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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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Tapping the potential: A Fresh Vision for UK Water Technology
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
CONTENTS
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4
6
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14 17 19 23 26 29 Foreword
Executive summary
A fresh vision
A world of opportunities
UK strengths: What can we offer?
UK constraints: Are we achieving our full potential?
An honest appraisal: What shapes our performance? Identifying what works: How can we learn from others?
Pinpointing potential: Appropriate target markets
Delivering the vision: An action plan to make it happen
What is the authority for this report?
For the first time, a wide-ranging group of water
technology experts from research, policy and industry
have come together to analyse opportunities in the
global water technology market, examine the UK’s
relative position in this market and articulate how the
UK can improve its performance.
Evidence papers
This report has been informed by a number of
detailed evidence papers, which can be accessed at
www.ukwrip.org/action-groups/business-and-economy.
They are:
Evidence paper 1: A Fresh Vision
Evidence paper 2: A World of Opportunities
Evidence paper 3: UK Strengths and Constraints
Evidence paper 4: An Honest Appraisal
Evidence paper 5: Identifying What Works
Evidence paper 6: Pinpointing Potential
What is UKWRIP?
The UK Water Research and Innovation Partnership
(UKWRIP) provides leadership and facilitates co-ordination
of water research and innovation initiatives concerned
with UK and global water security and the global water
market. It brings together government, industry, third
sector and research communities.
UKWRIP is part of the Living With Environmental
Change (LWEC) partnership, which is led by the Natural
Environment research council (NERC); it is facilitated
by LWEC in partnership with the government Office
of Science. UKWRIP has six action groups covering:
infrastructure; water use in agriculture; environment
and climate change; domestic water use; business and
economy; and sanitation and health. For more details
please see the website at ukwrip.org.uk
This report is an output from UKWRIP’s Business and
Economy Action Group, led by Mark Lane, Chair of
British Water and Chair of the UK Trade and investment
(UKTI) Environment and Water Sector Advisory Group.
For a list of contributors to this publication please see
the back cover.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Foreword
Every nation needs to secure its water supplies
for the future, in the face of demographic and
climate change, with competing demands from
municipal, industrial and agricultural users. Water is
vital for our health and welfare. Water also enables
the contribution of technology to innovation for
energy generation, food security and ecosystem services. This can
deliver substantial collateral benefits in reducing carbon emissions,
saving costs and increasing resilience to climate change.
The UK water industry has a good global reputation through privatisation, world-class
consultants and fair dealing in commercial contracts. However, there are opportunities to expand
today’s UK global market share in water technology innovation from 3% to at least 10% by
2030, in markets such as wastewater reclamation, smart water, flood security and remote-sensing
monitoring systems. This will enable the UK to become an innovation powerhouse in the global
water technology sector, driving sustainable growth and creating more small and medium-sized
enterprises (SMEs) and jobs in the water technology sector. This report presents the findings from a wide-ranging group of experts from research, policy
and industry who, for the first time, have together analysed the opportunities in the global
water technology market and examined the UK’s relative position in this market. It highlights the
fractured and disparate nature of the UK’s water technology sector and the significant market
potential available worldwide if this fractured approach is eliminated.
Key challenges include addressing the lack of alignment between research and commercial
opportunity, as well as the gap between basic knowledge generation and subsequent
commercialisation into marketable products. This will involve providing access to independent
national testing, validation and demonstration facilities, complemented by a more co-ordinated
and focused international marketing strategy, with a more compelling national branding of UK
water capability. This will be important as a catalyst to accessing new market opportunities. I welcome the ‘UK plc’ approach to developing this report and the commitment to continuing
this approach in the implementation of the findings and actions. This will result in a better
alignment of research to market opportunities and valuable economic growth in the water
technology sector.
Sir Mark Walport
Government Chief Scientific Adviser
February 2014
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Executive Summary
Aimed at government, business leaders and investors/funders, this report is
inspired by a clear, ambitious yet achievable vision: to see the UK establish itself
as an innovation powerhouse in the global water technology1 sector, driving
sustainable growth and creating thousands of jobs across the country.
What are the current and future
opportunities in the global water market?
The required expenditure on water and sewerage to
2050 amounts to $8606 billion.
Areas where the UK is currently considered to be
strong include:
• engineering consultancy services
•financial consultancy and funding services
In the six-year period to 2020, the opportunities in
global market sectors identified by this report amount
to over $50 billion.
•flood management
Huge opportunities for the water technology
innovation industry also exist in the fields of energy,
food security, ecosystem services and resilience to
hazards. Development of these opportunities will
produce substantial collateral benefits, including
carbon reduction, cost savings and secure agricultural
production. In responding to this potential, the UK has
a strong research and innovation base to build on.
•network and environmental monitoring
Where does the UK currently stand?
England and Wales are generally regarded overseas
as having made a success of water privatisation. In
addition, the UK is acknowledged as having world-class
consultants in the sector and a reputation for fair dealing.
But the data show that we could do much better in
terms of our performance at global level.
Today, the UK’s share of the global market in water
technology is just 3% (£1.5 billion), involving around
15,000 jobs in 400 small and medium-sized enterprises
(SMEs).
1
• smart water; leakage management
•asset management and optimisation
•mobile data transmission
•waste and wastewater treatment
•energy recovery from wastewater
•water efficiency.
Why are we where we are?
Reasons include:
•lack of alignment between research and
commercial opportunities
•the gap between basic knowledge generation and
subsequent commercialisation into marketable
products
•a fragmented industry
•disparate national testing, validation and
demonstration facilities
•no co-ordinated and compelling national branding
of UK water capability for international markets
•no overarching research or industrial strategy
for water.
The technology (products and processes) employed by those who manage and use water.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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Where could we realistically get to by 2030?
We have estimated that the UK could increase its global
market share in water technology innovation to at least
10% (£8.8 billion), providing 71,000 jobs and involving
around 960 SMEs.
Four essential steps to get us there
1
Strengthen the public-private UK
Water Research and Innovation
Partnership (UKWRIP)
Aim: To establish a coherent, unified voice
capable of leading forward the UK water
technology sector internationally and
providing an overall co-ordinated strategy.
3
Provide independent national
testing, validation and
demonstration facilities
Aim: To accelerate collaborative
innovation and catalyse its
commercialisation.
2
Create a sharp focus on
commercial opportunities
and customer needs
4
Implement a co-ordinated,
focused international
marketing strategy
Aim: To ensure that these drive forward
water technology research, innovation
and exploitation in the UK.
Aim: To develop a strategic brand
built on the UK’s unique selling
points and spearheaded by an annual
international water congress held in
this country.
How long do we have?
Next steps
We know that we are good on water, but our competitors
are forging ahead. If we fail to catch up within three years,
they will be so far ahead that we will miss the boat.
The immediate next step for the UK must be to develop
a costed business plan with clear actions and deliverables,
based on the main steps outlined above.
This report is the work of UKWRIP’s
Business and Economy Action Group and
is one of a series of UKWRIP outputs.
For more information contact
Faith Culshaw, UKWRIP co-ordinator,
at faith.culshaw@lwec.org.uk
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
A Fresh Vision
This report is inspired by a clear, ambitious yet achievable vision: to see
the UK establish itself as an innovation powerhouse in the global water
technology sector, driving sustainable growth and creating thousands
of jobs across the country.
Successful realisation of this overarching vision will involve the
accomplishment of three specific goals by the year 2030:
71,000
jobs
jobsjobs
71,000
10%
global
market share71,000
10%
global
market
share
10%
global
market
share
3% 3%
£8.8bn 15,000
£8.8bn
£8.8bn
15,000
3%
485% 485%
Increase
Increase
485%
Increase
2014
2014 2014
2030
2030 2030
Growth in the UK’s share of the
global market in water technology
innovation from 3% to at least 10%,
representing an increase from £1.5
billion to £8.8 billion per year.
