Innovation in water: Why 2021 will be the turning point

Ofwat’s John Russell explains why he believes the next 12 months will see the water sector fully embrace new ways of working which foster innovation and collaboration.

The recent publication of the UK’s 2050 Water Innovation Strategy was an exciting moment for the water industry. It came at a time when the whole sector was having to step up to deliver innovative and agile responses to the pandemic. We have seen what the sector can do, but we will need to super-charge our efforts to deal with the big challenges we all face. The sector has a lot further to go to build the partnerships both big and small that are needed to drive transformational change.

We are now at a pivotal point in the sector’s history and its future. As we enter a new year and – I think we can all agree – gladly leave 2020 well and truly behind us, I believe 2021 will be the year of innovation for the water industry. It will be a year that will see the sector fully embrace a new way of working that encourages an abundance of open collaboration and helps to drive transformational change that benefits not just customers, but wider society and the environment. The sector strategy is a key part of that journey, helping kickstart our ambition alongside Ofwat’s Innovation Fund and other innovation initiatives.

The challenge

As a sector, we have long wrestled with how to solve the big and complex issues that now demand urgent responses. Innovation, in all its forms, will be a vital part of the solution. The 2030 routemap Water UK set out last month detailed solutions on how the sector can reduce its carbon emissions, and innovation is one of the main ways to further that ambition. Equally, improving the ecological status of our water environments and making ourselves more resilient to risks can be unlocked through collaborative working, innovating together in partnership with other organisations.

This isn’t just the need for new technologies and infrastructure, but an opportunity to pioneer new processes, partnerships and ways of thinking that have not yet been fully explored in the water sector. We also can’t overlook the opportunities presented by digital and open data. It is already being used for the greater good in other sectors, helping vulnerable customers as well as others. In fact, in financial services, open banking has even been used to create solutions that protect those with dementia or mental health problems from fraud. Could open data be used in the water sector to encourage new business models and service offerings that also benefit vulnerable customers?

It’s now the water sector’s turn to explore the possibilities of new, digital concepts and find innovative ways to address the major challenges we face. Ofwat’s water innovation competitions, which we’ll be running in partnership with Nesta Challenges, Arup and Isle Utilities, will be central to achieving this next year.

Enabling this change

Our £200 million Innovation Fund will launch in early 2021 to grow the water sector’s capacity to innovate. It will include the inaugural £2 million Innovation in Water Challenge (IWC), opening for entries on 18 January and a second, larger competition opening in the Spring which water companies and their partners can enter. Up to £250,000 in funding is available per winning entry for the IWC.

We believe collaboration and partnership both within and outside the sector will be essential to the success of the IWC – as it will be to the wider vision of the sector – and so we’re expecting water companies to seek out innovators and third parties, and want to encourage innovators in finding water company partners.

I recognise that matchmaking between water companies and innovators has not always been straightforward, but the truth is that innovation can sometimes come from unlikely sources. To help enable these partnerships, our delivery partners will be running a series of events where organisations – retailers, academia, supply chain, innovators or others – can meet water companies and discover shared challenges and shared goals.

We hope the competitions will also lead to new and long-lasting partnerships and culture change that live beyond these initiatives. And as we move towards opening our main competition in spring next year – with a prize pot of £40 million – some of those relationships will need to develop even further.

While this might feel like unchartered waters for many, unlikely partnerships can drive highly innovative approaches. For example, in the car manufacturing industry, Toyota partnered with Pizza Hut to test self-driving cars with the logistics of a delivery service. This was a significant step-change, showing a company exploring new partnerships outside of its normal market.

Our long-term vision

2021 is undoubtedly going to see some significant developments in the water industry as we work together towards transformational change. We expect to run different rounds of these competitions until 2025, but our goal is that the Innovation Fund’s impact will continue well beyond this – helping the sector in its ambitions to reach net-zero emissions and tackle climate change, offering customers more affordable solutions and better value for money, and reducing the damage of sewage leaks and pollution of our waterways.

These competitions work in tandem with the wider 2050 Water Innovation Strategy. The strategy, the Water UK net zero route-map and the challenge statements that the industry has created as part of this will be valuable resources for entrants to the competitions who need specific information on the problems and solutions that the sector needs. Yet, we have the potential to transform our sector way before 2050 – through the competitions, but also through creative and open thinking, collaboration, and being open to a new way of working.

It’s going to be an exciting year ahead and I, for one, can’t wait to see the innovations and ideas coming through.

Find out more about each competition here.