October 5, 2008
Water Hub Taps into Future Industry Leaders Meet to Discuss Creating Agency to Foster Growth
By JOHN SCHMID
The Milwaukee region should create an agency to coax growth out of its patchwork water-technology sector and devote a research park to water industries, according to civic and business leaders who want the area to become the "Silicon Valley of water technologies."The strategy emerged from a two-day brainstorming session at a Walworth County resort -- no cell phones allowed -- involving officials from several water-related companies, two universities, economic development agencies and aides to elected officials.
"There was a lot of discussion about, 'Should we place this bet?' " said Bruce Keyes, an attorney at Foley & Lardner who attended the session. "Everyone understands that the potential upside is huge. By the end of the second day, people were solidly in."
If a single economic growth idea has seized Milwaukee's imagination in the past year, it's the oft-cited demand for water treatment systems in a world where a third of the population is projected to lack clean water by 2025, according to the United Nations.
"Over a fast-paced two days, 44 leaders came together and mapped out an aggressive strategic program to make the region the world hub for research and solutions to meet the world's freshwater challenges," said Rich Meeusen, chief executive of Badger Meter Inc. and co-chairman of a business committee called the Water Council.
Meeusen was among the first to recognize that the Milwaukee region is home to a concentration of water companies. They include nine different facilities for five of the world's 11 largest water companies.
But it's equally clear that those companies lack the collaborative research capacities to act as a global player, at least at this stage. Rather, they operate mostly in isolation, without any tradition of working with the local universities -- a serious shortcoming, when one considers the contributions that the University of Wisconsin-Madison has made to biotech development and the role that Silicon Valley universities played in advancing computer science.
Milwaukee, by contrast, has failed to generate a meaningful number of patents for water innovations, although the big companies boast their own labs. The Great Lakes WATER Research Institute at the University of Wisconsin-Milwaukee focuses on ecology, not water- treatment technologies.
The brainstorming session included representatives of at least nine water-related companies, although most big players that have a presence in the region were notably absent -- among them, ITT Corp. and Siemens AG.
The proposed new agency would coordinate research-and- development projects with private industry and create the industrial research park, which in turn would promote new technologies, patents and start-up companies. The agency also would operate a Web site to coordinate data, research funding, job opportunities and trade shows.
Plus, it would apply for United Nations recognition so it could participate in UN debates on global water policy.
A separate initiative that emerged from the meeting grew out of the Great Lakes Compact, an agreement meant to protect the world's largest single body of fresh water from wholesale diversions outside the basin.
The agreement, which President Bush signed into law on Friday, "is just nebulous enough" to create an entirely new body of law that has to be applied and public policy to go with it, Meeusen said.
At the urging of the Milwaukee 7, the seven-county economic development consortium that has championed the water initiatives, Marquette University said it is exploring the creation of an international law program, prompted by the disputes that the compact is likely to trigger.
For instance, the compact will demand interpretation to distinguish between a "straddling community" on the watershed, such as New Berlin, and a "community in a straddling county" like the city of Waukesha, Meeusen said.
Water disputes already have erupted around the world, from the Middle East to Colorado. The most recent edition of the Journal of the American Bar Association anticipates "widespread and bitter" conflicts over water rights within the United States.
"The expertise to settle those disputes should come out of Milwaukee because Milwaukee is the only region that's cut in half," with many of its suburbs lying outside the Lake Michigan watershed, Meeusen said.
Other initiatives proposed at the meeting involve the creation of internships and scholarships to open a pipeline of water- engineering talent for the regional companies, and efforts to market the region as a world water hub.
Those efforts complement the creation of a graduate-level School of Freshwater Science at the University of Wisconsin-Milwaukee, which had nine delegates at the meeting, including its chancellor, Carlos Santiago. The university hopes to launch the school by fall of 2009, and the school could host the proposed regional water agency.
"It's almost like an accidental convergence," Santiago said. "Lo and behold, we discover 100 water companies (in the region). Lo and behold, we're sitting next to this huge body of fresh water. Lo and behold, we're building a School of Freshwater Science. It's all coming together, and no one planned it."
Firing the imagination of the planners is the prospect that demand is growing rapidly for technologies that can conserve, clean and recycle water -- particularly new systems that require minimal energy.
While it's too early to predict how the Wall Street credit crisis will affect investment in global water projects, investors have discovered the water sector's global growth potential.
Recent reports from investment analysts and public policy groups concur that water shortages loom from the Colorado River basin and Atlanta in the United States to China's arid northern plains to parts of the Middle East and Africa.
"It took a while, but Wall Street has caught up with water," said Meeusen, whose company ranks 45th on the Goldman Sachs list of the world's biggest water-related companies.
France-based Veolia Environment SA, the world's biggest water company, says that nearly one person in six already lacks access to drinkable water. Veolia entered the Milwaukee market in December when it won a $400 million, multiyear contract to operate the Milwaukee Metropolitan Sewerage District. The company will give a $1.5 million research grant to help UWM jumpstart its water- technology efforts.
If Meeusen had his way, the new agency would be called the "world water hub," but it doesn't have a formal name yet. It will get its funding from companies, foundations and government support.
Bottled water already costs more than gasoline. And yet the argument that water will be the oil of the 21st century fails to impart the magnitude of the looming water crisis, Meeusen said.
There are substitutes for oil, including wind, hydro, solar and biofuels, but there is no life-sustaining substitute for clean water, he said.
"We need a sign at the airport that says, 'Welcome to Milwaukee - - the world water hub.' "
On the Web
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