June 27, 2011 by Manishankar Prasad
Filed under Design and Tech
(This article was first published in the Green Business Times on 27/06/2011)
In an age where 1.1 billion people do not have access to clean drinking water and sanitation services, water could be a big business opportunity which small countries with a technological edge can capitalize on. One good example is Singapore, which is well positioned to act as a hub for Blue Tech and serve the Bottom of the Pyramid Hybrid Value Chain. With the massive water technology R&D undertaken by the tertiary educational institutions and the commercial ecosystem in Singapore, this ‘Tiny Red Dot’ could be the next Israel as far as Blue Tech is concerned.
Hub for Blue Tech
By the year 2030, half the world will be living in urban spaces, where the mere provision of basic amenities will be a struggle. Mumbai is the financial capital of India, but it has half its populace living in shanty-towns like Dharavi, which is Asia’s biggest slum with a population of 7 million people . Similar stories can be shared all over urban Asia. In Manila alone, 37 percent of its present population of 14 million lives in shanty towns. By 2050, the slum population in Manila is expected to reach nine million.
Water is a systemic public health issue. As it is the substrate for life itself, water can cure but it harms too if it is not potable enough to drink and may be a carrier of infections in our body. Water is also considered from the non-traditional security perspective as well because water is a matter of survival, and a potential trigger for human conflicts. Aden in Yemen will be the first ancient but modern active city to run out of groundwater completely by the year 2017.
Hence there is an eminent urgent need to ensure clean water access, which is a fundamental human right, and not a privilege. Access to clean water has been taken as a given because it is a natural endowment, but as the population crosses seven billion globally combined with the scourge of advancing climate change, clean water is becoming a novelty to get because bringing it to the taps takes resources, infrastructure, capital investment and techno-scientific expertise.
Water governance in Singapore is a globally renowned success story with the ‘Four National Taps’ water strategy. NEWater or reclaimed water has reduced Singapore’s dependence on imported water. The quality of water from the taps is of drinking water grade. This is unthinkable in other parts of Asia where vector borne diseases are common.
Singapore was awarded with the esteemed 2007 Stockholm Industry Water Award for its holistic approach to water resources management which has made water use sustainable for different sectors of society in an urban island environment . Singapore is also most probably the only country in the world which carries out such large-scale urban stormwater harvesting by using 7000 km long drainage system to direct the collected rainwater into 17 water reservoirs. The government has invested more than SGD 5 billion (USD 3.45 billion) to build water-related infrastructure over the past seven years, including four plants that recycle sewage water for homes and industries .
Singapore is the world’s largest user of membranes per capita and a pioneer in large-scale water reclamation. Singapore companies such as Hyflux and MattenPlant are exporting Blue Tech – the water technology version of clean technology to markets overseas from Algeria to Australia. Hyflux and Sembcorp is to Singapore what IKEA and SAAB is to Sweden.
Every small industrialized economy such as Finland, Belgium or Luxemburg has a particular strength in manufacturing and innovation. Singapore with its niche talent pool and with its strategic geographical location, is well positioned to become a global hub for Blue Tech serving the thirsty ASEAN region and the extended region comprising of South Asia and the Chinese speaking world.
The Bottom of the Pyramid Hybrid Value Chain
The Bottom of the Pyramid (BoP) conceptual construct was pioneered by the Late C.K Prahalad, who had written his iconic book 6 years back, providing insight on how people living on less than two dollars a day are legitimate consumers for multinational companies, and how they can create value and improve livelihoods of consumers. Hindustan Unilever and ITC e-chaupal are all creating value for the consumer and the community they serve.
The Hybrid Value Chain leverages on the strengths of business and social actors. Multinational corporations contribute to the Hybrid Value Chain with their sophisticated supply chain networks, reaching to the smallest hamlet where even the government does not have its reach in the developing world. Coca Cola has market access to the smallest communities in Sub Saharan Africa, as the local Mom n Pop storewill have a bottle of the fizzy beverage. TNT was the first respondent in the aftermath of the Aceh Tsunami and Earthquake. Multinational corporations do not reach the smallest non descript ‘kampungs’ by sending its marketing representatives, they tie up with local traders and community organizations to embed itself in the commercial landscape of the community.
A crucial component of this Hybrid Value Chain is constituted by non profits, philanthropic foundations and social enterprises. Technology as an entity is disconnected to society, without the active intervention of social actors. Bringing a technology from the wet lab to the ground should involve actors such as the anthropologist, engineer, local administrator, donor, and the research staff. Hence, a sociotechnical approach is recommended to address the water problem.
Examples of players in the water Hybrid Value Chain include social enterprises such as: Waterhealth International and Aquaya providing low cost technology to communities at a pilot scale; Grameen Veolia, a social business joint venture between the Grameen Group of Bangladesh and the French environmental services major Veolia having a tie-up to provide clean drinking water at break-even cost in the arsenic ridden country; Sarvajal, a venture of the Indian Piramal Group having a franchise model of building water service businesses in the communities it serves in western India; and the World Toilet Organization, Singapore’s very own homegrown social enterprise collaborating with other institutional players in bringing clean water and sanitation to communities in Cambodia and Thailand.
Singapore can be a hub for Blue Tech and serve the Bottom of the Pyramid Hybrid Value Chain by using its leverage in the global marketplace as a ‘connector’ linking businesses, technology providers, social enterprises, research institutions and financial backers in the water industry. Investments in Singapore’s water industry have already doubled in the last five years up from SGD 660 million in GDP value-add in 2005 .
The author would like to acknowledge Ms Shriyanka Nayak’s contribution regarding data inputs for this article. Ms Shriyanka Nayak is a recent graduate of the Environmental Engineering Program at NUS.