400400
15,000
375% 375%
Increase
Increase
960
960
SMEs
960
SMEs SMEs
375%
Increase
400
140% 140%
Increase
Increase
2014
2014 20142030
2030 20302014
2014 2014
Growth in the number of jobs in
the UK water technology sector
from 15,000 to 71,000.
140%
Increase
2030
2030 2030
Growth in the number of SMEs
active in this sector from 400
to 960.
Attaining these goals will depend on the successful execution of four key actions:
1. Strengthen
the public-private
UKWRIP
Establishing a
coherent, unified
voice capable of
leading forward the
UK water technology
sector internationally
and providing an
overall co-ordinated
strategy.
2. Create a sharp
focus on commercial
opportunities and
customer needs
Ensuring that these
drive forward water
technology research,
innovation and
exploitation in the UK.
To investigate further, see Evidence Paper 1.
3. Provide
independent
national testing,
validation and
demonstration
facilities
Accelerating
collaborative
innovation and
catalysing its
commercialisation.
4. Implement
a co-ordinated,
focused international
marketing strategy
Developing a
strategic brand built
on the UK’s unique
selling points and
spearheaded by an
annual international
water congress held
in this country.
How will realising this vision benefit the sector’s UK stakeholders?
Government:
✓ economic growth
✓ jobs
✓ exports
✓ more effective use of existing
funding
✓ resilient infrastructure
✓ development of effective national
and international water policy
✓ societal and environmental goals
Consultancy services:
✓ growth
✓ exports
Technology SMEs:
✓ growth
✓ exports
Water consumers:
✓ maintenance of services at
lower cost
✓ increased recognition of
the value of water and its
interdependency with other
sectors of the economy
Environment:
✓ sustainably managed and
improved at a lower cost
Research communities:
✓ increased real-world impact
of research
✓ identification of new research
priorities/opportunities
ocal authorities & Local Enterprise
L
Partnerships:
✓ more effective use of funding,
better alignment of regional
growth with national strategy
UK water technology companies:
✓ bigger share of the home
market
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
A World of Opportunities
Around the world, delivery of reliable, sustainable water services poses huge
challenges. Tackling these challenges presents major opportunities for the UK
water technology sector.
Water: the hard facts
•at least 1.9 billion people currently rely on unsafe water
•4.1 billion people rely on unsafe sanitation
•1.7 billion people are threatened by shrinking groundwater resources
•36% of the world’s population lives in areas affected by extreme water stress – set to rise to 52% by 2050
•6% of deaths worldwide and 9% of time lost due to ill health stem from inadequate water, sanitation
and hygiene
•water resources worth $9-24 billion are squandered each year due to leakage and other losses
• the global ‘risk to business’ from insecure water supplies totals $400 billion.
Water is essential to life and prosperity
From a global perspective, the need to provide
secure water supplies is paramount. Failure to do
so threatens lives and livelihoods. It also holds back
economic development. But the scale and complexity
of the task are sobering. Growing populations, shifting
demographics, climate change, water scarcity at local
and regional level, competing demand from domestic,
industrial and agricultural users – these are some of the
factors that amplify the difficulty of achieving the goal.
Yet as the hard facts underline, we urgently need
effective solutions.
FACT FOR
THOUGHT
In Riyadh, spending $400
million on basic network
repairs would avoid the
need for new desalination
plants costing $2.1 billion.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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Water abstractions worldwide: projected growth to 2030
6900km3
2030
2010
2030
2010
2030
2010
2030
2010
4500km3
3856km3
2699km3
1500km3
434km
900km3
3
Domestic, commercial
and municipal
123% increase
733km3
Industrial
105% increase
Pressure on supplies will keep ramping up
A historic process is now taking place: the biggest ever
shift from a rural to an urban world. In 2011, 3.5 billion
(50%) of the world’s population lived in towns and cities.
By 2050 this will have increased to 6.6 billion (69% of a
forecast population of 9.6 billion), applying acute pressure
to water supplies. Indeed, taking all factors into account,
water abstractions are set to see a 79% increase by 2030.
Yet we already abstract 92% of our actual renewable
water resources, and imbalances between availability
and need are apparent in many parts of the world. It is
unclear how the shortfall will be met without extensive
innovation in water technology.
Climate change poses a big challenge
A changing climate is already affecting the world’s water
resources. Further impacts – such as increased rainfall
at high latitudes, less rainfall elsewhere and a higher
frequency of extreme droughts – will become evident
as the century progresses. As well as accentuating water
imbalances, climate change could increase the cost of
coastal flooding to $1 trillion by 2050 compared with
Agricultural
67% increase
Total
79% increase
$6 billion in 2005; major cities such as New York and
Guangzhou are likely to come under threat. The risk of
flooding both from intense rainfall and associated with
growing urbanisation will also increase. Responding
to the climate challenge will also, for example, require
demand management systems that can cope with
changing patterns of water availability.
Other emerging threats need to be
confronted
Conventional wastewater treatment is struggling to
deal with threats that may have serious implications
for human health. Rivers and drinking water are being
contaminated by drugs – in the UK, for instance,
discharges from treatment works contain antibiotics
and antibiotic-resistant organisms. Persistent Organic
Pollutants (POPs) and pesticides are a further source of
problems for water supplies and ballast water from ships
could contribute to the spread of antibiotic resistance
and the introduction of invasive species.
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
A Global Priority
Deteriorating US water and
wastewater infrastructure
needs effective solutions.
£1
£8
Every
spent on flood
protection in the UK saves
in repairing damage, according to
the Environment Agency.
UK
USA
Mexico
Africa
South America
Brazil
Severe water stress is a key
challenge for Brazil, Russia,
India and China (the BRIC
countries).
25%
of people in
towns and cities beyond
Western Europe and North
America are not connected to
piped water.
75%
do not have their
sewage adequately treated.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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31%
leakage rate in the Saudi
A
capital Riyadh causes over 1 million m3
of water to be lost every day.
Russia
2%
China loses
of its Gross
Domestic Product due to polluted
water resources and depletion of
groundwater reserves.
Asia
Middle East
China
Saudi Arabia
India
South East Asia
Poor water services are
seriously hampering
economic development
throughout South East Asia.
India, Mexico and the Middle
East are particularly vulnerable
to groundwater depletion.
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Keys to success: Investment
Keys to success: Innovation
In 2013, global capital and operating expenditure
on water resources, networks and treatment and on
wastewater networks and treatment exceeded $550
billion. In OECD (Organisation for Economic Co-operation
and Development) countries, spend is driven by
environmental and public health legislation and the
need to rehabilitate existing infrastructure. Elsewhere, it is
driven by the need for universal service provision and for
secure water supplies. At a conservative estimate, $8.6
trillion must be spent to achieve comprehensive global
water and sewerage coverage by 2050.
Innovation must play a pivotal role. Technologies have
already been developed that can contribute to meeting
the challenges, but many more will be needed if global
goals are to be achieved. Such solutions may address
fundamental issues of supply, or focus on optimising
water efficiency and cutting the industry’s capital and
operating costs (eg by recovering energy and nutrients
from wastewater). Across industry as a whole, the market
for such technologies is relatively small but faster moving
than municipal markets; it also offers higher margins.
Municipal markets are cost-led and more conservative
but offer greater economies of scale and more scope for
repeat business.
Required expenditure to 2050 ($ billion)
Water
OECD countries
Global total: 3143
918
1070
BRIC countries
1155
Rest of the world
Sewerage
1523
Global total: 5463
1889
2051
Total
2441
2959
3206
Source: OECD, 2011.
