Smart Water Management Market

Market Overview

The global smart water management market size was valued at USD 16.12 billion in 2023. It is estimated to reach USD 41.53 billion by 2032, growing at a CAGR of 11.09% during the forecast period (2024–2032). In recent years, the increasing demand for effective wastewater management solutions globally has been estimated to drive the growth of the global smart water management market. Additionally, the non-revenue water loss worldwide is surpassing the recommended values by regulatory bodies, which is, in turn, expected to increase the demand for smart water management.

Smart water management (SWM) is an ICT solution that collects, shares, and evaluates real-time data from water networks. It utilizes digital meters, sensors, geographic information systems, and supervisory control and data acquisition (SCADA) systems to communicate and interact with wastewater systems. SWM's primary goal is to ensure that the infrastructure and energy used for transporting water are managed efficiently. They detect leaks, reduce energy consumption, conserve water, predict equipment failure, and ensure compliance with regulations.

SWM systems are also integrated with meter data management, advanced pressure management, residential water efficiency, advanced analytics, and smart irrigation management systems for enhanced operational efficiency. SMW also lowers the energy water utilities use to pump water, lowers the price of finding leaks and theft, and encourages consumer water conservation. It is used in several sectors such as agriculture, industrial, farming, residential, etc.

Highlights

• Solution dominates the type segment.
• Residential dominates the end-user segment.
• Asia-Pacific is the highest shareholder in the global market.

Market Dynamics

Global Smart Water Management Market Drivers

Growing Need to Manage the Increasing Global Demand for Water

The escalating need to manage the burgeoning global demand for water stands as a critical driver in the global smart water management market. According to the United Nations World Water Development Report 2023, global water use has increased by 600% over the past century and continues to grow at a rate of about 1.8% annually. By 2050, water demand is projected to surge by 55%, primarily due to industrial and domestic needs.

Additionally, the World Resources Institute reports that 25 countries are currently facing extremely high water stress, where more than 80% of the available supply is withdrawn each year. Furthermore, the World Bank's 2022 data shows that 32 billion cubic meters of water, valued at $9 billion, are lost annually due to leaks in urban areas alone. Thus, implementing smart water management technologies is of vital importance and can help to cater to this problem.

Increasing Demand to Reduce Non-revenue Water (NRW) Losses

The escalating need to curb Non-Revenue Water (NRW) losses has emerged as a critical catalyst in propelling the global smart water management market forward. The latest Water Global Practice report by the World Bank underscores the substantial impact of NRW, which amounts to approximately $39 billion in annual costs for utilities worldwide. Within urban water systems, an average of 25-30% of water is lost due to leaks, theft, or metering inaccuracies.

In response, smart water management technologies have emerged as potent solutions to address this pressing issue. A 2023 study conducted by the International Water Association revealed that utilities adopting smart leak detection systems experienced a remarkable 30% reduction in NRW within just two years. This underscores the pivotal role of smart water management technologies in enhancing operational efficiency, reducing losses, and conserving precious water resources, thereby fueling the increasing demand for these solutions within the Global Smart Water Management Market.

Global Smart Water Management Market Restraint

Lack of Capital Investments to Install Infrastructure

The lack of capital investments in infrastructure remains a significant barrier to the growth of the Global Smart Water Management Market. According to the World Bank's 2022 report on water infrastructure, approximately $114 billion is invested annually in water supply and sanitation globally. However, this amount falls dramatically short of the $850 billion required each year until 2030 to achieve universal access to safe water. In India, for instance, the National Jal Jeevan Mission estimates a need for $50 billion to provide piped water to all rural homes by 2024. Unfortunately, due to budget constraints, smart water components are often excluded.

Thus, utilities in many regions face a tough decision between investing in basic infrastructure and opting for smart upgrades. The American Water Works Association's 2022 survey highlights this challenge, showing that while 76% of U.S. utilities recognize the benefits of smart water management, only 28% have budgeted for such technologies in the next five years. This gap underscores the formidable restraint that inadequate capital investment imposes on the advancement of smart water management solutions globally.

Global Smart Water Management Market Opportunities

Growing Role of Smart Water Management in the Smart City Revolution

The escalating significance of smart water management within the smart city revolution offers an unparalleled market opportunity for the global smart water management market. As per the United Nations' 2023 World Cities Report, the global urban population has reached 56.2%, with projections soaring to 68.4% by 2050, ushering in an additional 2.5 billion urban residents. This urbanization surge is driving the evolution of smart cities, with IDC's Worldwide Smart Cities Spending Guide estimating investments to escalate from $124 billion in 2020 to $203 billion by 2024, showcasing a robust CAGR of 14.4%.

