Research finds Europe’s digital water solutions market to double by 2033

Europe’s digital water solutions market, the world’s largest in the sector, is on track to double in size, growing from $13.7 billion in 2024 to $27.2 billion by 2033, according to Bluefield Research.

This growth is expected to drive a cumulative $196 billion in spending from 2024 to 2033, highlighting European utilities’ increasing adoption of digital technologies and solutions to manage water infrastructure more efficiently.

The figure comes courtesy Bluefield Research’s new report, Europe Digital Water Market Outlook: Key Drivers, Competitive Shifts, and Forecasts, 2024–2033.

According to the Boston-based research company, which advances strategies for utilities and organisations addressing the challenges and opportunities in water, the continent’s market expansion reflects water utilities prioritising modernisation and the shift toward more resilient water systems.

Commenting in a release was Maria Cardenal, a Bluefield Research analyst focused on the municipal water reuse market in Europe: “The business case for digital water solutions in Europe has strengthened, partly due to rising energy prices and increasing pressure on water utilities to reduce operational costs.”

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Europe’s digital water market growth

Bluefield Research cites rising energy prices in Europe, which have doubled over the past five years, driven by geopolitical conflicts such as the war in Ukraine. Digital water solutions that optimise energy use and provide real-time asset monitoring are thus improving utility operations.

Additionally, the adoption of digital technologies in the water sector has been significantly boosted by funding initiatives from regional entities like the European Union (EU) and the European Investment Bank.

These measures have pushed water utilities to leverage real-time data collection and management tools to address water supply risks. Southern European utilities, in particular, are taking advantage of EU funding to modernise ageing infrastructure, focusing on metering, leakage management, and broader digitalisation investments.

Bluefield cites countries like Spain and Italy, the former committed $3.3 billion to digitalising its water cycle and the latter investing $2.1 billion in leakage reduction. They also reference the UK’s eight asset management period, which is fuelling growth in metering, leakage detection and network optimisation.

As many European countries transition to 4G and 5G networks, the improvement in interoperability, connectivity, reliability, and real-time data capacity will translate across water systems.

Traditional systems like SCADA, GIS, and metering hardware were found to still dominate digital water spending, accounting for over 75% of forecasted growth in Europe. In parallel, water utilities are increasingly integrating AI and cloud solutions to enhance their data-driven intelligence activities to make networks more responsive.

EU-wide regulations on AI, data privacy, and water quality monitoring are also tightening compliance requirements, with the EU Network and Information Security Directive underpinning higher investments and spending in cybersecurity over the next decade.

Bluefield’s research forecasts that spending on cybersecurity, compliance, and data management in the water sector will grow at a CAGR of 12.2% from 2024 to 2033.

As utility demand intensifies, workforce and resource constraints grow, and compliance requirements increase, the business case for proven digital solutions will gain wider acceptance. This will, in turn, continue to drive greater competition across the vendor landscape.

Added Cardenal: “The integration of more flexible, scalable, and data-driven technologies will be key to unlocking new water system efficiencies and capabilities.

“The digital water market is currently dominated by established water technology players like Suez, Siemens, and Xylem, but new market entrants are making inroads through strategic acquisitions and partnerships.”

Traditional equipment providers like Diehl Metering, Grundfos, and Aliaxis are also expanding into the European digital water space, while emerging startups are challenging the status quo, particularly with software-based solutions.

This competitive dynamic underscores the high-growth potential of digital water solutions across Europe.