There are significant multi-billion
pound opportunities in the global water and
wastewater market over the next 25 years
that provide potential for a step-change in
engagement for UK companies.
Mark Fletcher, Director and Global Water Leader, Arup
To investigate further, see Evidence Paper 2.
Global total: 8606
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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Ten examples of major market opportunities
Even within the next six years, huge commercial
opportunities will be ripe for exploitation. These include:
• $
23 billion – the projected size of the wastewater
reclamation market by 2017, as wastewater is
Advanced
irrigation
transformed
from budget-sapping burden to water,
energy and nutrient-rich resource
Wastewater reclamation
• $
16-23 billion – the projected size of the smart water
Smart
water
market by 2020 as demand grows for real-time data
Monitoring
andwater
remote
(satellite) sensing
that aids active
management
Smart soil-monitoring systems
• $
4 billion – the forecast size of the market for
monitoring and remote sensing (eg via satellite) by
2020. Such technology can help to anticipate sewer
flooding and other incidents, and provide real-time
data on water resources and their usage
• $
3.4 billion – the market for advanced irrigation
anticipated by 2016
• $
2.3 billion – the market for smart soil-monitoring
systems anticipated by 2020.
Other substantial opportunities include:
•$82 billion – the municipal and industrial market for
water engineering and chemical products, growing at
8% per year
• $
20-35 billion – the potential market for smart flood
protection combined with sustainable urban drainage
systems (SUDS) for road and surface drainage
•$19-26 billion – the projected size of the market for
the treatment of ballast water from shipping
• $
4-6 billion – the market in developed economies
for water-efficiency solutions (eg waterless urinals,
minimal-water washing machines)
• $
3-5 billion – the size of the leakage minimisation and
pipeline rehabilitation market.
The identification of critical interdependencies beyond
the water sector (eg with energy, infrastructure and
agriculture) is another key priority that urgently needs to
be addressed. Innovations that are adopted need to take
account of these interdependencies.
Opportunities within the next six years ($bn)
2016
2017
$3.4
Advanced irrigation
$23
2020
2020
2020
$4
$2.3
$16 ‒ 23
Wastewater reclamation
Smart water
Monitoring and remote (satellite) sensing
Smart soil-monitoring systems
Various sources cited, including Global Water Markets 2011, published by GWI.
A better water future
• S
mart irrigation: using less water and delivering
higher crop yields through soil-moisture monitoring
and drip irrigation.
•Smart distribution: achieving better leakage
detection, better-focused maintenance and
improved pressure management.
•Smart meters: delivering easy-to-use real-time
information for customers and utilities alike, with
forecast sales of these devices reaching $3-10 billion
by 2020.
KEY
MESSAGE
• S
mart consumer goods: using minimum or
zero water.
•Smart water usage: including rainwater harvesting
as well as systems for recycling wastewater and
greywater.
•Mobile communications: enabling customers in
developing economies to make payments remotely
and inform utilities/agencies about problems with
their water and sanitation services.
Provision of improved water services worldwide poses challenges that are
triggering innovation and opening up extraordinary commercial opportunities.
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
UK Strengths: What Can We Offer? Seizing the opportunities requires the right expertise. In several respects, the
UK has an impressive platform of capabilities that can provide a springboard
to future success.
We have a proud pedigree in research and
innovation
The UK funds a considerable amount of water research
and innovation through its research councils. There
are also many centres of excellence at universities and
elsewhere, as outlined on page 19. Indeed, our track
record in innovation stretches back 400 years. From the
world’s first city-level water transfer project, completed
in 1613 and still one of London’s main water resources,
to the invention of the activated sludge process in 1914,
arguably no country can match the extent or influence of
our pedigree in pinpointing visionary solutions to waterrelated problems. Managing existing water infrastructure
is well-established as a key UK strength.
We have an enviable reputation for fair play
In an era when corruption has emerged as a growing
source of international concern, the UK’s reputation for
integrity and transparency can help us to break into
global markets. In 2012, Transparency InternationaI’s
Corruption Perceptions Index ranked the UK an
impressive 17th out of 174 countries, underlining our
renown for fair and straight dealing.
Our utilities are well-regarded internationally
The UK’s water and sewerage utilities provide some of
the cleanest drinking water in the world. They benefitted
hugely from their 1973 river-basin-level reorganisation,
which gave the UK a lead of decades over other countries.
Moreover, since the industry’s privatisation in England and
Wales in 1989, the utilities there have delivered four major
capital spending programmes on time and on budget.
New capabilities continue to emerge
The relentless emergence of innovative companies
is an undeniable feature of the UK water technology
environment. Those with the pragmatism and
determination to overcome challenging domestic trading
conditions are best placed to survive, thrive and carve a
niche in export markets. Indeed, many of the innovations
developed by UK firms offer significant growth potential
for the years ahead.
Bluewater Bio’s HYBACS at Tubli – the largest wastewater treatment plant
upgrade in the Gulf States.
There are at least six recognised water innovation
hubs worldwide but the UK is not among them. If properly
organised, the UK has at least an equivalent innovative
capability – and probably a significantly greater one.
Tony Conway, Executive Director – Strategic Programmes, United Utilities
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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A survey of UK strengths
Primary Capabilities
Niche Excellence
Engineering consultancy services
The UK is a recognised global leader, covering
disciplines such as project management, asset
management planning, environmental management
and environmental consulting. Early engagement on
projects via consultancy can be a gateway to further
commercial opportunities downstream.
Network and environmental monitoring
Competitive technologies are now emerging in
key areas such as river water monitoring, sewer
management, high-speed monitoring, satellite
applications and flood prediction systems.
Financial consultancy and funding services
We have an enviable reputation in accountancy,
insurance, economic consulting, legal services,
marketing and specialist services (eg venture
capital, project finance). Newer expertise in
outcomes analysis, ecosystems services valuation,
risk management and catastrophe modelling is
enhancing our standing.
Mobile data transmission
Our position at the vanguard of the fast-moving
field of mobile telecommunications means we are
very well placed to apply our expertise to the water
sector. Cuts in utility operating costs are just one
benefit from leading-edge developments in areas
such as mobile payment systems and real-time
integration of water and wastewater data.
lood management
F
The UK’s flexible flood management approach has
enabled firms to develop flood protection systems,
stormwater management solutions and SUDS. We
are also developing leading-edge expertise in
integrating flood modelling with sensors and river/
satellite-based monitoring to improve early flood
warning.
aste and wastewater treatment
W
Although this sphere is dominated by our
international competitors (eg France and the
US) UK firms have established a presence in some
niche areas.
mart water: leakage management
S
The UK excels in a field where the economic
benefits are substantial, through improved pipeline
performance and lifetimes. No-dig leakage detection/
monitoring solutions and pressure-management
systems are particular fields of speciality.
Energy recovery from wastewater
With interest increasing in deriving energy from
sewage treatment, scope exists to find innovative
ways of making the process more cost-effective.
Specialist UK players are well-positioned to build on
existing capabilities and benefit from this trend.
Asset management and optimisation
As one of the first countries to offer universal water
and sewerage, the UK has infrastructure that often
dates back many decades – a powerful incentive to
devising solutions that allow assets to remain in use
for as long as feasible and that optimise performance
with minimal disruption.
Water efficiency
Minimising water demand through so-called
‘disruptive’ innovations – such as minimal-water
washing machines, waterless urinals and dry
sanitation – offers enormous potential worldwide.
UK firms have skills appropriate to establishing a
niche presence in this market.
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Six snapshots of export success
Bluewater Bio
Set up in 2007, a key goal of this firm has been to
commercialise its HYBACS wastewater technology.
