Eawag: Cirus: Business Innovation for Sustainable Infrastructure Services

Urban water management is currently confronted with enormous challenges. In industrialized countries, major concerns are insufficient investments and the often inefficient management of the highly capital intensive physical infrastructures (e.g., sewers, waste water treatment plants, etc.). In newly industrializing countries concerns relate to rapid urban growth and the provision of basic services in challenging environmental conditions. Developing countries finally have to create low cost access for disadvantaged population segments with regard to basic water services both in drinking water provision and sanitation.

Research on business innovation can make a substantial contribution for solving these challenges by analyzing conditions under which innovative products and services can be developed and provided by utilities, new service providers and/or public-private partnerships in a cost effective, socially equitable and environmentally sustainable way.

Research in the field of business innovation in infrastructure sectors addresses the following domains:

Business model innovation:

New technical opportunities such as on-site treatment and increasing concerns with costs for providing utility services call for new business models. These new business models reconfigure the value chain and the role of the existing actors. Examples for such new organizational configurations are specific business models for decentralized water treatment systems, public private partnerships and regional utility cooperatives. Scalable business models are of particular importance in rapidly industrializing and developing countries with weak public institutions. Therefore, the search for functioning drinking water provision and sanitation in these countries should increasingly consider concepts that start at “base of the pyramid”. Examples for such innovative concepts are micro-utility models in Bangladesh, Brazil, India, Uganda and South Africa.

The management of radical innovation in infrastructure sectors:

One of the very promising research lines in the field of sustainability transitions relates to the emergence and diffusion of radical system alternatives in urban water management such as on-site treatment. Research on business innovation scrutinizes the conditions for successful innovation management at the organizational level in both, multinational technology firms and small and medium sized enterprises. Understanding these questions is crucial for effectively developing, manufacturing and marketing mass produced technological components and appliances for the future urban water sector.

Innovation in management practices in utilities:

Due to the long life-cycle of core technological components, strategic planning in infrastructure sectors is confronted with particular challenges. For instance, utilities face uncertainties associated with planning horizons of several decades, which implies that decisions to implement specific technological configurations (e.g., centralized treatment plants) may lock out alternatives for many decades. A particular problem is furthermore that water utilities provide a public service that can not only adhere to pure business logics but have to consider public policy concerns as well. This has mostly been neglected in the management literature so far and therefore represents a highly promising domain of academic research. The topic of innovation in management practices is of high relevance for urban water utilities in Switzerland and abroad.

Key publications

Worch, H., Kabinga, M., Eberhard, A., Truffer, B. Strategic Renewal and the Change of Capabilities in Utility Firms. European Business Review 24(5), pp. 444 – 464.

Gebauer, H. Truffer, B., Binz, C., Störmer, E. 2012. Business network formation for onsite wastewater treatment systems. European Business Review, 24(2), 169-190.

Worch, H., Eberhard, A., Kabinga, M., Markard, J., Truffer, B. 2012. Tackling the Capability Gap in Utility Firms: Applying Management Research to Infrastructure Sectors. CID Research Fellow and Graduate Student Working Paper No. 55. Harvard Kennedy School, Cambridge (MA) January 2012

Dominguez, D., Worch, H., Markard, J., Truffer, B., Gujer, W. 2009. Strategic Planning and Organizational Transformation in Infrastructure Sectors: Case Study Evidence from Swiss Wastewater Utilities. California Management Review, 51(2), 30-50.