The $600 billion water industry boasts a sizable number of profitable large companies, according to Lux Research, which says new entrants are bringing emerging technologies that will disrupt the industry and create new opportunities.
A review of 150 companies across the value chain, representing 23 percent of the market, found average operating profit of 12.9 percent, torpedoing claims that it’s impossible to make money in the water business, Making Money in the Water Industry says. Customer-facing sectors in public service and small consumer systems do even better, clocking 14 percent profits.
Lux Research analysts also drew on a survey of more than 150 startups to map emerging technologies where new players can find ways to enter — and where established companies will find both opportunities and threats. Among the findings:
- Two areas dominate innovative company activity. A quarter of the startups focus on monitoring, forecast and control, an area that includes advanced sensors and process control. Nearly another quarter focuses on basic wastewater treatment. Other fast-moving areas include metals and organics recovery, and disinfection.
- Advanced sensors are a top technology within monitoring. Advanced sensors read key analytes sensitively, in real time, and use robust techniques suitable to opaque samples, allowing for uses like monitoring of municipal water systems to reduce leakage and non-revenue water. Companies like ANDalyze have received strong early-stage traction and startups in this space increasingly compete with larger companies like GE, Veolia and IBM Smarter Water.
- Low-energy, low-sludge systems lead paradigm change in wastewater. An important development poised to go mainstream is low-energy, low-sludge wastewater treatment. Start-ups like Biogill, Microvi and Emefcy’s Sabre have developed simpler systems that do away with traditional energy-hungry blowers and significantly reduce the sludge resulting from treatment.
The adoption of smart water network technologies such as intelligent devices and advanced IT systems will be slowed by the lack of readily available power sources, financing and other challenges that will cause the long-term transformation of the water industry to take decades, and not years, according to a by Navigant Research report.