Mark Twain once said “If you don’t like the weather, just wait a minute.”
The global system of economic trade is in the eye of a storm, being pummelled by winds gusting from all directions.
The weather is a complex system, which is why it’s notoriously hard to accurately forecast more than a few days out.
The global economic system is equally complex. Any water commentator who believes they can predict what is going to happen is at best a good pundit. The law of unforeseen consequences and chaos effect are at peak.
At BlueTech Research, we don’t generally do punditry, preferring fact based research and analysis. Punditry is fun for sports and politics.
We are fans of the Six Thinking Hats Analysis, which invites in different modalities of thinking, allows room for each, and was developed by Edward De Bono, one of the world’s most influential lateral thinkers.
The White Hat, is the utilitarian hat, it deals with the facts and the facts only.
There are a few self evident truths that can be used to build a thesis. We are building this thesis, layering in the different hats, and will have a Special Briefing late April to share insights.
White Hat:
- The market hates uncertainty. So expect a cautious and bearish market.
- Domestic Water consumption has an inelasticity to it that means demand does not drop significantly during a recession. It is a hyperlocal commodity, albeit the materials used to treat and distribute it, are part of a global market. Service based contracts and chemical supply contracts are a safe haven, though with limited ability to course correct for fluctuations in commodity prices.
- Municipal Water: capital projects are like super-tankers – they take time to slow down. What is being built this year and next year, was planned 2-3 years ago with funding already put in place.
- Industrial Water: Water is a lubricant in the global industrial sector. From potato chips to computer chips, without water the gears of the industrial machine stop turning. Near shoring and friend-shoring simply moves water demand from one place to another. So it’s a case of swings and roundabouts. The water footprint of a commodity, doesn’t change, except through water reuse and water efficiency.
- Corporate Water Stewardship – the goals are largely set and the general timeline is to achieve these by 2030, with many companies now at the deployment phase of the capital cycle, implementing solutions to hit targets.
- Existential inputs – the climate system is blissfully unaware of tariffs.
Next we will layer in the Black Hat (Caution), Red Hat (Gut feel), the Yellow Hat, (sunshine and optimism, looking for opportunities and benefits) and Green Hat, which represents creativity.
Because life isn’t about waiting for the storms to pass. It’s about Learning to Dance in the Rain.
We welcome inputs under any ‘hat’s and will distill, synthesise and share outputs. Reply if ‘interested’ to join.
