The water sector in Scotland: market size research – turnover, jobs, exports and gross value added

The report aims to understand the water sector in Scotland – turnover, jobs, exports and gross value added (GVA). It covers current R&D activity, current and historic economic performance, expected future performance, plans for growth and related drivers and barriers.

The methodology consisted of a survey of 123 companies, mostly telephone surveys.

The water sector in Scotland provides 16,600 direct jobs and has a turnover of £3.7 billion. It generates £1.7 billion of GVA for the Scottish economy. Scottish Water and one other larger water retailer generate approximately half of total water sector turnover but only 28% of jobs and 44% of GVA. The remainder is generated by the supply chain providing water sector technologies, products and services, water processing companies focusing on bottled water production, and the generation of hydroelectricity. There has been significant growth in the water sector in Scotland over the past three years in turnover (29%), jobs (23%) and exports (28%). Some of the growth in the water sector supply chain turnover has been driven by increased capital expenditure by Scottish Water over the period. However, only 54% of water sector sales are to water utilities with the remainder coming from sectors such as oil & gas, distilleries/breweries/other drinks manufacturers and the public sector (mainly NHS and local authorities), so growth has also been driven by increased demand from non-water utility customers. The value of exports of water sector products and services is £170 million. Approximately 30% of water sector companies currently export and others have indicated an intention to do so in the future. Companies operating in the water sector have over 1,000 Full Time Equivalent staff working in R&D and Innovation. This is indicative of an innovation active sector. Over 60% of companies in the water sector have plans for growth. The most common activities planned to support this growth are skills development, marketing & sales, investment and innovation.

From the perspective of Scottish Enterprise, potential areas to consider include: investigating options to support the sector to address the innovation challenges of non-water utility customers; working with Scottish Development International to help existing and new exporters to target opportunities in the Middle East and the UAE in particular; working with other public sector partners to identify how to best support water sector companies overcome issues around the availability of skills and further improve the attractiveness of the sector as a career destination; and investigating options to support water sector companies to increase awareness and capabilities in digital marketing tools and practices. When communicating with companies in the water sector, it is important to recognise that a significant minority self-identify as being part of other sectors such as oil & gas, construction, etc. This has implications for the way in which any interventions are communicated to ensure they are perceived as being relevant to the target audience.