Mark Smith, Joint Managing Director at WRc (Water Research Centre) says that the UK water sector will face major challenges coming up in AMP6, 7 and beyond - and must introduce transformational change.

Speaking at the WRc‘s Open Innovation Day yesterday, he said the biggest challenge was to change from being an asset management, capital-intensive big engineering solutions-led sector to a customer services industry – and the customer did not mean regulatory “pseudo-customers” in the shape of Ofwat or the Environment Agency.

The sector needed to get away from a “Big Brother knows best”approach. The process was already underway with the introduction of commercial competition - and would ultimately be rolled out to include domestic customers who would be much more demanding in terms of service requirements.

Carbon reduction targets would also drive the change away from centralised treatment solutions to softer, more local solutions. In ten years’ time for PR24 the water sector would be a "very different beast" – by which time there might not even be a Price Review process.

He described the upcoming AMP6 as a transformational AMP which would see a move away from engineering-led to customer service-led solutions which needed transformational, rather than incremental change.

With the water companies present in force, over 200 delegates attended the conference, which reflected a genuine appetite for and understanding of the need for change, coupled with a growing willingness to seek more innovative solutions.

Some of the sessions were particularly thought-provoking – in particular the presentation on Healthcare – Innovation through Strategic Procurement. Professor Christine Harland from the University of Bath made a comparison with the NHS where the organisation faced the key issues of reconciling the conflicting demands of standardisation and variety reduction leading to cost savings vs. treatment innovation. Describing the NHS as a complex confederal network of organisations, rather than a single body with huge variations in prices, products, suppliers and procurement policies, she commented that the water sector was no different. Both sectors required a hybrid portfolio approach, with leading edge technological innovation an imperative for some problems, while other more routine problems could be better addressed by standardised solutions.

Professor Harland referred to the Healthcare Industry Task Force initiative which had identified a small number of key imperatives for innovation needed across the NHS, established shared innovation themes and the need for evidence value for the innovation in question.

Interestingly, she also pointed out research evidence which had highlighted “Big Bang” failures, where large complex single solutions were less likely to succeed – a larger number of smaller innovations worked on incrementally were more likely to succeed.

Other interesting areas flagged up included the need to widen the pool of “experts” who could help with innovation – including experts you don’t employ, retired in-field experts, experts in parallel fields with key insights, and “gifted amateurs”. Social media networks were described as increasingly critical for successful innovation – huge investments in R and D had not proven to be an effective innovation strategy.

The WRc are planning to publish the outputs from the conference on their website.