Addressing the need for access to safe and affordable drinking water is an acute global challenge, and one which will become more pressing as the world population grows and gravitates toward urban centers from rural areas.

The problem

Today, more than two billion people—27 percent of the world population—lack access to safe water. Of these, 780 million do not have access to improved water sources, like household taps, public standpipes, boreholes, protected wells, or rainwater collection systems, that produce safe drinking water. The rest do have access to one or more of these sources, yet the water available from them is not safe for consumption.

Nearly all of the two billion people live in emerging markets and under-developed parts of the world—namely in Asia and sub-Saharan Africa. In fact, 10 countries are home to two thirds of the global population without access to improved drinking water sources: China, India, Nigeria, Ethiopia, Indonesia, the Democratic Republic of the Congo, Bangladesh, Tanzania, Sudan and Kenya. In these countries, growing populations and access to improved drinking water sources compound current challenges to providing safe drinking water for their citizens. Their urban populations are expected to grow by 70 percent by 2030 while water usage is expected to rise by 50 percent. Meanwhile, 40 percent of the poorest urban dwellers will not have access to safe water sources if the status quo for developing infrastructure and services is maintained.

Why is this a problem? Because poor water, sanitation and hygiene solutions are a major cause of preventable deaths and short-term health effects. Microbial contaminants—the most common and widespread health risk associated with unsafe drinking-water—are attributable to more than 2.5 million deaths each year, with diarrhoeal diseases being responsible for more than 80 percent of these deaths. Cholera and schistosomiasis are also significant global health threats that result from the presence of viruses, bacteria and parasites in drinking water sources. Chemical contaminants, meanwhile, are a less frequent source of water-related health problems, but they tend to cause longer term issues, like skeletal damage and cancer.

The consequences of two billion people living without safe water go far beyond health problems. There are also significant negative socio-economic impacts: women spend more than 40 billion labor hours each year fetching water that is ultimately unsafe to consume; frequently sick and malnourished children miss more than 440 million school days annually; and water disputes afflict individuals, communities and states alike.

Solutions and stop-gap measures

Water purification solution types

There are four primary methods for delivering safe and affordable drinking water in use today: pipes and taps; plants and kiosks; devices and flasks; and pumping and harvesting. Which method is used in a particular area depends on the area’s population and level of water pollution. The higher the population density, the more economic sense it makes to invest in collective treatment and distribution infrastructure. Meanwhile, the more polluted the water, the more expensive it is to treat, which directly affects the final price consumers will pay for water.

The most expensive and complex water treatment method is building piped water distribution networks to transport treated water directly into homes or public standpipes. This level of infrastructure often only makes economic sense in dense urban centers where significant economies of scale can be achieved as treatment and distribution needs change. In smaller cities and towns where water requires limited treatment, smaller-scale systems run by mini-utilities and even independent entrepreneurs are a less costly alternative.

In towns and disconnected urban subdivisions with highly contaminated or brackish water—both of which require intense treatment solutions—mini treatment plants and distribution kiosks are a viable option. Most of these are run by entrepreneurs, often in partnership with regional and local government authorities. By contrast, filtration devices or consumable disinfectants, like chlorine, are cost-effective solutions in small towns or villages with low-level water contamination.

Lastly, in places with low population densities where ground and rainwater sources are generally clean, governments and NGOs tend to promote pumping and harvesting methods, like installing pumps in protected wells and building rainwater harvesting cisterns.

Market opportunities

People without access to affordable, safe water sources collectively spend billions of dollars each year on alternative measures, whether that’s installing in-home filters, purchasing bottled water, or buying fuel to boil water. Customers with annual incomes of less than US$3,000 pay $20.1 billion annually for water, which amounts to 45 to 60 percent of the global water bill. In fact, low-income urban and rural customers often pay more for clean water than households at the top of the economic wealth pyramid. Households in the slums of Jakarta pay $7.50 for every 1,000 liters of water sold by local vendors, even though the official utility tariff is $0.12 per liter. Poor households in rural Cambodia spend up to $180 each year on fuel to boil water, while a water filter would cost only around $40 annually.

The global population living on less than $3,000 per year pay as much as 60 percent of the global water bill.

The main reasons poor households pay more than more affluent households are lack of central infrastructure, lack of affordable and accessible solutions, and lack of financing to purchase options with a higher up-front price tag.

All of this data suggests that there is a business opportunity among low-income customers for suppliers who can overcome existing inefficiencies in the water sector—particularly solutions that can deliver large quantities of water directly to people’s homes. For instance, case studies show that a low-income household with a home connection to a mini-utility service will spend $3.60 on average for water every month, but a household that has to pick up its water daily from a water kiosk is only willing to spend $1.80 per month.

This is not to say that community kiosks are not a viable option. Quite the opposite—the market opportunity for small kiosks is estimated to be about 50 million people worldwide, with each kiosk serving 1,000 to 1,500 people. Household level solutions could potentially serve many more—1.3 billion people—however.

Unlocking the opportunities

Currently, most research on water purification technology is focused on regions and technologies that already have centralized purification infrastructure—namely advanced economies. Indeed, U.S.-based organizations are the dominant water purification R&D centers. Research dedicated to emerging and under-developed markets is growing at a slow rate: only about four percent of the 16,000 scientific articles published each year on water purification focus on these high-need markets. Part of the reason is a marked shift in the focus of academic literature in these areas from technology to policy interventions and institutional (dis)function. It is also because most effective purification technology is well established, so the prospects for groundbreaking new technology is low.

Nevertheless, unlocking appropriate and affordable decentralized water purification solutions is necessary in countries and regions where large-scale water infrastructure expansion is not an immediate possibility. There are several notable emerging trends supporting this need:

  • Kiosks are hotly debated as efficient and cost-effective solutions, but some financially sustainable models have gained traction, particularly in India

  • In remote areas, there is a growing focus on digging wells and accessing groundwater than treating surface water

  • At the household level, there is more emphasis on filtration than chlorine-based solutions

Given the scale of the opportunity for household-level water purification solutions, India and Brazil are evolving as R&D centers on water purification, while China and India are positioning themselves as key technology designers and producers. Multinational companies have otherwise been the dominant source of technology R&D and distribution, however most corporate-made household level products cater to the high-income and emerging middle classes. Low-income customers are primarily served by corporate CSR initiatives and NGOs, which often distribute low-tech solutions for free.

Manufacturing and distribution of household water purification products is an untapped and/or immature market for local entrepreneurs, which NGOs, development agencies and technical assistance providers are increasingly looking to support. Many NGOs are shifting their approach to clean water access by donating equipment to social businesses that are building for-profit water services, rather than donating finished products to end users. Also, larger national and multilateral development agencies are starting to use investment-type funding to enable organizations and socially-driven businesses to bridge the gap between R&D and commercialization. For these efforts to be effective, however, philanthropic dollars are needed to finance awareness and education campaigns on the need for safe water.

One final issue that is inhibiting the development of affordable clean water solutions is the mismatch between country-specific water quality guidelines. The World Health Organization’s standards are the most globally used guidelines, though regionally, there are many different definitions of what “clean” drinking water means. Also, some countries require substances to be added to drinking water, like fluoride and chlorine, that others ban. These inconsistencies impose challenges on making products that can be rolled out both regionally and globally.

This research was conducted by TNO on behalf of Engineering for Change. The complete visual highlights and full report are available here.