95% of the systems are UK-made, with the emphasis
on exports. Following initial orders secured in South
Africa and Bahrain (Tubli), a successful pilot-plant test
with Severn Trent was completed in 2013. The firm has
established a technical alliance with Thames Water.
Hydro International
Hydro International was founded in 1980, with
operations subsequently set up in the US and Ireland.
The company specialises in vortex-based stormwater
handling systems. Distribution agreements have
been secured in Australia, Russia, Saudi Arabia and
Singapore. In 2012, 44% of the firm’s £35 million
revenues came from beyond the UK.
i2O
Founded in 2005, i2O has developed a smart pressure
management system for water networks that cuts
leakage by 25-35% and reduces rates of pipe burst by
40-50%. After securing its first major order in Malaysia,
the company now exports to 14 countries and is
developing its UK customer base.
UK Flood Barriers
Founded in 2007, UK Flood Barriers supplies effective,
intelligent flood defence technology for the built
environment. The company specialises in protecting
critical infrastructure, as well as homes and businesses,
and is established as a centre of excellence for R&D. It
works with its partners Global Flood Defence Systems
to service all continents.
Syrinix
Set up in 2004, University of East Anglia spinout Syrinix
has developed the TrunkMinder smart monitoring
system. This pinpoints leaks in trunk mains by
delivering non-stop real-time data. Thames Water
now uses the system, which has also been examined
by potential clients in Europe, North America and the
Middle East.
XP Solutions
Originally founded in 1983 as Micro Drainage, this
company developed its WinDes software to model
surface-water drainage and flood conditions as an
aid to storm and flood management. By making
modelling exercises much faster, WinDes delivers
dramatic productivity gains. In 2008, Micro Drainage
merged with a US firm to help drive global exports.
FACT FOR
THOUGHT
KEY
MESSAGE
Between 2008 and 2013,
41 UK-based firms were
showcased at ‘Wet Network’
industry events in London,
designed to highlight the
capabilities of the water
technology sector.
The UK has proven strengths in devising and disseminating innovations
that can address key water-related challenges worldwide.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
17
UK constraints: Are we achieving our full potential?
Despite successes and a long tradition of innovation in water handling
and management, the UK sector punches well below its potential weight
in global terms.
We are a minor international player
Overall, the UK is undeniably a ‘bit player’ in the
worldwide water technology sector. The Department for
Business, Innovation and Skills estimates that our exports
of all water-related goods and services total £1.5 billion
per year; this represents just 3% of the global market. In
2013, global water and wastewater technology capital
spending totalled an estimated £51.2 billion, reinforcing
just how modest the performance of ‘UK plc’ currently is.
We significantly underperform in
many areas
In rainwater harvesting and greywater recycling,
for example, we lag well behind our international
competitors. To date, there have also been limited
opportunities for UK firms to develop activities in SUDS.
Even in the sphere of smart water – one of the most
dynamic in the whole market – there is no coherent
framework that encourages UK utilities to innovate.
Meanwhile, major global markets such as desalination and
irrigation are notable for the limited presence of UK firms.
Lack of UK impact: today’s big players in traditional market segments
Design & Engineering
Process Automation
France
Veolia Water
Suez
France
Schneider
Chemicals &
& Control
US
GE
Pentair
US
Black & Veatch
CH2M Hill
Tetra Tech
Aecom
Louis Berger
Sulzer
ABB
Germany
Remondis
ABB
South Korea
Doosan
Germany
Siemens
Switzerland
Sweden
Denmark
Grundfos
Materials
Treatment
Technology
France
SNF Floerger
Veolia Water
France
Veolia Water
Degremont
US
Ecolab
Dow
Du Pont
3M
GE
US
Ecolab
Dow
3M
GE
Xylem
Pall
Aquatech
BASF
Germany
Finland
Kemira
Germany
Siemens
Canada
Bioteq
Ovivo
Sulzer
Switzerland
South Korea
Doosan
Based on Frost and Sullivan’s ‘representative sample of industry participants’, from: Global Smart Water Market ‘Unearthing the REAL Value of Water and
the Industry’ presented at the Tekes seminar on BioRefine and Water on 27th November 2012 at the Marina Congress Center in Helsinki by Fredrick Royan
– Research Director, Global Environment (Water) Markets.
18
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Negative perceptions are deeply rooted
The UK’s innovative capabilities are often overlooked
or underestimated, especially within the UK itself. A
key reason relates to concern about the UK utilities’
market dominance and a regulatory climate that inhibits
innovation. Although this concern is not so pronounced
overseas, we are still not seen as a global leader except
in smart water. Such perceptions have a tangible impact,
inhibiting funding and deterring investment at every
stage of the innovation cycle.
FACT FOR
THOUGHT
Just one UK firm, Syrinix, made
the 2012 Artemis Project
Top 50 Water Tech Listing
of the world’s most
promising advanced water
technology companies.
Perception vs reality?
UKWRIP’s 2013 UK water survey showed that those
whose work is not mainly UK-focused tend to view
UK innovation more positively than those focused
mainly on the home market. This may be because
of the success of UK SMEs and universities in the
international water sector. Or it may be due to a
‘legacy view’ of the sector based on its historical
standing and UK utilities’ international activities
immediately after privatisation.
Nevertheless, all respondents shared a broadly
negative view of innovation at UK water utility
level in particular. Nearly two-thirds gave the
utilities a score of five or less out of ten and around
one-third gave them a score of three or less. The
reason was the utilities’ perceived unwillingness
to consider innovation and their perceived lack of
success in embedding it. With larger companies
also viewed negatively with regard to their ability
to innovate, it may fall to SMEs and universities to
assume a key role in innovation within the UK water
technology sector.
To investigate further, see Evidence Paper 3.
From our experience, the present regulatory
regime provides a lack of legal certainty with resultant
formidable barriers to entry for the innovation and
selling of water treatment products on the UK market.
Joe Barrett, Chairman, RainSafe™ Water
KEY
MESSAGE
Globally, the UK is seen as a niche player – our companies have not secured
a dominant position in any traditional water or wastewater market.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
An Honest Appraisal: What Shapes Our Performance?
To tackle the shortfall in the UK’s performance, the first step is to dissect the
causes and so provide a firm foundation for new thinking.
Our overseas presence has declined
Until the turn of the millennium, several UK water
utilities (eg Thames Water, United Utilities) were
established world leaders in the development of
international activities. However, following the price
cuts in the 1999 Ofwat periodic review, this was no
longer the case as these companies scaled back
their non-regulated activities. There are a few partial
exceptions to this, eg Severn Trent Water, which has
retained significant presence in the USA and Italy.
Limitations in our home market
Not only do UK firms have too low a profile in some
of the more attractive market areas, but there is no
clear system for introducing home-grown innovation
to our utilities. Some of our most successful
companies have had to win overseas orders before
they could secure the project references needed to
break into the UK market. Moreover, five-year asset
management programme cycles create a cyclical
home market as well as obstructing consistent
application of capabilities overseas.
FACT FOR
THOUGHT
Unlike key competitors, the
UK sector has no unified
platform enabling it to
project a coherent image
to potential customers
worldwide.
Investment in private sector R&D and
innovation is modest
In the UK, water is not seen as an attractive
proposition for investors in innovation. Water utilities
themselves spend comparatively little on R&D
(see page 20); this is largely due to the absence of
regulatory incentives to invest where there is no
short-term prospect of attractive returns.
Lack of co-ordination
The UK sector is served by several trade associations
including British Water, Water UK and SBWWI (the
Society of British Water and Wastewater Industries).
But there is no coherent platform for making
their collective presence felt worldwide. Lack of
integration at government, regulatory, company
and utility level also means there is no single point
of contact for firms keen to develop a presence at
home or abroad.
