WisBusiness: Doyle compares state’s water technology industry to beginnings of dairy industry

By David A. Wise

WisBusiness.com

Gov. Jim Doyle says this century could see Wisconsin thrive by focusing on water technology the way it moved to focus on the dairy industry in the last century.

“We have a resource like no one else. Right now the demand for fresh water is dramatic,” Doyle told reporters. “We have water here. We know how to withdraw water, we know how to use water, we know how to clean water, we know how to return water and we have a lot of businesses that are involved in that process.”

Doyle discussed the industry with more than 200 attendees at the Milwaukee 7 Water Council’s sold-out Water Summit III at Discovery World in Milwaukee. He also announced plans to travel to Israel in the fall to speak at a conference on water and environmental technology.

He noted that the Milwaukee area is already home to 120 water-related companies, is the home of the Great Lakes Water Institute — the largest freshwater academic research facility on the Great Lakes — and that the University of Wisconsin-Milwaukee is in the process of opening the country’s first school of freshwater science. He also pointed out that Milwaukee was designated in April a UN Global Compact city for water, making it the second Global Compact city in the United States and the only one globally involved in freshwater technology.

In the early 1900s Wisconsin was heavily invested in growing wheat, Doyle said, but was not necessarily the best at it. He noted that an assessment of the state’s resources revealed potential for the state in the dairy industry and that the state enacted policy and educational initiatives to encourage the switch from wheat to dairy.

“That is an example of what you do as you understand what the assets of a state are and take that and build an economic future,” Doyle said. “We can do the same thing with water.”

The governor plans to highlight Wisconsin’s water technology industry and learn what others around the globe are doing when he speaks at the Water Technology and Environmental Control Exhibition and Conference, which runs from Nov. 17-19 in Tel Aviv. It will feature an international problem-solving forum for water, energy and environmental technology issues.

Israel has become a world leader in water technologies, Doyle said. He said what’s happening with the development in the water industry in Wisconsin fits well with what is happening in Israel.

Assaf Barnea, chief executive of the Israeli water technology incubator Kinrot Ventures, also spoke at Monday’s summit, largely focused on the financing of the water industry.

Barnea said the investment world first woke up to the water technology industry when GE and Siemens made large investments in the sector in 2004.

While he spoke of the potential in the water industry, Barnea warned potential investors that water industry startups are much different than other technology startups.

“Do not duplicate whatever you guys got used to … in the high-tech industry,” Barnea said. “This is not the same market, not the same entrepreneurs, not the same time to market, not the same business model.”

Barnea described the market as slower moving than high-tech and driven by entrepreneurs that tend to come from engineering backgrounds rather than business backgrounds and generally older than those in tech startups.

He noted that businesses can be successful if they can create products that fit withing the existing infrastructure.

“A lot of companies … can be a success if they can retrofit into existing infrastructure, into up and running processes,” Barnea said. “It they can do that, there is more potential to penetrate in to what is a very conservative, very slow-paced market.”

Kinrot partners with the Israeli government to fund and manage the development of water companies through an incubator program. Barnea said the companies in the incubator operate on a budget of between $500,000 and $1 million, funded 85 percent by the government and up to 15 percent by Kinrot. The incubator works with companies for two to three years, sometimes beginning with only an idea, in an attempt to advance the product so it can become marketable or attract venture capital.

He noted that the incubator maintains majority power over companies within the incubator even if it does not have a majority financial position.

“We need to be there with very hands on approach,” Barnea said.