The sanitation economy: a path to cleaning a sh*t sanitation system
Authors: Anita Jiang (President of MMI) & Rishi Madiraju (S&P Officer)
As normalcy seems to have resumed in Australia, the same cannot be said about our companions across the Indian Ocean. A country that had seemingly restricted the spread of this rampant virus now finds itself completely overwhelmed. As each day progresses, coronavirus cases are soaring, there is a significant shortage of oxygen tanks and mortality rates are devastatingly on the rise. How did India reach this dire situation?
India has a problem with toilets. It doesn't have enough of them.
As a result, hundreds of millions of people in the country are forced to defecate openly. Not only is this practice an indignity, it also accelerates the spread of diseases including cholera, typhoid and COVID-19. Whilst achieving universal access to toilets has improved, safely managed sanitation is one of the most pervasive challenges facing us in the 21st century - it is overlooked and often treated as a taboo topic.
Though overpopulation and the lack of precautionary measures can be blamed for the current surge in cases, this second wave has also shed light on the lacklustre emphasis placed on sanitation and hygiene.
Around 2.3 billion people worldwide still do not have access to rudimentary sanitation facilities. (Reuters: Amit Dave) Source: https://www.weforum.org/agenda/2019/04/india-sanitation-waste-management-sewage/
Waste generation and its management
More than a tenth of the world’s waste is generated by India. In 2016, India was estimated to produce 277 million tonnes of solid municipal waste, with this total projected to double by 2050. Current systems cannot cope with the volumes of waste generated by a rapidly increasing urban population. The open dumping and overflowing landfills are sources of serious pollution and health hazards, affecting both the surface and groundwater.
Lack of access to basic sanitation facilities
Around half the population of India, approximately 564 million people, defecate in the open. Rapid transmission of diseases occur when flying insects land on deposits and carry the viruses everywhere or when excrement contaminates water supplies. India’s children are especially vulnerable to this sustainable health hazard with at least 166 children under the age of five dying every day because of diarrhea caused by pathogens in dirty water.
So, in one of the world’s fastest growing economies, how can we make sure millions of people aren’t left behind?
Indian PM Narendra Modi sweeps a pavement at Valmiki Basti before the formal launch of the ‘Clean India’ drive at Rajpath. Source: https://www.dnaindia.com/india/report-swachh-bharat-abhiyan-clean-india-is-responsibility-of-all-125-billion-indians-says-pm-narendra-modi-2023027
In 2014, the Government of India launched its most significant cleanliness campaign called the Swachh Bharat Abhiyan. This flagship programme aims to stop open defecation through promotion of better hygiene practices. In contrast to past efforts, Swachh Bharat includes a much larger component of promotional campaigning and educational material to stigmatise open defecation and change behavioural factors. Over the past seven years, the government has made huge strides in investing over $30 billion on the construction of infrastructure and facilities such as the construction of over 100 million public toilets, especially in rural areas.
However, social and cultural behaviours remain barriers to the Indian Government’s original goal to achieve a ‘clean India’ and end open defecation by 2019. According to common customs, public toilets are often deemed unclean and many people in India still see open defecation as a more sanitary option than using a bathroom in or near the home. Additionally, India has often failed to properly maintain and clean public toilets after they are built, leaving new toilets unused or instead functioning as storage rooms.
What is the Sanitation Economy?
The sanitation economy targets a large market of people without access to safe hygiene practices.
The World Bank has identified that a centralised sanitation system in countries with little to no existing infrastructure can cost the government and accompanying businesses US$260 million. In light of this costly reality, the Toilet Board Coalition (TBC) brings together business solutions to help deliver universal access to sanitation (Sustainable Development Goal 6.2). Through promoting a circular economy approach, the TBC aims to transform sanitation from an unaffordable cost to a revenue generating market opportunity.
The Sanitation Economy refers to a dynamic marketplace of products and services, renewable resource flows, data and information that has the potential to achieve universal access to safely managed sanitation. By leveraging existing business models, established businesses with scale and innovative technologies, the Sanitation Economy aims to create a cost-effective and renewable solution to the sanitation crisis in order to catalyse economic growth and to mitigate a societal issue tormenting the impoverished.
Highlighting just India, the current sanitation economy is estimated to be a US$32 billion a year market – a number that’s expected to increase to US$62 billion per year by 2021. This collaborative solution allows for the government and associated businesses to provide toilet and waste management services abetted by the market at a fraction of the cost to the government and create revenue generating opportunities for businesses. Considering the predicted growth in the sanitation economy market and the benefits for both the government and businesses, it is understandable why the sanitation economy has gained so much traction.