Lack of incentives at regulatory level
Separate economic, water quality, environmental
and flood regulators have created a fragmented
framework that limits capacity to compete
overseas. In particular, lack of regulatory incentives
for innovation combines with utilities’ inherent
conservatism to inhibit utility investment and
product development. This contrasts starkly with the
regulatory framework for telecommunications, which
has explicitly supported innovation and has helped
UK mobile services to secure extensive export success.
19
20
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
The Research Conundrum
Overall, the UK has a disappointing track record in transforming water-focused
research into real-world products and services. Why is this so?
UK water research and innovation:
How, where, who?
Research-based consultancy WRc currently has a research
portfolio worth around £2 million.
Generally, the volume of spend in the private sector is
invisible to external view.
ver 60 UK universities conduct research spanning
O
areas such as freshwater ecology, flood-risk management
and modelling, treatment technologies for water and
wastewater, and urban drainage. As well as large water
engineering departments, many multidisciplinary groups
are in place. Extensive expertise also resides at specialist
research centres (eg the Centre for Ecology & Hydrology).
The focus of funding
s the diagram below shows, only research councils occupy
A
the ‘basic research and training’ zone (one of the biggest
areas of spend) within the funding spectrum. Comparatively
few players occupy the commercialisation and exploitation
zones often dubbed ‘the Valley of Death’. Importantly,
because overall support for research is greater than for
innovation and for the development of market-ready
products, academics tend to target their efforts at the front
end of the spectrum.
ach year, the research councils channel around £120
E
million into water-related research (pure and applied).
Recent years have seen a trend towards funding more
multi- and interdisciplinary programmes, such as the
new UK Droughts & Water Scarcity programme. Securing
industry involvement in such programmes is challenging,
although companies sometimes act as partners on
individual research projects.
All UK water utilities subscribe to UK Water Industry
Research (UKWIR) for collaborative, ‘one voice’ research,
mainly to provide science and methodologies that support
sound regulation. UKWIR has an annual budget of around
£3.5 million and often co-funds research with regulators
and research councils.
Each year, water utilities in England and Wales invest
an estimated £18 million in R&D. At around 0.18% of
revenues, this compares unfavourably with the average
figure of 0.4% for French companies Veolia Environnement
and Suez Environnement, for example. Indeed, R&D
expenditure is falling (eg from £28 million in 2002/03 to
£23 million in 2007/08). However, a complete picture of
overall spend is currently unavailable.2
he research councils’ primary role is to fund worldT
class research and training. But they do also strive for
‘excellence with impact’ and have a range of schemes
geared to facilitating knowledge exchange and enabling
commercialisation of research results. Such mechanisms
include industry internships, studentships, Centres for
Doctoral Training and strategic partnerships with business.
Some universities have bespoke mechanisms in place to
encourage businesses to innovate and grow. For instance,
Lancaster University adopts a multi-faceted approach. This
includes: provision of ‘incubation’ facilities for business
start-ups; the Leading Enterprise and Development (LEAD)
programme to enhance company performance; and an ecoinnovation initiative with a commercialisation consultancy
linking 50 SMEs with 50 specially recruited PhD students.
Water research, innovation and exploitation funding landscape
Basic research
and training
Applied research
and development
Knowledge
exchange and
technology transfer
Demonstration
Commercialisation
Exploitation
UK research councils
Technology Strategy Board (TSB)
Defra, DfID and other government departments
UK Trade & Investment
EU Framework Programme
Public Sector
Private Sector
EUREKA (EU Programme)
UK Water Industry Research
Water companies
Supply chain companies and consultancies
NB. Diagram is illustrative only; size of bars does not represent quantity of funding.
2
Water users
Reported water utility R&D spend is perhaps misleading when making comparisons with sectors such as pharmaceuticals, as the majority of water innovation
spend (including utility R&D staff) is charged to the capital account and not reported as R&D. UK gas and electricity utilities take a similar approach.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
21
Nine reasons why research rarely turns into products/services
1. Lack of an aligned UK vision on water
6. Academic and ‘techie’ cultures
Our fragmented sector operates in silos and without a
strong, unified voice.
Not all academics have the incentive, will or
understanding to commercialise their research. Similarly,
in early-stage technology companies, it can be hard for
the focus to switch from the technology to the market.
‘Techies’ are likely to be more interested in perfecting
technology than thinking about customers and markets
– even though market pull is often needed to give
companies the direction and focus essential to ‘take-off’.
2. Lack of a central innovation hub
Innovation activities need to be co-ordinated and
disseminated, and organisations need a ‘go to’ point for
information on ongoing/planned initiatives and industry
contacts. Absence of a hub also slows down the trialling
and demonstration of innovative products – testing with
several utilities is currently necessary because each has
different standards.
3. Funding focuses on research not
exploitation
Research council funding decisions are mainly based on
scientific excellence, with impact a secondary criterion.
‘Directed’ research is most likely to be driven by policy or
social needs. There are signs, however, of a move towards
more innovation-based funding (eg the EU Horizon 2020
research and innovation programme).
4. Water has not been an explicit
TSB priority
In 2011, the Technology Strategy Board (TSB) decided
against establishing an innovation platform in water
because it felt that the UK water utilities were insufficiently
supportive of investment in innovation. However,
water is treated as a cross-strategy theme and waterrelated projects are funded through several other TSB
competitions (eg agri-food and manufacturing). In 2012,
a £4 million water security competition funded both
evolutionary and revolutionary projects.
5. Lack of ‘co-creation’ to aid take-up
Despite mechanisms to involve industry from the outset, it
is often hard to achieve genuine co-creation (as opposed
to co-funding) of innovations. This may be due to a failure
to secure the engagement of the right people in a
company (ie those who really understand what science
and innovation can do for them). Or the right people
may then be unable to cascade research outputs through
their organisation due to lack of resources. Fundamentally,
businesses are only likely to buy into research if they have
a direct commercial interest in the results.
7. Low returns on investment and long lead
times for products/services in the UK
These not only discourage investors but also make it
hard for SMEs to thrive, no matter how good their ideas
or innovations. Most UK domestic customers and the
regulators looking after their interests are not intrinsically
concerned about global growth by the UK sector.
Supporting innovation that may require short-term
increases in the cost of – and the risk to – services may be
a difficult ‘sell’ to customers and regulators.
8. Lack of key skills
Within the UK, there is a marked shortfall in the skill set
needed to ‘make innovation happen’. Some schemes do
exist, however, to improve skills provision – for example,
the Engineering and Physical Sciences research council’s
WISE and STREAM Industrial Centres for Doctoral Training
for the water sector, where engineering doctorates are
co-sponsored by industry.
9. Our market is not geared to driving
global success
The simple fact is that the UK market does not have
any focus on global opportunities except for those
identified by individual companies. These firms face stiff
competition from rivals based in countries that take a
long-term view of water and align resources to exploit
opportunities.
22
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Swimming against the tide: a research commercialisation case study
NERC-funded research led directly to the formation
of Salamander, a spinout from the University of
Manchester that makes the water quality monitoring
product Hydraclam®. It is predicted that, by 2016,
this product will have generated over £24 million in
Gross Value Added for the UK. Key to this success has
been the sheer perseverance and relentless effort
necessary to overcome two big barriers: firstly there
was no incentive for the private sector to support the
underlying research because it focused on generating
benefits for society as a whole, and secondly research
outcomes were uncertain and combined low return
on investment with high risk in terms of developing
marketable products.
Working with water companies in the UK:
the view from academia
Academics working in the sphere of water innovation
report that water companies have neither the staff nor
resources to innovate or develop new technologies
systematically. Even if a utility takes a product to pilot
stage, it may well not continue beyond that point. This
may be because testing and validation can be tortuous
or do not fit well with the UK water investment cycle.
