally are under severe stress even as water management continues to lag in technology adoption, water experts conceded at the recent SXSW Eco conference in Austin, Texas. Nonetheless, both public and private stakeholders in water continue to push for improvements and reform, opening new opportunities for technology providers to the water industry.

In the conference earlier this month that was also attended by IHS analysts, core issues facing water were reviewed extensively by a broad array of speakers and panelists from education, law, public advocacy and policy, and private industry. While topics ranged from food waste to the smart gird, water was the clear conference front-runner in importance, clarity and attendance. At the event, panelists shared a common understanding of the problems facing water supply and quality, at the same time providing a firm and clear view of the obstacles ahead for cities, governments and private industry to resolve the deepening water crisis.


The core issue – we use more water than what we replenish

Water resources are under serious strain, conference attendees acknowledge, as the world continues to consume more fresh water than what is being created. Reserves are being drained at an alarming rate, coupled with increasingly unpredictable weather patterns and severe drought, leaving a potentially bleak future ensnared in the throes of a global water crisis. There simply will not be enough water, experts agree—at least not in the manner in which water is being utilized at present.

To this end, changes must occur—an assessment with which IHS agrees—starting with better water management, extending to the possible discovery of new clean-water sources.

Despite the current grim prognosis, opportunities for technology vendors in the space are growing rapidly, with many parties learning that investing in modern technology could help in water conservation efforts—the first step in fixing the problem. 


The valuation of water

Viewed as a basic right to life, water is rarely sold at its true value. As a result, the needed stimulants to better manage water across its core areas of use—in cities, agriculture, industry, irrigation, power—have been absent.

Change is occurring, however, across all areas of water use, conference panelists felt. For instance, private industry is beginning to recognize the difficulty of conducting business given the specter of an unreliable water supply, while city governments are adopting smart city policies to counter continued strain from economic and social pressures stemming from inefficient water use.

The most tantalizing prospects for change related to how the current crisis could be used to advantage. Successful businesses that spoke at the conference showed how money could be made by specializing in new water technologies, offering encouragement to other technology vendors looking for business opportunities in water.


Policy challenges

While private industry will continue to be the early adopter of new technologies in water management and conservation, the private sector must also be aligned with public policy for efficient water management in the city, state and federal levels, IHS believes.

In particular, the lessons that have been learned, as well as best practices and common agreements on how to reduce water consumption while protecting the environment, must be global in nature. The problem must be understood equally by all parties, the conference believed, and the local nature of water management must be elevated to statewide and federal-level consideration.


Technology providers have growing opportunities in water

The adoption of new technologies for better water management is ramping up significantly in the private sector, analysis from IHS shows.

For instance, companies engaged in mining, oil and gas, and overall resource extraction are investing more money than ever in exploring water conservation, reuse and recycling.

Meanwhile, in the retail and property management sector, firms are investing in smart irrigation technologies that pull together geographic information systems (GIS) technology, knowledge on common flora present, two-way radio systems, and information technology and analytics to radically increase the efficiency of irrigation while decreasing the amount of money spent on water.

For their part, cities across the U.S. experiencing severe droughts are investing in water reuse and recycling programs to make the most of their water resources.


A major culprit in wasting water—and what to do about it

To date, however, one segment of water management remains glaringly behind in investing in modern technology, IHS believes. These are the municipally run water-delivery networks, most of which constitute a prime source of water waste. Technology providers to this segment of the water industry should understand several points to help ease wastage.

First, smart water investment at the municipal level may potentially require additional parties to be involved, not just the water utility on their own. Potentially a smart city or sustainability champion within the city government may be heavily involved in pushing for increased attention to water conservation as it pertains to the water delivery system.

Second, customer engagement with water utilities can now improve radically with the availability of new technology. Leak detection for residential accounts, for example, is now an affordable and much-needed customer service mechanism that is becoming more easily justified every year.

Third, messaging to the public needs to evolve in order to be less generic and theoretical, while addressing topics of interest to those segments of the population that understand and sympathize with conservationists. This will push the public to a better understanding of the true importance of water, versus having the resource viewed as a global crisis without actual points of interaction to which the average consumer can relate.

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