Like most other businesses faced with the challenges of today’s recessionary climate we recently brought our management team together to work through some scenario planning. I would recommend the exercise to anyone looking for strategic preparedness. In the course of the workshop we reviewed the overarching trends influencing the water and wastewater industry.

No matter what the economic situation the owners and managers of water infrastructure all face similar challenges. There are intersecting trends driving what happens in the market.  These trends are not going to change because of the current recessionary economic pressure on global markets. In fact it’s my view that we will now see them become more defined and more instructive .

Environment

The first trend is one of increased regulation. Around the world we see this trend gathering pace. This includes higher standards for drinking water quality and zero tolerance of waste water spills and strict monitoring requirements by the regulators.  Here is a truth: After every crisis the amount of regulation increases.  So after the dust settles on this global downturn expect a rush of regulator activity.

Security

The next is the post 9/11 concern over security of remote telemetry communications and control at water sources, treatment plants and pumping stations. This was once the domain of a few passionate souls who were almost being treated like Henny Penny, the character that claimed the sky was falling. Now it is an agenda item for most Homeland security agencies around the world. And people are beating a path to Henny Penny’s door.

Infrastructure

Thirdly our aging water infrastructure requires a steady investment. In most of the developed world water and sewerage infrastructure dates back to the years just after World War Two.  It has suffered from chronic underspend and a rapidly increasing population. There is a huge gap in what is presently allocated to be spent and the rate of spending needed. In the United States alone the estimate is a spending gap factor of ten to one.  No wonder that the rate of investment in water has been increasing in popularity.

Workforce

On top of this our workforce is changing. As people retire and exit the industry we are finding it harder to attract the number of good talent to the water business. Its not that we don’t have the talent in the new recruits – it’s that there are not enough of them.  This has focused the industry on seeking productivity outcomes. We now reward anything that lowers the capital costs and operational budgets and provides a knowledge foundation for replacement of technical staff. Even if we see an easing in the job market as a result of lay offs now that the greater part of the world is in recession the rate of growth potential for water infrastructure will soak it up quickly. Skills shortage is here to stay for some time.

Technology

The final trend that meets at the intersection point is the increasing use of low cost smart embedded devices that can be located remotely and linked using modern communication protocols.   This technology is small, full of application specific firmware, that can self-diagnose and are packed with high end communication capabilities. Plenty of multinationals like Schneider, Emerson, Siemens are putting big bets on this area but the water challenge is so great that there remains a huge opportunity for niche companies like ours to outperform the majors with highly targeted offerings.

My challenge now is to ensure I keep the company very close to the customer and these trends. I have set certain priorities for the business and one of the most important is a renewed focus on what keeps the customer awake at night. This blog is a company initiative designed to generate discussion and to share ideas. I will be keeping a close eye on the blog as it develops into a key source of communication with our customers and the community.

Wayne Patterson, CEO Industry