Could this be the solution that the Indian government is looking for?
The pace of change and progress under the Swachh Bharat Mission in conjunction with the size of this challenge presents enormous market opportunities for the Sanitation Economy in India.
Building upon a foundation established by the government, the Sanitation Economy introduces community-based solutions that are government supported and commercially operated. Notably, India boasts a huge number of dynamic entrepreneurs and a burgeoning startup landscape - ideal conditions for a new marketplace for innovation.
The Toilet Economy
The Toilet Economy aims to reinvent the product and service offerings for toilets by creating a marketplace where toilet supplies are safer, more accessible and renewable. This marketplace will regulate the quality of products and increase the number of facilities available to the lower socio-economic population, through business partnerships all with the common goal of fixing the sanitation crisis. By producing high-quality toiletries at scale, the rural areas of India, where open defecation is mostly practised, can contain the spread of bacterial and viral infections by using safer facilities. Communal bathrooms, portable toilets and household toilets are some of the products offered as part of the Toilet Economy.
“$ 7 million public expenditure can
unlock $ 75 million in commercial
investments and yield $ 130 million
in new value.”
Furthermore, the market for the maintenance, repair and cleaning of these toilets was expected to reach $14 billion in 2021. There is great potential for Indian entrepreneurs to support the usability and accessibility of toilets, paving the way for a cleaner, more hygienic India. This market is driven by an individual perception of sanitation, health and hygiene as well as the government’s goal to increase ownership and use of toilets.
The Circular Sanitation Economy
The Circular Sanitation economy utilises waste management systems to derive value-adding products such as renewable energy, proteins, fertilisers, nutrients and water to maximise our current resources. Biological waste that is extracted from the sewerage system is processed and converted into a reusable form, thus forming a circular economy. Biological waste was not initially harnessed but as its worth started to become recognised, businesses found an opportunity to monetise it.
The sheer amount of biological waste generated in India provides enormous scope to manage waste through transforming its recovered nutrients and water to value-adding products such as renewable energy and proteins. Organic fertiliser is a key example of an agricultural product that can be produced using solid waste. Following new government directives that support the production and purchase of organic compost, the market potential of compost was estimated in 2017 to reach $2 billion in 2021.
Additionally, a growing number of farmers in India are switching to the use of organic fertilisers which has been found to cut cultivation and input costs by up to 70%. A study conducted by the TBC in 2016 found that low income countries have biological materials making up the largest proportion of the countries’ waste. As such, countries such as India should explore monetising biological waste in order to reduce waste and limit the consumption of finite resources.
The Smart Sanitation Economy
The Smart Sanitation Economy refers to the digitisation of the sanitation business model to maximise efficiency and to expand opportunities for both businesses and citizens. As such, businesses will aim to apply their smart solutions to improve existing infrastructure and their service delivery methods in order to elevate the current user experience. This digital shift attempts to rejuvenate the current user experience to prompt more people to continually use the safe facilities but to also optimise the business processes.
Health Data Analytics Institute raises $16 million to launch an AI platform. Source: https://venturebeat.com/2020/03/03/health-data-analytics-institute-nabs-16-million-for-ai-platform-that-predicts-outcomes/
Whilst the Smart Sanitation Economy has been recognised as the least developed economy of the three market opportunities, the digitisation of sanitation has the potential to drastically lower sewage management costs. The use of new smart, digital and Internet of Things (IOT) technologies increases efficiency in sanitation business models such as customer relationship management, collections and transport. Subsequently, the extraction and sharing of large amounts of data delivers a better understanding of sanitation usage and when there is a need for the maintenance of toilets. An example is a product offering known as Health Data, a technology that analyses the blood, faeces and urine to monitor and provide personalised feedback on the client’s current health situation.
Digital healthcare is a growing area of potential within the technologically driven sanitation economy. As citizens become more aware of underlying healthcare drivers and better lifestyle choices, there is an increased demand for a wider range of better healthcare options as access to disposable income increases. Within the digital healthcare model, analytics has the potential to draw immediate prescriptive and predictive insights from patient data. Additionally, remote monitoring not only removes the constraint of physical proximity, enabling remote consultation with specialists, it also acts as a channel for essential healthcare education to help prevent diseases.
A focus on proper hygiene has become more critical than ever during COVID-19. As India finds itself in the midst of a humanitarian crisis, the sustainability of this sanitation ecosystem will require innovative business solutions to address the burgeoning demand. Let’s shift the conversation on sustainable sanitation services from cost to value and from risk to opportunity. Beyond bolstering hospital capacity and health infrastructure, the best treatment of disease is prevention which starts with addressing basic hygiene.