R&D

Abstract

R&D. That simple abbreviation can be interpreted in many ways. For example:

·         The laboratory know-how that develops the technology used to keep top industrial companies on the cutting edge.

·         Intellectual property and the laws protecting the owner’s rights.

·         The basis for the products (e.g., household appliances, electronics, and telecommunications, among others) we are so accustomed to and take for granted as a part of daily life.

·         The foundation for the next industrial advancement.

Of course, one could add many other aspects to this list. These bullets are also relevant to the water business.

The final bullet in particular is relevant for the current state of the water business. When one examines history, there have been different moments that have radically changed the human experience. For example, the invention of the automobile revolutionized personal transportation. At the same time, it created a many supporting industries and ancillary businesses (repair garages and car rentals), and radically impacted the horse and buggy business.

In water treatment, the invention of ion-exchange resins allowed water treaters to demineralize water in a way that wasn’t possible before, and paved the way for the high-purity water that we today associate with pharmaceuticals, power, and microelectronics. Likewise, reverse osmosis membranes have had a revolutionary impact on water treatment.

So, now the question arises about what is the next advancement the water business can expect? Will it be on the monitoring side? For example, sensors more accurate than those currently available that could provide both real time microbial monitoring and bacteria identification? That would certainly be a boon for life sciences, and the food and beverage industries. Or, will nanotechnology researchers find new practical ways to incorporate nanotubes or other aspects into new or existing treatment technologies? Another thought—perhaps a new treatment chemistry is lurking that would help solve one of the banes to endusers: corrosion and scaling.

The advancements we all look for in the water business carry a price—R&D. Just like technology companies that spend regularly on research, the water business faces that need. In past years, it has not been uncommon for water technology owners to opt to seek to let a successful product (ion exchange resins, membranes, and others) become commoditized to maximize existing sales and profits. Sometimes this is at the expense R&D spending to advance the product. When that occurs, then water treatment advances slowly. But in fairness, it should be noted that many treatment technologies have reached their optimal development.

But the question does arise about whether or not the corporations and smaller companies that make up the water business could invest more in R&D than they currently do. And in today’s world, R&D extends far beyond the traditional view of a laboratory nestled inside a major corporation. Today, water treatment R&D can be found in universities, in the garages or basements of entrepreneurs, in small companies, government-sponsored research facilities, and even in the field where technicians may run tests and pilot work on innovative ideas. A look at the “state of water business R&D” is a topic worthy for research and one we will soon address.

Please understand, these comments are aimed at encouraging R&D, and do not suggest none is occurring. We know that entrepreneurial and corporate companies are both active in research.

Over the years, we have tracked water-related patents, and it has been interesting to see which companies are named as assignees. Of course, many of the leading players in the water treatment field will be associated with patents. But, one will also find individuals, small companies, and universities all named as assignees for patent filings.

This commentary is partly motivated by observations on how the water business has changed over the years. These thoughts were also partially inspired by an article in the Jan. 1 issue of Fortune, entitled, “The Death of American Research and Development” by Chris Matthews. The article includes a bar graph showing changes in R&D business expenditures from 2009 to 2013, which is summarized in Table A.

Table A

Changes in R&D Business Expenditures

Source: Fortune, p. 10 (Jan. 1, 2016).

Another graph in the Fortune article showed a significant decline in the share of U.S. companies publishing new scientific research between 1980 to 2007. The graph showed the number going from 17.7% in 1980 to 6.1% in 2007. This can indicate a couple of things: 1. That intellectual property concerns keep some companies from reporting on new developments; and 2. That with less R&D spending, companies have fewer developments to report on.

Regardless, the challenge facing the water business in 2016 and beyond is to view R&D as a necessary part of their work…just as vital as product sales and market development. With that mindset, then long standing treatment technologies have the opportunity to advance and promising areas such as segments within nanotechnology and elsewhere could also revolutionize the water business.

—Mike Henley

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