Within this dynamic ecosystem, smart water systems are emerging as key players. A 2023 study conducted by Frost & Sullivan underscores this by revealing that water management commands a substantial portion of smart city budgets, ranging from 20-25%, standing second only to energy. This underscores the pivotal role of smart water management solutions in the broader context of smart city development and underscores the immense potential for growth and innovation within the global smart water management market.

Regional Analysis

Asia Pacific Dominates the Global Market

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Asia Pacific is the most significant global market shareholder and is expected to expand substantially during the forecast period. By 2050, more than two-thirds of Asia-Pacific's urban population will reside in urban regions. The region includes nations with significant non-revenue water (NRW) losses, such as India (with nearly 60% of revenue losses from the water distributed) and Singapore. These numbers indicate the need for water management and the growth potential of the regional market.

In addition, the increasing number of smart cities in the region is anticipated to generate significant business opportunities for smart water management solutions providers. For instance, India aims to construct around 100 smart cities through initiatives like India's Smart Cities Mission. Furthermore, Asian regions such as Malaysia, Japan, Vietnam, and Thailand, among others, have also undertaken significant efforts to develop smart water systems, signaling the market's potential for growth. For instance, Japan has a comparatively lower NRW than the United States (24%) and has invested in water management infrastructure. With the help of the Japan Water Research Center (JWRC), the country plans to achieve a 100% rollout of smart water meters by 2025. Consequently, these factors are estimated to foster the Asia-Pacific smart water management market growth.

When it comes to the global market for smart water management, Europe is a sub-dominant region. This region places a significant emphasis on environmentally friendly and effective water management practices. The European Environment Agency (EEA) reports that the region is experiencing significant water stress, as more than 20% of the population of Europe resides in areas that are inadequately supplied with water.

Additionally, the increasing adoption of smart meters, real-time monitoring systems, and the incorporation of Internet of Things (IoT) technologies are the primary factors driving the growth of the market in this region. Furthermore, Diehl Stiftung & Co. KG, Itron, and Kamstrup are among the most important players in the European market. These companies are making significant contributions to the region's efforts to manage water resources in a more efficient and environmentally responsible manner. Thus, the factors above are estimated to drive the European smart water management market.

Segmental Analysis

The global smart water management market is segmented by type and end-user.

Based on type, the global smart water management market is divided into solutions and services.

The solution segment is estimated to be the largest revenue contributor to the market throughout the forecast period. The solution segment is further bifurcated into asset management, SCADA, distribution network monitoring, meter data management, analytics, and other solutions based on type. The distribution network monitoring segment dominated the market and is expected to grow at a CAGR of 14.40%. In a water distribution system, appropriate pressure management is an essential aspect of service sustainability, which provides a consistent level of service, helps reduce water loss through leakage, saves energy, and improves the proportion of revenue-earning water. In addition, SWM technology provides real-time data to support monitoring water flow quantity and pressure in the distribution network at various critical points in the water supply system. This enables the management teams to identify leakages quickly and take preventive measures to control water losses. The data is transferred automatically to the server, where the distribution network is linked to GIS maps through advanced water management software.

Based on the end-user, the global smart water management market is segmented into residential, commercial, and industrial.

The residential segment owns the highest market share during the forecast period. Residential water consumption contributes to a large portion of global water consumption, as water is a luxury that must be conserved efficiently. Therefore, smart water management technology plays a crucial role in making individuals accountable for water misuse. Consumers are modernizing their homes by adopting intelligent water management software and hardware. This adoption rate is increasing rapidly as software and hardware become less expensive and more affordable.

In addition, digitization and the adoption of connected technologies are influencing all smart water management solutions applications by redefining how residential smart water management systems interact with their surroundings. As residential customers become increasingly aware of the advantages of smart water management solutions in terms of reduced water waste, the demand for these solutions for home and building automation is anticipated to increase over the forecast period.

Recent Developments

• May 2024- Spark IoT (Internet of Things) announced a collaboration with Iota, a subsidiary of South East Water (the water authority for the South East of Melbourne in Australia), to bring its enterprise IoT platform Lentic® and a new generation of smart water meter technology to local councils and water utilities in New Zealand.
• January 2024- ABB acquired an innovative optical sensor firm to broaden its smart water management portfolio. ABB's acquisition of Canadian startup Real Tech broadens its strong foothold in the water industry and enhances its portfolio with optical sensor technology vital to the age of smart water. The acquisition positioned ABB for growth potential caused by the global push for sustainable water management.