When you can stroll over to a tap whenever you like and help yourself to a glass of clear, cool water, it is hard to believe that one of the biggest business opportunities of the 21st century, and one of the best opportunities for business to give back to society, lies in supplying fresh water.
But global demand for water has grown sixfold over the past century, while the population has quadrupled. If this trend continues, our current resources and infrastructure will not be sufficient to supply enough water to meet demand. While the global water industry is diversified and, in terms of committed capital, ranks on par with the oil, gas and electricity industries, it has not attracted much private investment. It’s time for entrepreneurs and business leaders to get involved, because finding creative solutions to these challenges will require not just great political leadership and innovative research, but a transformation of business itself.
Richard Branson, chairman, Virgin Atlantic. Photo: Getty Images/AFP
The perception of plenty is only an illusion: Most of the earth’s fresh water is frozen in the polar icecaps, trapped in the soil or in deep, inaccessible underground lakes; only 1% of all fresh water is available for people to drink and use. For the most part, the water sources we rely on—lakes, rivers, reservoirs and underground—are renewed by rain and snowfall. Our use should be sustainable in theory, but in some cases, we have already crossed the line and are depleting these sources. The United Nations estimates that by 2050, more than 60% of the world’s population will lack fresh water for drinking and cooking.
If you are an entrepreneur hoping to make a difference in your community or society, this is a sector you should consider. With so many people in need, and different challenges facing every region, there are limitless possibilities for innovation: new and better means of supply, delivery, recycling and treatment. The related area of water conservation touches on every aspect of life, from how people brew their morning tea to how companies manufacture goods.
Entrants to the market can take the long view when planning their strategy—we can be confident that there will be demand for new, efficient water-delivery products for a long time to come. According to current industry estimates, the sector is currently worth about $450 billion (Rs 22.23 trillion) in revenue per year. With China and India growing fast, worldwide expenditure on this resource is likely to rise over the next 25 years to around $1 trillion per year, according to our analysis at Virgin.
One of the challenges is finding a pay model that allows a company to deliver water at a minimal cost or free. Fortunately, there is a long history of public-private partnerships in this sector. Consider the model set up by Vestergaard Frandsen, the Swiss manufacturer of LifeStraw, an innovative filter that makes even the filthiest water drinkable. Working in collaboration with the Kenyan government, Vestergaard Frandsen is providing four million people with free water filters large enough for entire families to use, along with mosquito nets and AIDS tests. The company is also replacing the filters free of charge when they wear out—about every three years. Since the LifeStraw recipients would ordinarily boil their water, causing pollution and releasing carbon into the atmosphere, Vestergaard Frandsen is receiving carbon credits, which it then sells to polluters.
At Virgin, we have dipped a toe in the water (excuse the pun) through our Green Fund, by backing Seven Seas Water, a desalination business that designs, constructs, installs and operates water plants across the Caribbean and the Americas. Our goal is to produce a low-cost, safe and reliable water supply.
Desalination is just one niche of the water industry, but, like many other areas, it offers limitless opportunities for innovation, since many technologies currently in use are outdated and inefficient. Not long ago, the energy costs of producing fresh water from saltwater outweighed the benefits. While technological advances have changed this, desalination companies are still continually competing to develop more economical, energy-saving processes.
This drive for efficiency is important for all businesses, in every industry. If our companies are going to continue to expand and thrive, we must also learn to live within our planet’s means. To get started, look at every process in your business and ask: how can we conserve, reuse and recycle? You will not only reduce your carbon and water footprints, but you will probably save money.
It is time for us to find a new way to create wealth while preserving the planet. Economic growth should mean that there is enough clean air, fresh water and food for all. Change on this scale requires all of us to get involved. What’s your solution?
By NYT Syndicate
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog
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