U.S. Companies Report Water Issues Impact Site Selection, Strategic Planning

In a recent Pacific Institute and Vox Global survey, about 80 percent of U.S. companies reported that water availability has become an issue for their business, particularly among firms in the South and Southwestern regions of the country. About 63 percent said water issues would affect their future location decisions, and more than half reported that they expected water scarcity to impact their growth and profitability over the next five years. This year’s Global Risks report from the World Economic Forum, ranked water concerns as the third greatest risk to the global economy, separate from and ranked above climate change and extreme weather events.  In recognition of these developments, Michigan’s University Research Corridor institutions have begun highlighting their work in the water economy.

The Pacific Institute/Vox Global survey focused on the water-related concerns of companies in a broad cross-section of industries in every part of the country. While the sample size of 50 companies is too small to be considered statistically significant, most of the companies involved are among the Fortune 500, including Intel, AT&T, GlaxoSmithKlein, DuPont and Alcoa. Many of these companies represent anchor and feeder institutions for the national and regional innovation economies.

Among these firms, concern about water scarcity has grown dramatically over the past five years, and most expect it to become an even greater challenge in the near future. In 2008, 28 percent of companies reported having discussed water issues at the board level. That figure grew to 89 percent in 2013. Similarly, 37 percent reported including water in their location decisions in 2008, which grew to 63 percent last year. By 2018, 86 percent expect to consider water availability in their site selection. Over the next five years, 57 percent of respondent companies expect water to impact their growth and profitability.

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Those rising concerns, according to authors in this and a related Pacific Institute report, suggest that private sector leaders need to become more engaged with public water policy and management to stave off the costly effects of water scarcity. The public sector, however, also clearly has a stake in the future of regional water issues. With more firms basing their location and expansion decisions on water availability, local solutions could represent a competitive advantage, as could a foothold in the growing market for water-related technologies.

Michigan’s University Research Corridor (URC) recently announced that they had made progress on both fronts in a report detailing their $300 million investment in water, research and outreach activities over the past five years. Funding for that work was provided through 2,100 awards to the three universities of the URC – Michigan State University, the University of Michigan and Wayne State University. The authors estimate that Michigan’s Blue Economy, which includes jobs and companies related to the water industry and the state’s Great Lakes and other water resources, employs 718,700 people. Michigan ranks fourth in the nation in its percent of jobs related to water, according to the authors.

The report also provides details on how the state’s water resources have enabled the growth of its automotive and manufacturing sectors, and remains important to Michigan’s future economic prospects. The $300 million in awards secured for water-related activities nearly equals the volume of awards for advanced automotive research, for which Michigan is better known. In 2012, URC universities awarded more than 3,400 degrees in water-related fields, and have actively engaged with private businesses to provide water solutions. For other states and universities interested in similar studies, the report provides a useful breakdown of industries related to water, and university programs connected to water research and outreach.

Download the report…