Fundamentally, to be accepted, innovative ideas need
to be mature and low risk (in technical and financial
terms) and offer a substantial benefit. A major underlying
problem is the relative low cost of water services,
making it very hard to justify new approaches. The most
expensive elements of innovation – development and
demonstration – are generally only carried out by water
utilities when civil contractors or process suppliers have
introduced new technology on a trial basis at their own
expense. Additional resources may be awarded, though,
via a research council or TSB scheme.
Some recent developments
The Defra/Ofwat Innovation Leadership Group, working
with UKWRIP and the research councils amongst others,
is developing both a model to link research to innovation
and market needs, and metrics of UK innovation effort.
To investigate further, see Evidence Paper 4.
We need earlier, closer links between business and academia,
to ensure we capitalise on our world-beating capabilities in linking
water systems with other services. Stakeholders have yet fully to
appreciate the benefits of innovation through collaboration.
Professor Carolyn Roberts, Environmental Sustainability Knowledge Transfer Network
KEY
MESSAGE
A wide variety of factors have blunted the UK water technology sector’s
‘innovation edge’ and its ability to exploit export opportunities.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
23
Identifying What Works: How
Can We Learn from Others?
Steps that could strengthen the UK’s position in export markets are already being
taken by our most successful competitors.
Global leadership is spread far and wide
In water technology, countries now setting the
pace include: France, with companies such as Veolia
Environnement, Suez Environnement and Schneider
at the forefront; the US, whose prominent players
include GE, Xylem and mid-sized firms such as Pentair
and Ecolab; Japan, typified by the success of Ebara and
Horiba; and Germany, through firms such as Siemens,
BASF and Remondis. China, Singapore, India and Israel
are rapidly building up an international presence too,
particularly in the developing economies. Another feature
of the global market – underlining the fact that a big
domestic market is not a prerequisite to international
success – is the range of players from comparatively
small countries: for example, Kemira (Finland) and
Bioteq (Canada).
These leaders benefit from a partnership
approach
One thread linking the experiences of many of today’s
global leaders is a high level of co-ordination between
government, academia, utilities and private sector. This
partnership approach – currently absent in the UK – has
acted as an engine of growth, providing a robust basis for
the development of competitive, innovative companies
capable of impressive export performance.
KEY
MESSAGE
FACT FOR
THOUGHT
Lack of a UK test bed for
water technologies is a
key factor preventing
the development of a
genuine national UK water
technology cluster.
Innovation clusters are key to success
Innovation clusters drawing together private and public
sector expertise in a culture of co-operation can provide
fertile ground for growth. In water technology, there are
many international examples of such clusters delivering
a powerful impetus to local, regional or national
economies. Detailed research into six clusters – in Canada
(Ontario), Germany, Israel, the Netherlands, Singapore and
the US (Milwaukee) – has highlighted the secrets of their
success (see page 24).
Current UK innovation clusters are limited
in scope
A number of current and emerging innovation clusters
in the UK are centred on specific parts of the country.
(For instance, Liverpool City Region aims to develop
the world’s first ‘sustainable coastal city region’ water
innovation cluster; this will specialise in marine impacts,
river clean-up and smart infrastructure developments.)
However, challenges exist around: central co-ordination;
a shared sense of focus to join the dots between
researchers, entrepreneurs, investors, companies and
large infrastructure projects; and clear branding to secure
inward investment and global outreach.
Innovation clusters and a partnership approach involving government, industry
and academia have helped competitors to build a big lead over the UK.
24
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
12 Steps to the Ideal Innovation Cluster
Strong central governance, a not-for-profit set-up and a long-term financial
commitment from government – these provide the foundation for success.
But our research shows an innovation cluster should also be...
1
... Government-driven and nationally organised.
This will facilitate integration of regional initiatives
and mobilisation of the whole supply chain (academic
organisations, research institutes, manufacturers, financiers,
contractors etc). For example, the Ontario cluster was
established by an Act of Parliament, while the key elements
in the Israeli cluster are shown opposite.
2
...launched at ministerial level. This can ensure a
significant impact on the international political agenda
and help to secure a competitive advantage. Input from
the German cluster notes that if it had ‘thought bigger’
from the start, it would have more easily established a
prominent position in the sector.
3
...minister-led, with communication at governmentto-government level. This can help to create the
confidence needed to encourage involvement by
academia and the private sector. The Dutch cluster has
benefited from established diplomatic relations that
have provided the basis for government-to-government
partnerships with five countries.
4
...defined by a strong brand built on a very
compelling story. This makes it easier to implement
a pan-media communications strategy and ensure a
unified presence at major conferences and other events.
The Singapore cluster, for instance, is focused on the
challenges posed by the country’s fragile water supply.
5
...supported by an international water convention or
similar platform in the cluster’s home country. This
enables the cluster to showcase its expertise and engage
with the global water community. It also provides a chance
to demonstrate government leadership (eg through
ministerial attendance) and to link with wider political/
business agendas. To take just one example, Germany
is home to the Wasser Berlin International trade fair and
congress.
6
...rooted in objectives securely based on economic
drivers. In fact, such objectives were not an original
feature of the six clusters assessed. But the Singapore
cluster, for instance, has now developed economic
indicators based on growth and jobs.
To investigate further, see Evidence Paper 5.
7
... built on existing networks and/or trade
organisations. This can help to ensure all stakeholders
are included and can encourage collaboration. Both the
German cluster and the Dutch cluster work closely with
their respective national water associations.
8
... strengthened by a facilitator acting as an
intermediary between suppliers and end-users of
new technologies. For example, a facilitator has helped to
focus the Milwaukee cluster on driving exports.
9
... characterised by a pragmatic approach to
Intellectual Property (IP). This can stimulate
innovation and maximise its exploitation. In Singapore,
IP stays with the commercial entity even where public
money has been secured; Singapore has the first call on
any application.
10
... given access to national test facilities. This will
facilitate demonstration of innovative technologies
by the companies developing them. In Israel, the NewTech
programme gives firms access to the national water
company’s facilities. They do not pay for this access, but
the utility pays a reduced price for the first commercial
installation of the assessed technology.
11
...based at a single, physical campus. Containing
high-tech core facilities for shared use, this campus
will act as a focal point for activity and a stimulus to
innovation. For example, opened in September 2013,
Milwaukee’s Global Water Center houses research
facilities for universities and established companies, plus
‘accelerator’ space for emerging firms.
12
...supported by financial incentives. These can be
vital in encouraging the inward investment needed
to help a cluster to flourish. In Singapore and Israel, for
instance, government-led tax incentives are in place to
achieve this objective.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
25
Israel’s NewTech cluster
Experienced 2ndtime entrepreneurs
Technology incubators
Government
University graduates of
water-related studies
Multinational companies
co-operation
Israeli water technology
companies
Human capital
Supporting environment
Immigration
VC community
Technological convergence
Cultural elements
ICT
Water-saving
mindset
Entrepreneurship
Defence technology
Life sciences technology
Short time-tomarket approach
It Works!
It Works!
It Works!
It Works!
From ‘dying industrial centre’ to ‘water technology
Mecca’ – the remarkable transformation of
Milwaukee was highlighted by Forbes magazine
in April 2013.
Singapore’s approach to IP, combined with tax
incentives, has led to a doubling in the number of
water technology companies from 50 to around
100. It has also led to an increase in the number of
private and public R&D centres from three to 25.
Following the devastation caused by Hurricane
Sandy in 2012, the US made a direct approach
to harness the Netherlands’ flood management
expertise – an approach facilitated by the
government-to-government links previously forged
between the two countries.
