Jeffrey Immelt, CEO of General Electric (GE), announced that the company plans on increasing its R&D spending on water technologies by 50% in the next two to three years. As part of its intensive focus on water, the company is also building a $108 million water research hub in Singapore in conjunction with the nation-state’s Public Utility Board. The heightened interest in water, no doubt, is because of simple supply-demand imbalances manifested throughout the world – but particularly acute in Singapore, the Middle East, Australia, China and elsewhere. These imbalances are driving the need for more advanced methods of providing drinking water, including desalination and water recycling, as well as treating waste water.
The ramifications of GE’s announcement will ripple quickly throughout the hydrocosm. Many existing water companies, venture capital firms and start-ups proclaim that the historically sleepy water sector is quickly morphing into an exciting growth opportunity on the back of major secular drivers. As a leading industrial conglomerate known for shrewd investments in technology sectors, GE’s proclamation provides all companies operating in the water sector newfound credibility that may lift valuations, and could draw more companies and VCs into the fray. Also, expect GE’s many competitors, including Siemens, ITT, Dow, Veolia and GLV, to respond by increasing their own R&D spending and stepping up acquisition activity to remain competitive.
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