Findings from “Unlocking Innovation,” a white paper from Black & Veatch and the Singapore International Water Week (SIWW), reveal that there are five key factors to consider when developing new solutions for complex water issues. Those key issues – education, communication, collaboration, integration and investment – were highlighted in the report, which provides recommendations on how the water industry can unlock innovation to address water challenges around the world.
This is the second white paper produced by Black & Veatch and SIWW. It resulted from 27 roundtable discussions held at the Water Leaders Summit at SIWW in July 2012. These roundtable discussions were led by nine distinguished chairpersons from the water industry. The workshop saw an attendance of nearly 100 water leaders from six continents. Three key recommendations emerged from the workshop:
Educate the public on the true value of water; Connect diverse stakeholders through active collaboration; Drive integration and communication across the water industry’s sectors.
“It is clear that the water industry needs to reframe its thinking and embrace innovation at all levels,” said Cindy Wallis-Lage, President, Black & Veatch’s water business. “To solve our cities’ future water challenges, we need to be smarter about how we create policies and then plan and deliver infrastructure.”
“Adopting win-win collaborations with industry should be the way forward for government agencies looking to becoming more pro-business and service-oriented,” said Chew Men Leong, Chief Executive, PUB Singapore. “The Singapore International Water Week represents an excellent platform for us to seed such partnerships and develop solutions with the global water industry.”
Delegates were invited to share insights on innovation across three areas: Water Policy-Making, Resource Portfolio Planning and Project Delivery.
- Water Policy-Making: Innovative water policies need to address competing stakeholder interests. Innovation risks must be managed while deriving a suitable price that balances basic human rights to access clean water with the realities of costs.
- Resource Portfolio Planning: Resource management can be improved by encouraging innovation in portfolio planning. Utilities are challenged to progress from being merely service providers to progressive business entities that maximize the potential of resources.
- Project Delivery: Innovation in the business, technical and financial aspects of project delivery is vital. This should be done in an affordable manner that balances risks fairly for different stakeholders.
Holistic water policies can be accepted and implemented successfully in the right environment, through effective communication and education around a policy’s broader benefits. Key findings from the discussions include the following:
Consider integrated regional policymaking: Reframe water policies regionally instead of considering them from a national or local perspective. This corresponds with how water availability and its corresponding issues are often regionalized. It can help policymakers derive new ways to manage and approach challenges. By doing this, agencies across regions are empowered to address common challenges together.
Establish collaborative, apolitical advisory panels: Policymakers and industry need to come together on an open platform regularly to enable greater mutual understanding and consultation. Governments should engage industry early in policymaking processes to ensure policy continuity following changes in political leadership. A focus on shorter-cycle issues can also be avoided. This approach builds confidence among industry and the broader investment community.
Adopt broad environmental policies: Implementing broader environmental policies can inspire new ways to adapt to the policies and avoid costs that would have resulted otherwise. The white paper contains successful examples of how environmental policies have increased efficiencies in the water industry.
Collaborate with industry to create opportunities: Industry plays a positive role in driving innovation. Governments and industry must work hand in hand to create innovative solutions during challenging times. Oftentimes, industry can fill the gap where governments struggle. The true value of water is in diversifying the supply of resources to tailor solutions for water challenges in a rapidly changing world.
Communicate the holistic benefits of change, and educate on the value of water:Equal air time should be given to discussing both the cost and the value of water, and this needs to be clearly communicated to the public. Communications need to be two-way, and data provided must be unfiltered and transparent. It is vital for the industry to have one voice on the value of water.
Policymakers and the water industry as a whole must also prioritize education efforts around the value of water. Education is vital now and in the future, where more implementation of decentralized solutions is expected. The more decentralized systems get, the more the public needs to be involved and engaged in the planning and maintenance of these systems.
Resource Portfolio Planning
Resources are constrained. The future ability to continue to meet projected growth in demand will be constrained further. As well as applying best practices and best thinking to this challenge, water utilities and planners must communicate and manage the expectations of both the communities they serve and the communities that enable their operations.
Engage consumers by spotlighting the plan’s benefits, objectives: A conscious effort to make innovation an important and visible part of any resource portfolio plan is vital. Highlighting the innovation and its benefits draws attention to the value and impact of the overall plan. This needs to be effectively communicated to build long-term acceptance of a city’s resource planning. Challenges to acceptance can be overcome by bringing industry, financiers and the public together from planning stages for mutual consultation, understanding and buy-in.
Harmonize efficiency and resiliency in the plan: Best practice resource portfolio planning needs to focus on the resilience and efficiency of the plan. When it comes to planning water resources and sanitation, the industry must find solutions to events deemed “unplannable.” Utilities must be able to supply water and sanitation regardless of changing circumstances, such as climatic shifts or population growth. Efficiency is usually measured as a cost, and resiliency is measured as the ability to deliver services under stress. Both must be balanced.
Coping with unexpected or unmanageable population growth: Rapid population growth creates significant challenges for water resource planning and creates strains on the finite resources when it happens faster than the planned-for city expansion. It calls for greater collaboration between city planners and utility providers. More knowledge sharing within the industry on how to manage existing assets as well as broadening portfolios will also help deal with the pressures of population growth on water resources.
Integrate a business case approach: The industry is seeing a business mindset shift. This is particularly evident in the wastewater sector and includes a greater understanding about the economic benefits of water reuse, nutrient recovery and energy recovery. Municipalities need to have a better understanding of the viability of new approaches to create demand for not only sustainable water but also sustainable energy.
Collaboration creates economy-of-scope opportunities: “Economies of scope” was defined as the need to look holistically at the touch points of water with energy, food and industry. The scope must include local market and community needs, as well as the financial impacts, when assessing resource recovery opportunities. Greater integration of planning, both within the water sector and other related sectors, can create potential economies of scope.
Innovation plays a critical role in how water projects are delivered. Applying new thinking to existing models and structures can help projects overcome challenges that arise from fragmentation of responsibilities, especially on large-scale projects.
Adopt integrated delivery models: Innovative delivery practices, which include private sector financing and transference of risk, must have the right commercial model in place to fund water projects successfully. Projects must be structured to ensure that risk and delivery responsibilities are fair.
The delivery approach dovetails with the resource planning process. It should begin with planning and establishing the framework. This allows both the public and private sector to provide innovative delivery approaches to meet policy goals.
Streamline decision-making with integrated, empowered teams: When responsibility is fragmented within large projects, decision-making can often face serious challenges. Empowered and specially established program management units can play important roles. They can help streamline government decision-making processes on major challenging projects or to execute a complex project more efficiently.
Foster collaboration on large, complex projects: To overcome the complexities of large-scale projects, phase resource needs and deliverables into smaller and more digestible pieces. This can reap a number of benefits, from improved procurement to speed of delivery. Decentralizing projects and phasing them in this manner can also help attract investment.
Communicate responsibilities clearly and appropriately: Complex projects require a collaborative focus. Alignment between the owner and the business partners involved in delivery is vital. Such projects should be structured to hold all parties responsible and accountable, with key performance indicators of each party clearly defined.
Research and determine how best to invest: Project owners need to conduct their own market research and analysis to determine the right financing approach instead of relying solely on industry players. Analysis should look at the delivery models that achieve sustainable objectives for the program. This type of planning allows the public sector to look at the best way to implement project delivery innovation and risk allocation that are required to ensure the success of the program.
This article has been republished with permission by Black & Veatch. To view the original article, visit Black & Veatch's Solutions Magazine.