Note: This post is co-authored by Will Sarni (see bio below)

Last week we asked, “Is Water the Next Carbon?“. Although our short answer was “no,” we believe that managing water will become a critical business skill for the 21st century. Need drives innovation, so this week we want to highlight some of what is happening in the new markets in water.

First, even large companies are carving out new niches to help businesses and communities manage water scarcity.
For example, GE’s investment in water technologies is well known, and its leadership stems from its ecomagination portfolio of products. GE not only recognizes the critical role technology plays in addressing water scarcity, it also understands the challenging interconnection between energy and water: increasingly, the world will be needing low-energy water treatment technologies.
Another major industrial company moving to address water risk is ITT, the world’s largest supplier of pumps and systems to transport, treat, and control fluids. ITT has a stake in seeing cities and companies invest in water management, but the company is discovering a relatively low level of awareness of the need.
ITT conducted a survey titled “The Value of Water” highlighting both how much water we waste and exploring the critical gap between the current price and the real value of water. We spoke with Colin Sabol, a Vice President at ITT, about the survey and ITT’s goals.
In the US, ITT tells us, about 650 water mains break each day at a cost of $2.6 billion per year. Our crumbling infrastructure on the whole loses 1.7 trillion gallons of water per year, equal to the water use of 68 million homes. On the positive side, approximately 95 percent of individual consumers said water was the most important service they received in their home. And consumers said they’d pay more for improved water infrastructure.
The business community was another story, however. Three-quarters of corporate respondents told ITT that they take clean water for granted. As Sabol says simply, “The infrastructure is literally out of sight, underground.” That’s why ITT has a big challenge in conveying to its customers the importance of investing in its services. But if this shift in thinking happens, the business opportunities are likely to be vast.
Secondly, it is often innovators who must lead customers down new paths, showing them new ways of managing a resource and saving money that they didn’t know were possible. So in addition to large multinationals such as GE and ITT, there are a number of startups in the process of bringing new technologies to the water industry. Several of these innovators participated in recent competitions such as the annual ImagineH2O and the CleanTech Open. Both of these groups may play a crucial role in creating an ecosystem for water innovation.
This year’s ImagineH20 finalists illustrate the diversity and imagination of the entrepreneurs paying attention to the opportunities in the water industry (here is a sample of these innovators — you’ll see a couple themes, including capturing wasted energy in the water system).

• Agua Via developed a nanotech membrane that enables desalination at a 66 percent energy reduction and 50 percent cost reduction, providing energy efficient purification and wastewater remediation.
• BlackGold Biofuels recovers energy from wastewater streams, creating lucrative renewable energy assets from pollution liabilities.
• FogBusters treats petroleum, biofuel and food processing wastewater “better, faster, cheaper, cleaner and greener” while capturing the FOG (fat, oil and grease) to make into biodiesel.
• NLine Energy, Inc. converts wasted energy found in water transmission and distribution systems into renewable energy.
• Puralytics, winner of this year’s CleanTech Open, uses photochemical processes work to break down or remove contaminants from water.
• Water Resources Management Co. helps water utilities realize the full benefits of their investments in advanced meter reading, system control and asset management.

To get a sense of what companies are doing about water, check out these and other ImagineH2O finalists as well as the work of ITT and GE — they all highlight the exciting business opportunities and challenges in the water industry. It’s a space worth watching as these challenges are expected to become more pressing in the coming years.
Guest co-blogger Will Sarni is a director with Deloitte Consulting LLP and leads Enterprise Water Strategy for Deloitte’s Sustainability Services. He is an internationally recognized thought leader on sustainability and is the author of the upcoming book Corporate Water Strategies (Earthscan).
(This post first appeared at Harvard Business Online.)
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