Human pressures on water resources are increasing unsustainably. At the same, time climate change impacts are being amplified. Water demands are increasing to feed growing populations, meet our energy needs, service expanding urban areas and satisfy industrial demands.
At UN level, the 2030 Agenda through its SDG6 - Clean water and sanitation, recognizes the centrality of water resources to sustainable development and the vital role that improved drinking water, sanitation and hygiene play in progress in other areas, including health, education, and poverty reduction.
In 2023, at the UN 2023 Water Conference, the EU presented 33 commitments for concrete and transformative actions to address global water challenges which are currently being implemented. Among them, point 6 on improvement of transboundary cooperation across water basins and point 27 on support to countries in the East European Neighbourhood and in the Southern Neighbourhood illustrate the international angle of the EU intervention.
In 2024, the Council Conclusions on Green Diplomacy recognised that the stability of the global water cycle is a global concern that underpins the achievement of all SDGs and reiterated the importance of a strategic EU approach to water resilience and security and underlines the need for enhanced diplomacy in this regard.
With 2.3 billion people living in water stressed countries, improvements in the way we use and manage our water are urgently needed to sustain our development and to ensure security.
To meet these challenges, the European smart water industry has an important role to play.
By investing in its smart water sector including by supporting internationalization of SMEs, the EU has the chance to turn water challenges into new technological, societal, and business opportunities.
`The EU's `traditional' water sector includes a large number of players, including 9000 active SMEs, and provides almost 500,000 full-time equivalent jobs' functioning in `a global market with an estimated value of circa €62.9 trillion' In Europe only, the overall billed amount in 2021 was €108 billion while the annual investment in water infrastructure amounted to €45 billion a year.
There is a direct link between internationalisation and increased performance of SMEs. International activities reinforce growth, enhance competitiveness and support the long-term sustainability of companies.
Internationalization of SMEs in the smart water sector contributes to Europe's competitiveness by expanding market reach, driving innovation, and fostering economic growth. By accessing international markets, SMEs can diversify their customer base, mitigate risks associated with domestic market fluctuations, and leverage global opportunities for growth and collaboration.
By leveraging financial support and clustering initiatives, SMEs can contribute to addressing global water challenges and driving sustainable development.
In its Communication on SME Strategy for a Sustainable and Digital Europe, 2020, the European Commission recognises the important role clusters play in supporting the globalisation of SMEs together with the inclusion of dedicated SME chapters in all its trade agreements
Clusters provide SMEs in the smart water sector with access to specialized resources, networking opportunities, and support services essential for internationalization. By clustering, SMEs can collaborate on joint ventures, share market insights, and access funding opportunities, thus enhancing their competitiveness.
Funding clusters active in the smart water sector is paramount in order to support a cost effective and speedy internationalisation of SEMs. Such funds have been made available at EU level through programs like the Single Market Programme or through Operational Programs under the ERDF. However, the budget for internationalisation partnerships has been relatively low and split between many parties, making it difficult to create a lasting impact. Also, the awareness of SMEs regarding the existing opportunities needs to be improved.
Recognising the importance of the smart water sector and strengthening the support available for clusters is paramount if the sector is to play its key role in addressing global water challenges. Such support should include opportunities to access easy funding for new value chains identified by the clusters in their activities.
SMEs benefit more from rule-based trade opening than large companies, which have more resources for overcoming trade barriers. Therefore, the practice of Agreements on Clusters and giving visibility to the smart water sector in the negotiation of new trade and investment agreements is paramount for the internationalisation of the sector.
