California Innovation and Meeting the Water Challenge

With the economic toll of California's drought expected to hit $2.74 billion for 2015, water suppliers, investors and urban and agricultural users are seeking ways to reduce water consumption.

California has relatively high water use compared to other states, particularly in domestic water use per capita and average irrigation application rate. However, urban water users were able to save 600,000 acre-feet of water between June and August 2015, while venture capital investment looked to match rising demand for products and services improving water efficiency and management. Of the 137 water patents registered in California in 2014, the majority went to water treatment technologies, while advances were also made in water supply networks and efficiency measures. California is building on its innovation strengths to meet the increasing demand for water solutions in response to the state's extreme drought and water shortage challenges.

The report starts with an overview of how California’s water use compares to other states and California’s water usage trends, then focuses on innovation in the water industry and how it can shape the future of water management.

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  • California-based water technology companies received the largest amount of venture capital investment over the last five years of any state in the U.S. In 2014, investors provided nearly $97 million to California water companies, or 38 percent of the U.S. total.
    • The San Diego region alone attracted nearly $82 million in 2014, while venture capital investments in Orange County totaled $10 million, followed by the San Francisco Bay Area with $5 million.
  • California is an innovation leader and can leverage this strength to meet the increasing demand for solutions to its drought and water shortage challenges.
    • The market for reducing municipal water leakage presents a $167 billion global market value opportunity and improving irrigation techniques is a $115 billion market.
  • California has relatively high water use, ranking 41st in the U.S. in domestic water use per capita and 40th in average irrigation application rate in 2010.
    • In 2010, 38 percent of California farmers were using low-volume methods of irrigation, more than double the number who were using these conservation techniques in 1991.
  • About 80 percent of California’s human water use is consumed by agriculture and 20 percent by urban users. In response to Executive Order requirements and the drought, urban water use dropped more than 25 percent in the summer of 2015 compared to 2013.
  • In 2014, California registered nearly twice as many water patents as the next leading state of Texas. Over the last decade, water technology patents grew steadily, reflecting growing research efforts.