In 2011, Israel signed an agreement with India to
encourage co-operation on urban water systems
– the outcome of over a decade of joint R&D and
shared investment in water technologies. Without
Israel’s water technology cluster, this would have
been much harder to achieve.
Innovation in the water sector can benefit
greatly by looking across regional and national
borders to find collaboration partners that provide
new insights, perspectives and opportunities.
Robert Schröder, Policy Officer*, DG Environment, European Commission
* Policy Officer responsible for the European Innovation Partnership for Water (EIP Water), which has brought together stakeholders and innovators from
across Europe to boost opportunities in the water sector. See www.eip-water.eu
26
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Pinpointing Potential:
Appropriate Target Markets
The world is brimming with opportunities for innovative water technologies.
So in which fields is the UK best placed to compete successfully?
Globally, innovation is gathering pace
Acoustic treatment
using ultrasound to remove particulates from water.
Adsorption
through materials such as activated carbon for water and
wastewater treatment.
Advanced oxidation processes and
supercritical water oxidation
for the removal of organic contaminants.
Aeration
in sewage treatment and water after-treatment.
Aquaporins
for use in water treatment.
Biotechnology, bioengineering, biomimicry
and gene-based pathogen removal
including biological treatment of wastewater through the use of
engineered reed-beds, for instance.
Ceramic membranes
typically for industrial water but now also trialled for
domestic water.
Coagulation/settling/flotation processes
for both chemical and non-chemical treatment.
Condensation approaches
for lower energy use and optimised purification.
De-aeration
for industrial applications.
Electro-chemical treatment
including ion exchange, capacitive deionisation and
electrodeionisation.
Heat treatment
of water and wastewater.
Hydrogen/bacteria/algae power plants
for energy generation.
Macrofiltration
to improve the efficiency of treatment processes.
Membrane filtration
especially to reduce energy intensity and minimise
membrane fouling.
Nanotechnology
for a range of water treatment and other applications.
Sensors, monitors and control systems
to increase effectiveness of sustainable water infrastructure
management and to provide demand management tools.
Thermal hydrolysis
for energy recovery.
Ultra-violet treatment
including the use of light-emitting diodes (LEDs) to cut energy
demand.
Vapour exchange distillation
for desalination.
Waste heat recovery/utilisation technologies
for cutting treatment processes’ energy needs.
Water harvesting and water recovery
to maximise beneficial use of water resources.
List based primarily on a BlueTech Research survey of client demand and a Cambridge Intellectual Property survey of the intensity of patent applications.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
27
Some markets are unattractive to the UK...
...but others offer massive potential
In certain markets that are already far advanced, efforts
to scale up the UK’s presence are unlikely to produce
significant results in heightening competitiveness and
boosting commercial success. Three primary examples
are:
If the UK is to enhance its position in international
markets, it is vital to pinpoint exactly where a boost to our
competitive capabilities could pay the biggest dividends.
Our track record in managing (and maximising the value
of) ageing water infrastructure makes this one obvious
area where we are ahead of the game and well positioned
to secure a dominant global role. But the eight areas
summarised on page 28 – where market pull is already
driving innovation – also offer particular scope for success.
•membrane filtration: a market characterised by
intensity of IP protection and fierce competition,
with established players from Germany and Japan
now facing a stern test from China and Singapore
• c hemical treatment: a market dominated by specialists
from the US, Germany and other countries, with new
players from Asia representing a growing force
•desalination: a market dominated by companies
that specialise in developing complete systems
for countries where they have longstanding
relationships.
FACT FOR
THOUGHT
Tens of billions of dollars are
expected to be invested in
water systems worldwide
over the next decade.
Botryococcus braunii (an algal species for biofuel production) leaking hydrocarbons. Reproduced with permission from Gordon Beakes.
28
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Eight key growth markets
Smarter systems and software for domestic
metering and network monitoring
With vast potential to transform the way water and wastewater are
managed, smart water is the sector’s most dramatic growth area.
Major opportunities include network monitoring and smart grids
that link metering and monitoring.
Urban water management SUDS, greywater recovery and rainwater harvesting offer
major scope for growth – and not just in new-builds and new
developments. The big social and economic benefits that these
technologies can deliver are a key driver of innovation in this field.
Low-energy treatment and better
process efficiency
Ultrapure water, wastewater treatment and optimisation of asset
life/performance – these are just some areas where the need to do
more for less is stimulating the search for innovative solutions.
Flood security
From water mapping and monitoring to the need for flexible flood
protection barriers, the quest for better ways of reducing the risk
and impact of flooding is acquiring increasing urgency.
Wastewater reuse Deriving value from wastewater through energy and nutrient
recovery and water recycling will lie at the heart of sustainable
utility management in the decades ahead.
Fracking
Recovery of shale gas via fracking – although controversial – is set
to stay on the agenda for the foreseeable future. Environmental
standards, impact mitigation, leakage management and water
treatment/re-use are likely to generate significant opportunities for
innovation.
Dry sanitation
This is a key issue for cities in developing economies where there
is a pressing need for approaches that generate zero or minimal
wastewater.
Megacities
By 2025, 800 million people worldwide will be living in cities of
over 5 million inhabitants. This will create unprecedented demand
for a whole array of innovations, such as sewage treatment
techniques suited to densely populated areas.
Regional needs, specific priorities
•In the EU market, the current emphasis is on the Water
Framework Directive (2015-27), the Groundwater
Framework Directive (2015-27), the revised Bathing
Water Directive (2015 onwards) and new measures
addressing chemicals in water.
•Across OECD countries, the emphasis is on more
advanced systems, sustainable water management
and doing more for less. There is also a need to
optimise the operating life and performance of ageing
infrastructure.
• T
he BRIC countries are characterised by the priority
of urbanisation and development issues, especially
the need to mitigate pollution and extend/modernise
infrastructure.
•In developing economies, the key need is to
implement the United Nations’ post-2015 Millennium
Development Goals. This involves ensuring universal
access to safe water and sanitation by 2030-50 and
developing appropriate systems for dealing with
urban sewage.
To investigate further, see Evidence Paper 6.
KEY
MESSAGE
Boosting our capabilities in water technology innovation
can help the UK to break into major growth markets.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
29
Delivering the Vision: An Action Plan to Make It Happen To grasp the opportunities, swift action is essential. Only timely and decisive
implementation of a coherent, multi-faceted, fully integrated plan can deliver
our fresh vision for UK water technology.
1
Our four-point plan of action
Strengthen the publicprivate UKWRIP
Aim: To establish a coherent, unified
voice capable of leading forward the UK
water technology sector internationally
and providing an overall co-ordinated
strategy.
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Create a sharp focus on
commercial opportunities
and customer needs
Aim: To ensure that these drive forward
water technology research, innovation
and exploitation in the UK.
Appoint an executive team supported by a nonexecutive board
A not-for-profit company (‘the Partnership’) will
establish an executive team to undertake market and
opportunity analysis identifying the UK’s priority research,
development and commercialisation areas. The executive
team will be supported by a non-executive board
appointed from relevant stakeholders, to provide strategic
direction and leadership with a clear business plan for
actions and deliverables. Our aim is to have an executive
team and non-executive board in place within 12 months
of this report’s launch. They will draw in various waterrelated initiatives across the UK and focus them towards
common outcomes and on supporting companies across
the innovation cycle.
Nurture a climate to stimulate innovation
The Partnership will align disparate research, funding and
corporate efforts towards clearly defined and managed
goals, with three principal themes:
Create a recognised international port of call for water
innovation in the UK
The Partnership, through its central innovation and
information hub, will provide a single port of call for
enquiries and for attracting new entrants to the sector,
including smoothing access to funding, mentoring and
market information. It will establish a global UK water
innovation brand, spreading its message in a coherent
and compelling manner.
