Life at MIT Sloan has certainly changed for us "Water Gods" (aka water study tour organizers) since we returned home from our trip to Asia two weeks ago.
The five organizers - Pat Flynn, Ed Fish, Jamie Fordyce, Chi-Chu Tschang, and I - had not previously experienced MIT Sloan without the water study tour. We dreamed up the idea of the tour during the second week of school, and spent hundreds of hours over the past seven months turning our dream into reality. Most weekends were filled with at least one 2-4 hour organizer meeting, and weeks consisted of many phone calls, meetings, and piles of emails with our professors, participants, and company hosts in Asia. For me personally, the time commitment meant sacrificing many nights out with my classmates, quality time with my girlfriend, and study time during the intense core semester.
Looking back, I can confidently say that what we accomplished made it all worthwhile.
In many ways, this study tour is what MIT is all about. It was an experience in action learning, something MIT cherishes. It required a helping of MIT's entrepreneurial spirit to create a class and trip on a subject never before explored at Sloan. It embodied the "Mens et Manus" ethos of our institute, as our participants created final reports that outlined opportunities to both make money and solve real problems in the water sector. And finally, we focused on a timely, complex, critical issue that allowed us to look for ways to live up to Sloan's mission of "developing principled, innovative leaders that improve the world."
Also, more than any other experience at Sloan, the study tour has made me feel so proud to be part of such a smart, diverse, and intellectually curious group of people. The hours we spent in planes, trains, and buses gave us a chance to sit next to classmates we don't typically interact with at school, and learn about their backgrounds in law, real estate, civil engineering, public health, investment banking, and public policy (to name a few). During every company visit in Asia, our group could always be counted on to listen respectfully to company executives, ask poignant questions, and represent the MIT Sloan brand extremely well. And following these visits, I found it fascinating to be able to digest findings from the meeting through the different lenses our classmates, with their breadth of experience, embody.
I was also humbled by how powerful the MIT brand really is, even in a place as far away as China. To set up many of our company visits in China and Singapore, we were forced to cold call or email many company executives. I strongly believe that one of the major reasons we received so many responses to these calls and emails is because of the fact that we were from MIT. And during our trip, it was flattering to be constantly reminded by our tour guides and company hosts that MIT was one of the best schools in the world. More than ever, I feel extremely priviledged to be part of such a respected institution.
For all of these reasons, I'm so happy that we embarked on this journey over the last seven months, and I know I'm going to miss working on this project. Most of all, I'm going to miss seeing the other organizers and trip participants on a regular basis and deepening my knowledge of the incredibly-interesting water sector.
But enough of that soft stuff. What did I actually learn about the water sector that I will take with me in the future? Well, I've become very hopeful about the many tools we can employ to make sure water scarcity doesn't compromise the health and economic growth of places like the US, Singapore, and China. Here are a few examples of the tools at our disposal to prevent supply-demand imbalances:
-Full cost-recovery pricing: pricing water based on its true worth and cost to clean and transport will result in the following:
- Per-capital demand for water by manufacturers, farmers, and households will be reduced
- Alternative, less water-intensive sources of energy, such as solar and wind, will become more economically appealing
- Water utilies will be able to cover their operating and capital costs, which will allow them to properly maintain their water infrastructure assets. This will also allow utilities to reduce leakage throughout the water system and therefore increase water supply to final consumers.
- Higher water prices are also necessary if utilities want to fund infrastructure extensions to, and subsidies for, poor neighborhoods in cities in developing nations.
-Water rights trading: a form of pricing, water rights trading requires that users of water in certain industries (e.g. agriculture, real estate) purchase and trade permits with others in the industry. The total number of permits is fixed based on the available quantity of water in a given region. This scheme allows water to be allocated to its most productive uses, and has worked extremely well to prevent water shortages in places such as the Murray-Darling basin in Australia (agricultural sector) and in the US Southwest (real estate sector).
-Desalination: desal seems to a very promising solution to mitigate water scarcity in coastal cities. Desal technologies are already being used in water-scarce regions, such as Singapore and the Middle East, as part of a suite of water supply solutions. Continued technological innovations should make desalination less energy-intensive, and therefore more cost-effective, in perhaps 5-10 years' time.
-Wastewater reuse: cheaper than desal, wastewater re-use is the way of the future in water supply in my opinion. The technology to make wastewater safe for drinking is already available, and re-use allows regions to effectively increase their supply of water and reduce withdrawals from other sources. We already have several success stories: Singapore and Orange County, CA are two of the most notable examples. Moreover, wastewater re-use holds tremendous promise for the industrial sector as well, and firms like GE and Nalco are well-placed to help clients re-use water at mines, oil fields, factories, hotels, and residential buildings.
I can't wait to create more opportunities next year for MIT Sloan to deepen its commitment to the water sector. In the meantime, I offer thanks to all of the MIT faculty, staff, and students that made this first foray into the water space so successful and exciting!!!