PR - Water is the one essential resource for which there’s
no substitute, and rising demand threatens crisis. But executives and
investors aiming to harness these trends have been consistently
flummoxed by water’s fragmented business
segments, hyper-local markets, and long adoption cycles. A new report
from Lux Research cuts through the confusion by mapping and forecasting
the $522 billion “Hydrocosm”
of water-related businesses for the first time –
projecting that a new approach of “water
cultivation” characterized by efficiency,
reuse, and source diversification will be required to meet rising needs.
“By 2030, the world will use 40% more water
than today and nearly half of the world’s
population will face severe water stress,”“The world will avert crisis
by cultivating water as a durable asset rather than throwing it away as
a consumable – creating growth opportunities
in everything from oxidizing new contaminants to rehabilitating creaking
infrastructure.”
said Michael LoCascio, Senior Analyst at Lux Research and primary author
of the report.
To make sense of water’s complex landscape,
the Lux Research team interviewed 66 water experts worldwide,
inventoried all water financing transactions since 1998, built a
multivariate regression model to forecast water demand, and conducted
exhaustive secondary research including modeling revenues of more than
300 water-related companies. Report highlights include:
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Total water-related revenues stand at $522 billion in 2007: $385
billion in services, $64 billion in equipment, $9 billion in
chemicals, and $62 billion in bottled water. Approximately 14% of
total revenue derives from developing technologies and business models
poised for growth, such as the $3.3 billion desalination equipment
segment.
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Revenue will grow to $961 billion in 2020 as specific growth segments
such as zero-liquid discharge, UV disinfection, drip irrigation, and
metering and monitoring break away from the ranks.
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Investors have flocked to water technologies: Of $1.12 billion in
venture capital funding since 1998, 59% has been invested in just the
past two years. In the last 10 years, 506 water M&A events have
occurred worth $176 billion in deal value while 39 water IPOs have
raised $4.8 billion.
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A few key areas – including next-generation
desalination, waste management, energy mitigation, infrastructure
integrity, advanced oxidation, and water sourcing and transport –
dominate near-term growth opportunities.
“The technologies and business models
required to meet future water challenges are either already here or
dangerously close to commercialization,” said
Heather Landis, Lux Research Analyst. “Companies
that make wise choices have potential for rapid revenue growth.”
The 133-page report, entitled “Water
Cultivation: The Path to Profit in Meeting Water Needs,”
includes market sizes and projections for 85 water-related business
segments through 2020. It offers a concise introduction to the
technologies and business models in water as well as in-depth analysis
of the forces shaping their future outlook.
“Water Cultivation: The Path to Profit in
Meeting Water Needs” is part of the Lux Water
Intelligence service. Clients receive: 1) regular market overview
reports; 2) ongoing technology scouting reports and proprietary data
points in the weekly Lux Research Water Journal; and 3) on-demand
inquiry with Lux Research analysts. For information on how to become a
client, contact (646) 649-9582.
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