•encouraging water-based research clusters, bringing
together academia, government and industry.
Funding will be sought from the public and private
sectors. This will be based on a short- and mediumterm business plan designed to mobilise resources
towards critical market areas and to ensure that product
development maintains its alignment with emerging
opportunities.
•implementing a UK vision for water opportunities and
organising the resources needed to deliver it. This will
enable the development of products and services
that meet rapidly changing national needs and take
advantage of the global opportunities available now
and in the future
•incentivising universities to contribute to innovation
and economic development through R&D and project
commercialisation work, along with offering more prize
opportunities
Ensure we have the research we need
Research works best when participants are regularly
informed about priorities and timings. To align basic
and applied research with longer-term commercial
opportunities, the Partnership will engage with institutes
and advise them about what these priority areas are in the
short and medium term.
Make research timely and applicable
Applied research driven by market needs (usually
funded or part-funded by industry) should be
reviewed periodically to maintain its applicability.
Poorly performing projects or those less applicable to
identified market opportunities could have their funding
called into question.
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HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
Align our interests and capabilities
Research also works best when companies join in the
development process as early as possible. SMEs also need
to be more engaged with research councils. For all, this
involves mitigating and managing the risk involved in
supporting research. The slow development and testing
times that characterise the sector and inhibit companies
and investors from getting more involved in innovation
need to be addressed.
Market opportunities will be created by the critical
interdependencies with the energy, infrastructure and
agriculture sectors. These are amongst the fastestgrowing areas of concern relating to water management.
The Partnership will also identify appropriate science and
technology to meet needs in the developing world.
Raise the profile of water opportunities with the
Technology Strategy Board
By highlighting where the market opportunities lie, the
profile of water with the TSB can be raised. A focus on
supply-chain companies, water users and exporters,
rather than utilities, will help the TSB to appreciate where
the needs are. The TSB will review the water sector and
global challenges in 2014 and will identify appropriate
actions needed to fill any gaps, using this report as a
starting point.
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Provide independent national
testing, validation and
demonstration facilities
Aim: To accelerate collaborative
innovation and catalyse its
commercialisation.
Provide national testing facilities that transform ideas
into sustainable and resilient solutions
The Partnership will co-ordinate and operate a not-forprofit test bed for innovation, including for wastewater
treatment and underground assets.
Nationally recognised testing facilities that will be in
operation for a substantial period of time can support
pilot testing of new technologies and techniques as well
as longer-term trialling to optimise innovation by finding
out how separate innovations work together most
effectively.
The purposes of these facilities will include: focusing on
existing water infrastructure needs; and providing the
opportunity for blue-sky water technology innovation.
ecognise that managing our ageing infrastructure is a
R
unique selling point
The application of smart solutions to ageing infrastructure
is shared by the rest of the world. This creates a unique
selling point for the UK in a market of huge potential.
Develop world-leading research clusters
The Partnership will encourage research clusters to
develop around these facilities. The government can help
through tax incentives and matched funding, as has been
successfully demonstrated in Singapore, with overseas
companies encouraged to use the testing facilities.
Role for the UK water utilities
Through the government and the regulators, utilities
will be encouraged to engage in the testing and
development process.
KEY
MESSAGE
Our four-point plan can transform and position the UK water
technology sector as a global innovation powerhouse.
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology UKWRIP
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Implement a co-ordinated,
focused international
marketing strategy
Aim: To develop a strategic brand
built on the UK’s unique selling
points and spearheaded by an annual
international water congress held in
this country.
Get the UK’s voice heard in the global market
The Partnership will hold an annual water conference
in the UK. This will provide an opportunity to showcase
research and its outcomes globally, as is the case in Berlin,
Amsterdam, Singapore and Israel. The event will highlight
the unified ‘UK HTechO’ approach. Government support
in the form of a ministerial keynote speech and the active
presence of other senior government representatives
is essential.
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Next steps
The immediate next step for the UK must be to develop
a costed business plan with clear actions and deliverables,
based on the main steps outlined above. Subsequent
actions will include:
1. Analysis of existing SME offerings and categorisation
into thematic clusters.
2. A ‘UK plc’ water technology conference based
around a target audience of national/international
tier 1 framework service providers/contractors (eg
Costain, Balfour Beatty, Murphy, Arup, Atkins, Mott
McDonald).
3. Establishing a not-for-profit test bed for innovation,
including for wastewater treatment and
underground assets.
Improve understanding and so achieve improved
effectiveness
Through the improved understanding about market
opportunities and research priorities, along with better
alignment of all the groups involved with water,
we can improve the efficiency of our overseas trade
missions. Effectively co-ordinated with the Foreign
& Commonwealth Office, the Department for Business,
Innovation & Skills (Science and Innovation Network)
and UK Trade & Investment (UKTI), trade missions
should focus on each market’s identified needs with
a thematic approach rather than focusing just on highvalue opportunities. For example, smart water and flood
control may stimulate interest from those involved in
sustainable cities. This will reinforce UKTI’s drive to seize
opportunities in the global sustainable cities market.
For more information contact
Faith Culshaw, UKWRIP co-ordinator,
at faith.culshaw@lwec.org.uk
Looking ahead, innovation in the water sector
should be measured, then invested in and nurtured
by one leadership body responsible for agreeing
priorities,
reporting progress annually and securing
new partnerships for innovative investments.
Tom Flood, Chair of Defra/Ofwat Innovation Leadership Group
UKWRIP is grateful to the following for their active contribution to this report:
Mark Lane UKWRIP Business and Economy Action Group Leader,
Chair of British Water and Chair of the UKTI Environment and Water
Sector Advisory Group, Consultant to Pinsent Masons LLP
Ian Bernard formerly Technical Manager, British Water
Andrew Bull Programme Director, Costain
Faith Culshaw UKWRIP Co-ordinator
Peter Drake CEO, Water Industry Forum
James Dunning CEO, Syrinix
Darren Forbes-Batey Built Environment Team, Trade Group, UKTI
Fiona Griffith General Manager, Isle Utilities Ltd
Philippa Hemmings EPSRC Theme Leader for LWEC
Hans Jensen CEO, UKWIR
Adrian MacDonald Professor of Environmental Management, University of Leeds
Alison Maydom Water Efficiency and Innovation, Defra
Philip Monaghan Founder and CEO, Infrangilis
Dan Osborn UKWRIP Champion and LWEC Interim Champion
David Lloyd Owen CEO, Envisager
Tony Rachwal Industrial Business Fellow (Water), University of Surrey
Nicki Randles Director, Andritz Group
Neil Runnalls Programme Development, NERC Water Security Knowledge Exchange
Programme (WSKEP) and Business Development Manager, Centre for Ecology
& Hydrology
Mark Smith Managing Director, WRc plc
Tom Stephenson Professor of Applied Sciences, Cranfield University
David Stuckey Professor of Biochemical Engineering, Imperial College London
Sophie Trémolet Director, Trémolet Consulting
Nick Veck Head of Strategy and External Affairs, Satellite Applications Catapult
Andrew Walker Founder and Managing Director, Blue Gold Marketing
Elizabeth Warham Head of Resilience, Government Office for Science
Dickie Whitaker Director, Financial Services Knowledge Transfer Network
Editor: Barry Hague
Consultant designer and communications adviser: Esther Maughan McLachlan
Design: Positive2
HTechO Tapping the Potential: A Fresh Vision for UK Water Technology
Any views expressed are those of UKWRIP but do not necessarily reflect those of any
individual organisations involved in UKWRIP activities, or of the individual organisations
that the contributors respectively represent.