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A Critical Analysis of Technological Innovation and Economic Development in Southern California's Urban Water Reuse And Recycling Industry


Southern California's urbanization was accomplished through the technologically-aided harvesting of faraway water sources. Today this is too expensive, environmentally damaging, and politically unpopular. Southern California utilities have begun shifting to a strategy of conservation and the development of local sources such as groundwater, desalination, or recycled water. Progressive local water agencies have built advanced water reuse infrastructure projects like Orange County Water District's (OCWD) Groundwater Replenishment System (GWRS), the world's largest and most technologically advanced indirect potable reuse project. At the same time, the region has been mired in a prolonged multiyear economic downturn, leading many observers to advocate economic development through nurturing environmentally sensitive "clean tech" industries. This thesis investigates the Southern California water industry and, specifically, the regional innovation system that has generated major breakthroughs in water reuse technology and infrastructure that has come about due to OCWD's--and others'--early investment in reuse research. Using an analytical framework derived from economic agglomeration scholarship, innovation systems literature, and an international case study analysis of the water technology innovation systems of Israel, Singapore, Netherlands, and Australia, this study employs qualitative interviews, industry analysis, and a case study of the GWRS project to investigate the regional water industry. It finds a strong local industry--often led by a forward looking state government--with auspicious growth prospects, but with significant local impediments including overly fragmented markets and consumers, hidden price subsidies, confusing legal institutions, agencies with misaligned incentives, lackluster private industry regional promotion, and unproductive interagency competition. Today other regions throughout the world, even neighboring Northern California, are rapidly growing their water technology expertise--occasionally at the expense of Southern California. More effective regional governance and better private sector cooperation would further strengthen the region's already robust industry, accelerate the local creation of technological innovation, and manage limited regional water supplies more effectively.

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