The latest paper from BlueTech Research, Assessing and Anticipating the Real World Impact of Innovative Water Technologies, has been published in The Journal of Cleaner Production.

Authored by Paul O’Callaghan, Lakshmi Manjoosha Adapa and Cees Buisman, the paper’s highlights include:

  • Levels of impact are defined based on reference sites, countries and market value
  • The average time required to reach Level 1 (Unicorn) impact was 21 years
  • It is possible for technologies to move from Level 2 to Level 1 impact in 10 years
  • Having two to three competitors is beneficial to accelerate opening up a new market

BlueTech Research chief executive Paul O’Callaghan said: “What surprised me in particular in this research, was why some technologies managed to break through and get to over 1,000 sites, in 25 countries and create new markets worth over US$500M per year, while others seemed destined to never achieve that same exit velocity. The findings shed light on some common denominators and what to look for when ‘unicorn spotting’”.

The paper’s abstract and introduction is below.

Abstract

Many new water technologies are referred to as being disruptive. The term disruptive innovation is overused to the point that it has lost much of its meaning. There is no clear framework to quantify or measure the impact of new water technologies. This paper proposes a series of different metrics as an objective means to quantify the market impact of technologies, based on empirical data, and assesses their practicality in application.

Three different levels of market impact are defined, the lowest being Level 3 and the highest Level 1. Selected metrics are applied to empirical data for 11 different water technologies to test the framework. It was found that the average time required to reach Level 1 impact, from the first installation, was 21 years, while it was possible to move from Level 2 to Level 1 in 10 years. The presence of two to three competitors in the market has a synergistic effect and can accelerate overall adoption of a technology class. The fragmented nature of the water sector has been observed to act as a buffer against disruption.

The metrics, which have been found to be useful in evaluating the impact of water technologies, are the total number countries in which the technology is adopted, the total number of units that have been deployed and the annual market value the technology achieved. It has also been observed that certain innovation typologies and innovation drivers are associated with high levels of market impact while other combinations are associated with zombie technologies.

Introduction

Innovation is vital for driving change, creating industries, sustaining competitive performance and improving quality of life and the environment. However, water utilities are typically slow to adopt new concepts and innovation into their facilities and operations due to barriers such as cost and financing, risk aversion and regulatory compliance (Kiparsky et al., 2016). Even though over 90% of utility respondents believe innovation is critical for the future of their organisations, only 40% believe they are effectively leveraging innovation to meet challenges and evolve (Carter et al., 2017).

The goal of this paper is to develop a framework that will provide practitioners in the field of water technology innovation with a basis to objectively look at a particular water technology and gauge the level of market impact it has had. This will be achieved by developing a series of metrics that can be used to assign the level of impact into one of three categories, Level 1, 2 and 3, with Level 1 being the highest level of impact. Technologies which have achieved Level 1 will be referred to as Unicorn Technologies. The metrics will then be applied to various different water and wastewater technologies as a series of test cases. The time that each technology spent at each level will be quantified. This paper studies what types of technologies achieve the highest level of impact, how long this takes and also which types of technologies fail to achieve high levels of impact. By studying the range of factors surrounding those technologies which have high impact, and those which do not, we hope to better understand the technology diffusion landscape, realistic timelines and what factors correlate with different levels of impact.

In a previous paper, the authors outlined different types of innovation including sustaining innovation, radical functionality and discontinuous innovation (O’Callaghan et al., 2020), and studied different innovation drivers: crisis-driven and value-driven innovation (O’Callaghan et al., 2019). In the water sector, the adoption of a technology driven purely by its value proposition typically takes around 14 years. It must move through the Innovators and Early Adopters stages of the market and reach the Early and Late Majority, according to the Water Technology Adoption (WaTA) model (O’Callaghan et al., 2018). In the case of a technology whose adoption is driven by a crisis or market need, such as a new piece of legislation or an urgent health or environmental issue, the timeline can be half this, at just under seven years (O’Callaghan et al., 2019). While value-driven innovation has a slower cycle for adoption, it presents lower risk of failure as it is less dependent on external factors such as the timing of implementation of regulations or the occurrence of some public health related or environmental crisis (O’Callaghan et al., 2019).

Many technologies are researched and developed, but how many have real world impact? Many research topics such as bio-electrochemical and microbial fuel cell systems and photocatalytic oxidation have a large body of published literature and citations, yet have had relatively little impact in terms of solving real world global water challenges, despite being intensively researched for decades in the case of advanced oxidation processes (AOPs) via photocatalysis for water treatment (Loeb et al., 2019).

