The following article is based on the ideas of Philadelphia Water, the William Penn Foundation, and Dreamit Health.
Green stormwater infrastructure is in the infancy stage of developing new technologies to support the industry. So how do we spur innovation to support the field? One option is to follow in the footsteps of other industries, such as healthcare, and utilize a business accelerator model. What are the merits of this approach? What are the unmet needs in the industry? What are the challenges to supporting startups? And what are alternative models for encouraging new business development?
What are business accelerators?
Business accelerators identify problems or needs in a certain industry and work to find entrepreneurs and inventors with complementary business and technology solutions. While not exactly Shark Tank, a business accelerator seeks business ideas that might succeed and weeds out those that are unsuccessful or unmarketable before too much time or money has been invested.
First, the accelerators select a business idea with the most merit and potential to be applied. They then identify whether there is sufficient demand for the idea to make it profitable. Finally, they connect business teams to customers and mentors to help get the business started. In this model, companies or organizations seeking solutions pay fees and the accelerator shares a percentage of all profits.
Business accelerators have the potential to speed up the innovation process so that successful ideas can become operational earlier. This is a model that has proven successful for other industries. In the healthcare industry, Dreamit has helped over 200 companies become operational and is continuing to inspire innovation in the industry.
Could this work for the green stormwater infrastructure industry?
Over $1.5 billion will be spent on green stormwater infrastructure in Philadelphia alone to bring Green City, Clean Waters to fruition. Another $100 billion is required to upgrade stormwater infrastructure nationally. These figures only illustrate the estimated public contribution to the industry. Private investments will likely exceed these values. This means that the industry has untapped potential.
Despite the apparent purchasing power in green stormwater infrastructure, there is not much private-sector activity at the moment. A search of patents over the past three years reveals only about 400 patents mentioning stormwater or CSOs. Could the industry spark interest from entrepreneurs by creating a clearer path between startups, business accelerators, and customers, including public water utilities and cities?
There are a few ways to test the potential for innovation in the industry. A global or national competition could gauge interest in a more structured business accelerator model. The competition would offer a large prize for the best ideas and would get the research and technology communities interested in exploring solutions to issues faced in the water and stormwater industries.
An alternative is the “intrapreneurship” model. This model, essentially the R&D model, would support the creation of ideas from experts already working in utilities and create a path for commercial startups. Many utilities are informally doing something similar, including the San Francisco Utilities Commission where a team within the utility patented a new degreasing technology that could be useful to the broader green stormwater infrastructure industry and utility community.
Unmet needs in the industry
In order to solve any problem, we must first identify what the problem is. What is the “demand” that startups could address? In general, there is a need for more “plug and play” design solutions that can be implemented cheaply and quickly on a range of sites
Specifically, the top design needs among public utilities include:
- Addressing conflicts with other infrastructure is a key issue when siting and designing GSI, especially in urban areas. Utility and street crossings, residential water laterals, retaining walls, foundations, and trees can all be obstacles that drive up the price or require the re-siting of GSI. Finding innovative solutions to this issue could reduce the cost and time required to design and implement GSI.
- Utilities are also looking to manage rooftop runoff, parking lot runoff, and runoff from steep slopes in ways that would require less investment and that are easier to retrofit. Current solutions, like green roofs or blue roofs, often require a new roof structure or expensive engineering solutions.
- Utilities are looking for new approaches for harvesting and reusing rainwater. While there are current technologies that do this, utilities are looking for ways to make these technologies more accessible and scalable.
- Utilities seek to maximize dollars invested in infrastructure. One way to do this is by combining stormwater management and energy generation. Technologies that manage stormwater and generate hydroelectric power from wastewater and stormwater could help utilities maximize benefits from investments.
- Analyzing and mapping subsurface features is essential to siting GSI and identifying problems before implementation. Technologies that accelerate this process could allow utilities to complete more projects. In the same vein, identifying water quality issues with new technologies that analyze the chemical and biological content of water can inform strategies required to improve water quality.
- Finally, utilities are looking for new, cost-effective porous materials, like asphalt, pavers, and concrete. While these materials currently exist, they are often too expensive to be widely applied. Developing new materials that are more cost-effective would reduce the overall cost of implementation.
Aside from determining whether there is an interest in the private-sector, there are a few other challenges to creating a business accelerator for the green stormwater infrastructure industry.
- Many of the problems facing utilities are local. While some technologies and products could have the potential to be marketed or standardized for use by utilities across the country, there are localized problems that will require context-specific solutions. In this case, a local business incubator, training program, or loan program may be a better fit.
- Public utilities may be prevented from approving new technologies. Unlike many companies and organizations in the medical or other private industry, public utilities are subject to policies that prevent the endorsement or commitment to a particular company or proprietary product that comes out of a business accelerator. Furthermore, the lengthy process required for public projects might not allow the private sector businesses to see a rapid return on investment in new products. Even if a product hit the market tomorrow, it could take two years to get it into a construction project to test it.
Alternative models for encouraging new business development
Given the challenges associated with developing a business accelerator related to green stormwater infrastructure, there are alternative models that could be employed. These could include using the private sector or a third-party to test and approve new technologies, creating innovation hubs, or working with existing programs and organizations to support innovation.
Using the private sector to test new products could reduce potential concerns about public procurement constraints.The City of Vancouver engages a private company that runs trials on pilot projects. The city allows private companies to install and test equipment on their facilities at no cost to the city. Since it is not a capital cost to the city, public procurement standards do not have to be met. This allows utilities to implement new technologies faster and get real-time feedback on how things are working. When technologies utilized during these pilot projects are successful, the utility develops a strategy to move it through the procurement process. In the future, utilities and cities could turn this into a “pay for success” model where investors provide upfront payment and are only reimbursed if or when the utilized technologies deliver.
Innovation hubs, like the one employed by the Water Council in Milwaukee, support innovative research in new technologies. The hub convenes regional utilities, research clusters, and over 150 water technology companies to develop education programs, build partnerships, promote research, and attract creative talent in the industry. These types of programs or organizations can help bring to light new issues and ideas that the public sector may choose to push forward in the future.
Many utilities are working with existing programs and organizations to support innovation. The City of New Orleans is working with Propeller, an existing business accelerator, that is focused on products that are socially and environmentally-impactful and benefit the city’s resiliency efforts. Other organizations like the National Science Foundation I-Corps program is working to support academic researchers, student entrepreneurs, and business mentors to bring new products to the marketplace. WE&RF is working specifically on research and technology to advance the green infrastructure field with the Leaders Innovation Forum for Technology (LIFT). Collaborative efforts such as these can better articulate city needs and serve as inspiration for private sector partners.
The proliferation of programs, accelerators, and other third parties that are supporting innovation in water and stormwater technologies and products is evidence of the growing interest in this industry. Whether utilities choose to work with the private sector or business accelerators, create local or regional innovation hubs, or work with existing programs focused on innovation in the industry, we need to share ideas, needs, and resources to expand knowledge in the field to generate interest and spur innovation.