Growing up in Colorado I was always aware of drought. Through news stories of falling water tables, half-empty reservoirs, forest fires, and brown lawns I became aware very early of the risks of water overuse and mismanagement. As we look towards a global future of climate change, urbanization and increasing consumption water will continue to be a bottleneck to development and economic growth. The scale of the challenge is enormous. Appropriate technologies for water desalination, treatment, recycling and transport exist; But it is expensive to get clean water to the tap and most governments remain reluctant to pass the cost of water to end-users.
It has long been a goal of mine to build a global appreciation for the scale of the challenge, as well as a deeper understanding of possible solutions. Singapore and China were great case studies as their water systems face contrasting challenges [Singapore small, tightly managed + China huge, distributed]; yet similarly compelling stories of governments that have made the choice to take action now to mitigate risks of future water conflicts. Together they provide a window into what we can expect to see in the future of the water sector:
- Water requires long-term planning and vision (appears to be a part of the growth mindset of China/Singapore); Contracts are 20-30 years and require foresight in rapidly changing economic environments
- All-inclusive water pricing is critical to successful water system management (water treatment -> distribution -> waste water disposal)
- China/Singapore both have sufficient funds to pay for water projects, and as a result PPPs are not required; where PPPs are seen in Singapore they are designed to increase the capabilities of “local” companies with the goal of helping them win business abroad
- Private companies are most successful where they work closely with local governments (e.g., Black & Veatch in Singapore and Veolia in Changdu)
- On-site water treatment and recycling is increasingly a part of the corporate mindset (e.g., Coca-Cola, TI); Companies share best practices across geographies.
In reflecting on the experience, I am grateful for the chance to travel to Asia and see for myself how they are pushing the innovation and development curve in the water sector. The time is right for water to emerge as a major global strategic and competitive focus, and Asia will clearly be at the forefront.
Lastly, before I sign-off I would like to give a shout out to the group of Sloan students that put this tour together. As a 2nd year and two time study tour veteran I can honestly say that these trips were a highlight of my Sloan experience! There is no substitute for spending two weeks exploring an issue with fellow students that share my passions for the world, water and development. Back in Boston I am glad to see their familiar faces all around campus, and feel the type of personal connection which is rare in the busy network of business school life. You guys are awesome! I hope you don't forget me next year.