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TRENDS IN THE U.S. WATER MARKET SHAPING TECHNOLOGY INNOVATION
Citation:
Patel, A. AND S. Haji. TRENDS IN THE U.S. WATER MARKET SHAPING TECHNOLOGY INNOVATION. U.S. Environmental Protection Agency, Office of Research and Development, National Center for Environmental Assessment, Washington, DC, 2012.
Impact/Purpose:
To inform the public.
Description:
The US water market—and the new technologies that will increasingly define its growth—are entering a new era. Increased scarcity, new regulatory imperatives, public discontent over caustic treatments and practices, and the decline of the design-bid-build model (through which major infrastructure firms control supply chain) are all serving to accelerate innovation in water technologies. While venture capital has historically been slow to flow to water ventures (representing only 2-3% of total venture dollars invested in clean technologies), this is beginning to change. Global venture capital within the water sector rose to $258 million in 2011, and accounts for nearly 5% of total investment thus far in 2012, and mergers and acquisition (M&A) activity reached a historic high of $16.2 billion in 2011. The overall US water market for equipment and related services reached $82 billion in 2011 (returning to 2008 levels), and is projected to grow at a mild-but-steady 4% compound annual growth rate (CAGR) to reach $100 billion by 2016. Starting in 2013, the increasing demand generated by regulatory necessity (e.g., consent decrees), water scarcity, and failing infrastructure will supplant the expired stimulus and lead to 5-6% growth through 2016. The present day $82 billion estimate comprises both the (i) utility segment—including capital expenditures ($34 billion) and operating costs ($46 billion)—as well as (ii) the industrial segment ($3 billion). Total services in 2011 (including both capitalized professional and contracted services) amount to nearly $24 billion (or approximately 30% of the total market). Roughly 45% of the utility market concerns drinking water, with the remainder related to wastewater. Specifically, drinking water accounts for $36 billion in 2011 (growing at 4.7% annually); conversely, wastewater spending amounts to $44 billion (growing at 3.0% annually). This higher growth in drinking water is primarily driven b