Potential of water business

Currently I am having a discussion session with a couple of friends on every Sunday evening in Beijing. Every week one of us propose one theme in turn and take a responsibility of a lead of the argument.

So far we have discussed; 1) the geopolitical struggles related to an up stream part of the Indus river among Pakistan, China and India, 2) territorial matters of South China sea, and 3) potential of water business in case of IBM. (By the way the next topic should be about a cultural matter and will supposed to be more on artistic side. It is all random!)

I note down here one piece of what we talked so I can digest what I have learned through the words of others.

What is the "water business".

Experts prospect a market size of "water business" would expand as enormous as 1.11 trillion yen in 2025, whereas it is said 0.6 trillion yen in 2005. What is, however, the "water business" in a detailed context?

Although pet-bottles that you usually pick up and drink in a kiosk seemingly can be called "water business", in most of the case it indicates whole infrastructural process of water supply. Veolia Environnement, for instance, a world largest multinational water business firm all covers from building sewage plants to water usage management.

At the moment top three ex-public companies dominate two third of the current market and are outspreading their influence to the rest of the pie.

Who is the new comers?

However, seeking the big opportunity, companies from the other industries also break into this market. IBM, an old age IT giant is one good example. By utilizing a smart glide technology to the water stream calculation, it entered the market. It already succeeded in pilot test in Vatican and is negotiating with the other countries.

Why Mr.outsider of IBM can enter this market? It is because, if you break down the 1.11 trillion yen market into three parts, the largest pie, which is nearly 1 trillion, would be an operational control of water process. Put simply, technologies IBM posses obviously a strong advantage of this part.

Only two ways: use effectively or create new.

Drinkable water supply in the earth is quite limited. Only 0.8% of 1.4 billion km3 is drinkable, and most of them are unextractable since it is exist as glaciers.

More worse, rapid economic growth of developing countries increase the need of water, and expected one billion of people will be face with a shortage of water in 2050. By avoiding this problem, human beings only have two ways: use effectively or create new. The engagement of IBM is the former, and well-known Singapore's trial to create water from salty water is the later. Can somebody crumple up "water barron oligopoly" and take hold of the future hegemony?

Reference:
我が国水ビジネス・水関連技術の国際展開に向けて
我が国水ビジネス・水関連技術の国際展開に向けて −「水資源政策研究 ...
大和総研 / 中国における水ビジネス市場〜その市場特性と市場規模〜
Veolia Environnement - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/veolia_environnement