Water, the Oil of the 21st Century – Pressure is Rising

As the world welcomes its 7 billionth inhabitant the pressures on water supplies continue to rise, often ignored and underestimated. The pressures on water supply present huge challenges, but also opportunities to improve capture, conservation and management.

What is changing?

This week marked the arrival of the 7 billionth person on the planet. The discussions of the impacts of population growth focus on food, but often ignore the need for water to achieve food production, to support power supply and the production of other goods and services.  In China alone demand for water is forecast to grow by 63%, by 2030. Global demand for power is likely to grow by 50% by 2050, with one third supplied by hydropower. Pressures on water are rising.

Currently, about one third of the world’s population lives in areas of poor supply, with all the attendant health and economic development problems; rising to two thirds by 2025. Many of the countries at most severe risk of water shortages are in the Middle East, North Africa and East Asia.  Climate change and severe weather events add to vulnerability of supply, increasing the risk of short or long term drought and loss of river flow, but also damage to infrastructures. Massive growth in urbanisation – about 70% of the population will be urban by the middle of the century up from 50% now – will increase demand for sanitation, clean water, and power. But developed nations also face potentially significant shortages too.

Why is this important?

The world is thought to have adequate water supplies overall: the problems lie in poor management, inefficient use and inadequate conservation. Therein lie both the opportunities and the challenges: if we do not grasp the former, we will certainly face the latter.

China is leading the charge, investing heavily in building desalination plants and researching new technologies; and at present subsidising every gallon of water produced. By 2020 her plan is to increase the amount of water produced by desalination fourfold, to a total of 800 million gallons per day. The Chinese government sees it as an economic necessity.

A host of other developments include the use of nanotechnologies to improve water purification using solar power; a raincoat that acts as a water collector and filter; redesign of manufacturing processes to become water neutral or at least very low water loss; intelligent agriculture to monitor and manage water use in irrigation systems to best effect – to name but a few.

Some 54% of companies remain unprepared for the potential risks and consequences of water shortages.

Rising food prices are already a source of concern, and water shortages seen as a significant potential cause of conflict. But research also indicates that better water management, regulation and new technologies could enable a doubling of food production in major river basins in Africa, Asia and Latin America. What is needed is a coordinated and systematic response.

While the risks may be higher in some areas than others, developed nations are not immune.  Global supply chains ensure that exposure. Some 54% of companies remain unprepared for the potential risks and consequences of water shortages – which could be direct i.e. power cuts, increased costs and reduced profitability or actual supply critical to processes; or more indirect such as damage to reputation and brand as a result of quality issues or unreliable delivery. Food companies such as Kraft Foods Inc., Sara Lee Corp and Nestle are already increasing prices in response to these pressures; Nestle is also a leader in reducing water usage.

Water has been described as the oil of the 21st century. Until we begin to value it, manage it, conserve it and treat it in the same way, we will continue to court disaster instead of opportunity.

By Sheila Moorcroft

About the author

Sheila has over 20 years experience helping clients capitalise on change – identifying changes in their business environment, assessing the implications and responding effectively to them. As Research Director at Shaping Tomorrow she has completed many futures projects on topics as diverse as health care, telecommunications, innovation management, and premium products for clients in the public and private sectors. Sheila also writes a weekly Trend Alert to highlight changes that might affect a wide range of organisations. www.ShapingTomorrow.com