Ontario’s water technology champion, WaterTAP, is placing a new focus on supporting the province’s water tech companies as they build capacity to export their products and services. Water Canada spoke with Brent Wootton, who has joined the WaterTAP team in a new role to support the strategy.
Water Canada: Why has WaterTAP chosen to pursue a new focus on exports in 2015?
Brent Wootton: Ontario’s economy is evolving from one driven by resource extraction to manufacturing to a service-based economy. Services now account for approximately 75 per cent of Ontario’s GDP. Manufacturing is still an important part of Ontario’s economy and accounts for half of all manufacturing GDP in Canada. To stay competitive in a changing economy and maintain jobs, Ontario needs to adapt and continue to seek out new markets.
A recent WaterTAP survey showed that more than 70 per cent of Ontario-based water technology companies are already exporting products and services, mostly to the United States. This isn’t surprising; the global demand for water sector products and services has never been greater. The water sector in Ontario overlaps both manufacturing and service areas and can provide complete solutions for complex needs.
This year, WaterTAP will place a special focus on helping water technology companies export their solutions to new markets. We’ve done a lot of groundwork, including signing an MOU with the China Energy Conservation and Environmental Protection Group, and offering new services that will assist companies in researching new markets. We hosted a global summit in Toronto in November 2014, and have begun to collaborate with global water technology hubs in countries including Singapore, the Netherlands, Germany, and Israel.
What are some of the most important things companies need to learn about exporting their products and services to other countries?
Companies need to consider many things before entering international markets. The first thing a company must consider is whether or not it is ready to export. Companies must be of a certain size and maturity in order to tackle the complexities and demands of international markets. Any new market will come with a learning curve, an investment of time and resources, as well as considerable risk.
Many companies realize too late that they don’t have the resources or ability to overcome the barriers to entering international markets. Often this realization comes at the worst time—after significant investments have been made and after exposure of IP to competitors and potential end-users who may go to competitors if the company can’t respond.
One solution for export readiness is to find a partner, and finding the right structure is a key part of the equation. A partner can handle many if not most of the challenges of entering the target market. A local partner can assist with language and cultural differences and provide critical market intelligence.
Knowing your market is also critical to success. A company needs to have internal policies regarding how much it will adapt to a foreign market and when it’s time to move on and try other foreign markets. Some companies find success by adapting significantly to the market demands, while other companies find success with a take it or leave it approach, moving to markets that match their offerings. Companies that can’t decide whether they want to adapt their offerings and approach to the local conditions or just move on to a new market opportunity are the ones that tend to struggle. Both strategies can work, but a company should decide in advance. Companies are often lured into foreign markets with the prospect of a quick purchase order with minimal risk, hassle, or investment of resources only to find that the opportunity wasn’t quite what was promised. A company should determine in advance how much investment of resources and effort it is willing to make to get to the finish line. This is especially important for sales teams who are bridging the gap between the buyer and the corporate headquarters back home.
Throughout your career as a scientist, you’ve gained significant experience working in high-potential export markets such as China and India. What can you tell us about those markets and the opportunities for Ontario’s water technology sector?
There is a lot of excitement about these markets. Growing countries have enormous need for water infrastructure, technologies, and associated services, such as engineering and planning. These needs are great, but not everyone agrees the market is accessible to all companies. It is important to acknowledge market determinants. For example, the price point in India is very low. Decision makers won’t agree to contracts that have a high price point for consumers—nor should they, as India still has widespread poverty. The market opportunity in India is volume. If you have a technology that is suitable for the marketplace, the opportunity can be significant. A company that can’t or won’t adapt a pricing strategy for the market conditions of India isn’t likely to be successful.
Like India, China has unique opportunities and conditions. Ontario and Canada frequently send delegations to China—and vice versa—and the market demands cover virtually all expected areas in the water sector. What’s unique about this market and what can stall or stop a potential sale or service agreement is the size of the contract. New visitors to China are always stunned by the scale of everything in that country. For the Chinese, it’s normal. An Ontario company that wants to enter the Chinese market has to be able to respond to the scale of the demand. If the offering passes scrutiny and becomes desirable, the company will need to have the ability to scale up quickly. If that isn’t something the company can do, the Chinese will quickly go to another competitor. Ontario companies won’t find much patience for delays and higher quality of products or services isn’t likely to justify delays.
With its added focus on exports, WaterTAP wants to work with existing services, such as departments within the federal and provincial governments, to assist companies with these sorts of regional nuances.
You’ve also had a hand in Ontario’s policy environment. In 2010, you were an advisor to the Ontario government on the Water Opportunities Act, and you’ve been involved in the Province’s support of its water technology sector for many years. Why did you chose to join WaterTAP’s team?
This year marks a decade for me at Fleming College’s Centre for Alternative Wastewater Treatment. At the Centre, we assisted more 100 water technology companies with R&D, validation and demonstration needs. This direct involvement with so many companies led to my participation with the Province’s economic initiatives for this sector, such as the Water Opportunities Act and the creation of WaterTAP. I’ve seen the incredible potential in Ontario companies, and I passionately believe that Ontario can lead the world in water treatment and protection. I’m excited by the opportunity to promote Ontario companies and assist them in growing their companies and making Ontario the global leader in water.