Water tech: the flourishing Vancouver industry you’ve never heard of

Water isn’t top of mind for Vancouverites. Turn on your tap, and you’ll fill your cup from one of the three primary watersheds: the Capilano, Coquitlam, or Seymour supply area and reservoirs. The water starts as rainfall and snowmelt, and ends up in our plumbing. Simple.

Globally, it’s a different story. As the climate continues to warm and the world’s population swells, water isn’t behaving as it should. Persistent droughts now plague more than just equatorial countries – closer to home, for instance, the Colorado River has shrunk so significantly and groundwater reserves tapped so heavily that California is struggling to provide water to houses. The reverse is also true. Sweltering summers melt snowpacks faster than anticipated, causing devastating flooding – take the Abbotsford disaster last year.

With great change, however, comes great business opportunities. In its latest report, Invest Vancouver – the Metro Vancouver region’s economic development leadership service – has identified water tech as an area of untapped potential for the region.

The emerging sector, the report defines, is a loosely connected collection of 59 firms that are developing products and processes that reduce water risk. To do so, they’re using new proprietary tech, as well as sensors, the internet of things, software, and data analytics. Each works on a range of different problems – think recovering energy and nutrients from wastewater, managing stormwater, treating industrial wastewater, transforming brine, and more. There’s even a company figuring out how to retrofit your washing machine to catch microplastics.

These firms are typically small – averaging 12 employees – but for Invest Vancouver, size doesn’t matter. The organization believes that the export potential for these unique businesses, as well as others that will spring up in the cluster, represents a huge economic opportunity for the region.

Here are the five key takeaways from the report.

Testing, testing

Hidden away on Annacis island – that blink-and-you’ll-miss-it piece of land between Delta and Richmond – is the Annacis Research Centre, where companies can pilot and experiment with new technologies. It’s not the only testing centre available to local companies. The Technology Commercialization and Innovation Centre, conveniently located just down the road, also offers facilities to try out ideas. Physical spaces that allow for testing, particular in the water industry, are a rarity. Few other global cities have a robust space to work out the kinks in businesses’ proof-of-concepts, marking Metro Vancouver as unique.

Cash flows

Unlike nearly every tech vertical – yes, we said it – many water tech firms are able to start generating revenue very early in their development. By turning a profit fast, companies can avoid the hurdle of pitching for venture capital and have access to more traditional forms of financing, such as bank loans. Add to that the fact that Canada has a very generous funding and grant system for research and development, including the Scientific Research and Experimental Development (SR&ED) tax incentive, plus other cleantech supports, and Vancouver starts to look like an attractive option to set up shop.

Oil and water

Oil, forestry, and mining – Vancouver’s economy has, in the past, been built on the foundation of extracting natural resources. The majority of local water tech companies offer solutions for wastewater treatment, and few industries produce waste like the resource economy. Despite a global desire to shift to green, fossil fuel extraction and processing won’t disappear soon. Clean technologies also require some not-so-desirable inputs to operate, such as mining lithium for batteries, which still requires its wastewater to be treated. With its rich history in extractive industries, Vancouver offers a flood of expertise that is transferable to the water tech sector.

Putting a damper on proceedings

It’s not all good news, however. Creating a cluster requires cohesion, but the water tech industry lacks commonality. While there are many companies working on, for example, wastewater, each serves a different target market, sector, and application. As a result, water tech companies operate in silos, where strong players in the region are not united with up-and-coming businesses to share expertise and best practices. If local authorities were to support the creation of a shared identity and clustering, the report suggests, the water tech sector could become an economic driver for the region.

Moving forward

How can Vancouver help create that cluster? Through a BC Clean Tech Concierge program, Invest Vanacouver says. The BC government would create an office to act as a champion, conduit, and primary point of contact for cleantech firms and the supporting ecosystem. The program would connect players in the ecosystem – think university incubation programs, accelerators, and companies – with the right person in government to ask about issues including procurement, regulation, policy, and more.

“The local water tech sector is poised for growth and could put our regional economy at the forefront of this rapidly expanding global industry,” said Jacquie Griffiths, president of Invest Vancouver, in a statement. “What is most striking is that despite the lack of a concerted effort in building a water technology cluster, the beginnings of one seems to be developing here organically. Because water-related risks are an increasing global concern, there is an export opportunity for Metro Vancouver solutions that address these problems, which would support a growing cluster with well-paid cleantech jobs.”