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Water scarcity arises when supply fails to meet demand, which is one of the most urgent global challenges of the 21st century. The UN warns that by 2030, demand for clean, usable water could exceed supply by up to 40%,¹ threatening ecosystems, economies, and public health. By 2050, 51 countries are projected to face high to extremely high water stress, based on projections by the World Resources Institute (see Figure 1).² The OECD estimates that strategic investments in water security could yield economic benefits worth hundreds of billions of dollars annually.³ Water scarcity thus emerges as a critical global challenge, with effective solutions offering substantial societal and economic benefits.

Figure 1: Projected ratio of human water demand to water availability (water stress level) in 2050

Note: Projections made for 164 countries under the business-as-usual scenario = middle-of-the-road future where temperatures increase by 2.8 to 4.6 degrees Celsius by 2100. Significant regional differences may be misrepresented when data is aggregated at the national level.

Source: Armstrong M. , March 2024

Climate change exacerbates water scarcity by altering rainfall patterns, which leads to prolonged droughts and more intense floods that often fail to recharge groundwater. The retreat of glaciers, previously reliable sources of freshwater, further increases uncertainty about future water availability,⁴ while higher temperatures accelerate microbial growth, impacting water quality.⁵

Population growth and urbanization intensify these challenges. The global population is expected to reach 9.7 billion by 2050,⁶ boosting demand for clean water for drinking, sanitation, and food production. Expanding agriculture drives greater fertilizer and pesticide runoff, degrading water quality.⁷ At the same time, urban expansion often leads to increased extraction of local water resources and reduction of land available for aquifer recharge, making sustainable water use more challenging.

Inefficient management and aging infrastructure also play a role. For instance, the United States loses nearly 20% of treated water due to leaks and pipe bursts.⁸ Many water distribution networks still use outdated materials such as wooden pipes. Emerging economies with less developed water infrastructure are likely to encounter comparable, if not greater, difficulties, as their limited baseline capacity heightens vulnerability to water scarcity.⁹

The health consequences of water scarcity are immediate and severe. Lack of access to safe drinking water increases the prevalence of waterborne diseases such as diarrhea, cholera, dysentery, typhoid, and polio.¹⁰ Low-income regions with poor sanitation are most affected, straining healthcare systems and raising mortality rates. UNICEF links over 1.4 million deaths annually to unsafe water and sanitation.¹¹

The economic impacts extend across multiple sectors. Agriculture, the largest consumer of global freshwater, suffers from reduced irrigation capacity, leading to lower crop yields and higher food prices. Industries reliant on water, such as textiles and semiconductors, could face rising costs and production delays. The World Bank warns that by 2050, water scarcity could reduce GDP growth by up to 6% in the Middle East and the Sahel in Africa.¹²

Environmental consequences further compound the crisis. Freshwater ecosystems support biodiversity, carbon removal, and climate regulation. However, when water resources are overused or contaminated, rivers run dry, wetlands vanish, and entire species face extinction. The Aral Sea, now just 10% of its original size due to diversion and pollution,¹³ exemplifies the ecological consequences of poor resource planning.

Addressing water scarcity requires a mix of solutions, such as desalination, rainwater harvesting and efficient infrastructure. We believe the effectiveness of these solutions relies on robust water testing, which is essential for any comprehensive water management strategy. Accurate diagnostics enable strategic choices, ensuring that critical issues are identified and addressed efficiently.

Rapid microbiological assays are easy to use and allow for quick pathogen detection,¹⁴ which makes them particularly suitable for use in resource-limited communities. Accredited laboratories analyze physical, chemical, and biological parameters, reducing errors and ensuring consistency. Emerging pollutants such as PFAS (Per- and Polyfluoroalkyl Substances) require specialized water treatment and testing.¹⁵ Specialized methods ensure trace-level detection of these persistent contaminants.¹⁶ Furthermore, analytical technologies such as mass spectrometry and ion chromatography provide the sensitivity required to meet increasingly strict standards.¹⁷

Monitoring solutions enable the detection of infrastructure irregularities, helping to safeguard water systems. Advanced modeling capabilities allow authorities to anticipate and respond to emerging risks as environmental conditions change. For example, leak detection networks can prevent the loss of clean water before it occurs.¹⁸ Other modeling and predictive services assess the environment impact of assets and provide design and investment insights, resulting in substantial cost savings and improvements in environmental quality.¹⁹

Companies providing solutions that help address water scarcity operate in mission-critical, high-barrier markets with attractive revenue potential. Their services are vital to municipalities, industries, and utilities and align with global sustainability goals. As water scarcity intensifies and regulation tightens, these companies are well-positioned, in our view, to address global challenges and offer compelling long-term investment opportunities for patient investors.

¹ United Nations (2016). .
² Armstrong M. (22 March 2024). . Statista.
³ Wilson Center (11 April 2023). .
⁴ United Nations (March 2025). .
⁵ European Environment Agency (15 May 2024). .
⁶ Roser M. and Ritchie H. (2023).
⁷ USGS Water Resources Mission Area (1 March 2019). Agricultural Contaminants
⁸ Bluefield Research (28 April 2025). .Ìý
⁹ Wilson Center (11 April 2023): Infrastructure and Management Vital to Meeting Global Water Needs.
¹⁰ World Health Organization (13 September 2023). .
¹¹ UNICEF (August 2025). .
¹² World Bank (3 May 2016). .
¹³ Robertson, C. (December 2014). .
¹⁴ IDEXX Laboratories (n.d). .
¹⁵ U.S. Environmental Protection Agency (3 October 2024). .
¹⁶ ALS Global (n.d). .
¹⁷ Thermo Fisher Scientific (n.d). .
¹⁸ Halma (n.d.). .
¹⁹ Intertek (n.d). .