CEO Insights: Jonathan McKeown, Chief Executive, Australian Water Association

What do you see as the single biggest challenge facing the water industry in the year ahead and why?

If Australia enters into another period of drought, making sure we provide water security and quality for all Australians will be the biggest challenge faced by the water sector. We need to get water security right in drought conditions, and to do this, a number of things have to happen. We need a new investment model to drive investment in infrastructure, renew ageing assets and expand networks — we have roughly $150bn worth of urban water assets alone that need between $3.5–$4.5bn of capital expenditure every year*; we need to investigate what roles alternative water sources such as desalination and recycled water have to play; and we need to make sure we have community support and buy-in to adapt to the changing water demands of a drought. We also need to secure the water needs for the next 50 years by ensuring we invest the right funds in the right infrastructure.

In our annual State of the Water Sector survey (a national survey which canvasses the views of the water sector), 72% of respondents considered there was potential for more private sector involvement in the sector, and in particular, the areas identified for growth were desalination plants, wastewater treatment plants and water treatment plants (interestingly, more than half of the sector believes that prices wouldn't go up with more private sector involvement).

What emerging trends or developing technologies may influence or change the way your industry sector will do business in 2016 and why?

There are two major trends that spring to mind immediately. The first is an increase in partnerships with the private sector, which actually feeds into the need for a new investment model that I mentioned above. If we just look at our urban assets, they will need to accommodate up to another 8m people by 2061. We also need to replace old network infrastructure with smarter, innovative infrastructure capable of the vertical expansion of our cities, and the private sector is going to play a key role in this.

The second is the growing dependence on big data. Increasingly, it is analysis of big data that is used to determine policy and investment decisions, and we need continuing investment in big data analysis — including in organisations such as the Bureau of Meteorology — to inform policy and investment decisions, and to drive improved performance through comparison. This will mean better engagement with customers and improved services through real-time data, with the potential to drive public health, environmental and broader liveability projects.

What external impacts do you predict will have most impact on your business in 2016?

Climate change and the impending drought caused by an intense El Niño will have a major impact on the water sector. This is driving the need for improved and diversified supply resilience strategies, and we need to optimise the supply and demand balance of stormwater capture, desalination and managed aquifer recharge now, not when the next drought is upon us.

The second biggest external factor impacting the sector is how the government is going to manage the competing priorities in water infrastructure investments to balance the opportunity to develop North Australia and the opportunity to augment water in Australia's urban and developed agricultural regions. More than ever, Australia needs a national water plan which is underpinned by nationally consistent regulation to address water security and water supply into the future.

Want to hear more about Australia's water sector, its challenges and the opportunities for innovation and business? Join us at Ozwater'16, the country's premier water conference and exhibition.

*Doing the important, as well as the urgent: Reforming the urban water sector, WSAA, November 2015

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Jonathan McKeown commenced work as Chief Executive of the Australian Water Association at the end of May 2013. Jonathan graduated from the Australian National University with combined Arts/Law degrees in 1983. Jonathan commenced his career as a commercial lawyer with Mallesons solicitors in Melbourne. In this capacity he worked in a variety of areas including mergers and acquisitions, mining and resources, and finance and banking. He then transferred to business gaining 25 years of commercial experience in establishing and consolidating businesses across Asia and the Middle East.

Jonathan has advised more than 200 companies in developing business in Asia while managing offices in Bangkok, Jakarta, Tokyo, and Amsterdam. His international project management skills have been acquired through significant development projects (including water projects) across Asia and The Middle East — all requiring regular interaction with senior levels of governments, the World Bank and the Asian Development Bank.

Management experience in industry associations has been acquired in roles that include Director of Trade Business Services at the Chamber of Manufactures (now known as Australian Business Chamber) and Chief Executive of the NSW Farmers Association.

As a management consultant, Jonathan has been based in Bangkok for the last seven years, specialising in productivity improvement, strategic planning, corporate restructures, and acquisitions and joint ventures across Asia and Australia. He brings detailed practical experience of the challenges of conducting business across borders and cultures with a direct exposure to the fast-changing demands of the Asian markets.