The boom in published literature on the topic of photocatalytic water treatment, with 8,000 articles published between 2000 and 2017, can lead to a certain amount of hype, and push a technology to the Peak of Inflated Expectations on the Gartner Hype Cycle (Dedehayir and Steinert, 2016). This phase is known to generate enthusiasm and unrealistic expectations where there are typically more failures than successful applications of a technology (Bresciani and Eppler, 2008).

Many new technologies are referred to as being disruptive. The term disruptive innovation has become trite (Schmidt and Druehl, 2008). Disruptiveness is not a characteristic of a technology but its effects on the market (O’Callaghan et al., 2020). Several frameworks for assessing and predicting disruptive innovation have been proposed in the literature (Thomond and Lettice, 2002Rasool et al., 2018).

Despite the progress made by academics since the publication of three foundational works in this area (Bower and Christensen, 1995Christensen and Bower, 1996Christensen, 1997), practitioners still struggle with the innovation challenge and ways to confidently predict whether an early-stage disruptive innovation technology would have a good chance of succeeding and disrupting the market. To facilitate an academic discussion in the business community, a clear definition of disruptive innovation is required (Nagy et al., 2016). Disruptive innovation theory is still in its infancy and many areas of theory remain under-researched due to the lack of understanding and accessible empirical data (Christensen et al., 2018).

A previous paper by the authors analysed the use of the term disruptive innovation in relation to water technologies and proposed alternative innovation classification systems (O’Callaghan et al., 2020). It was noted that sustaining innovation either helps existing companies retain market share, or claw some of it away from others, but this type of innovation does not counteract non-consumption or create new markets. Discontinuous innovation, which can be summed up as doing something that is already being done but in a totally new way, and radical functionality, representing something that has never been done before, can create a new market (Sood et al., 2005) or take market share from existing technologies (Dewar and Dutton, 1986).

This paper looks at what constitutes a disruption, or impact, from the perspective of a water treatment technology.

The level of impact can only be assessed retrospectively. The authors wish to explore whether certain innovation characteristics of the technology, which can be identified earlier in its lifecycle, correlate with different levels of market impact. There may also be differences in the relative rates of impact that correlate to innovation typology. This would be of use to those wishing to invest in the development of new innovations, in setting realistic expectations based on how they map across this framework. How their real-world impact can be measured and quantified is another question.

Technology readiness levels (TRLs) are a method for estimating the maturity of technologies, developed by the NASA in the 1970s. They enable consistent, uniform discussions of technical maturity across different types of technology. Moving a technology from early-stage TRLs 1, 2 and 3 through to TRL 6 or higher, does not in itself guarantee impact in terms of application, widespread adoption or implementation. Likewise, moving a technology beyond the Early Adopters stage of the WaTA model, and into the Early and Late Majority section of the market, does not equate to the level of impact.

There are certain cases where technologies have become extremely dominant in particular applications. For example the use of spiral-wound thin-film composite reverse osmosis (RO) membranes in seawater desalination, with over 80% of all newly built seawater desalination plants using this technology instead of thermal desalination technologies, such as multiple effect distillation (MED), with the exception of some plants in the Middle East where thermal energy is available at low cost (Global Water Intelligence (GWI), 2019).

It is acknowledged in the literature that in terms of the introduction of new technologies, the rate of adoption of innovation in the water sector is relatively slow (Thomas and Ford, 2005Wehn and Montalvo, 2018); by contrast the uptake of sustaining innovations to existing technologies is important to technology providers in maintaining market share in what are typically mature and regulated markets.

How should we go about quantifying and measuring market impact? What constitutes disruption? Where should we set the bar so that we can objectively define levels of impact? A set of criteria has been created in this paper that represents a meaningful and robust method to measure the level of impact and adoption. It is valuable to combine and overlay this framework with innovation types, as outlined by O’Callaghan et at. 2020, to see if particular innovation types and characteristics are linked to higher levels of impact and adoption. The dimension of time was also overlayed to study the rate of impact by looking at typical timeframes associated with achieving certain levels of impact.

The report can be viewed in full on the ScienceDirect website. Anyone clicking on thef link before August 27, 2021 will be taken directly to the final version of the article, which they are welcome to read or download  https://authors.elsevier.com/a/1dNIz3QCo9bNOP