Innovation in the Water Sector in France

The sector of supplying environment-related services is large, complex, political and characterized so far by low market competition. The French water sector is essentially locally organized and managed within a high national and supranational regulatory framework. For years, the sector has stayed the same and was immune to changes and politicized in its decision making. Therefore, in the last three decades, the water industry starts progressively evolving under national and supranational regulatory processes. Innovation in the water sector is long overdue in France despite its extensive technological experience. New water-related technologies faced sometimes policy-related barriers making the implementation of these technologies difficult. Some technological changes have been implemented but this has been confined to the treatment of water and wastewater. However, the last 3 decades has produced market improvement in the available “know-how” for planning and evaluating water resources. The increase in technical complexity of water management, due to higher environmental standards and service requirements fostered both soft and hard innovation in the French water sector. Therefore, the design of the regulatory framework should be sufficiently stringent to encourage efficient innovation, stable enough to give investors’ confidence, flexible enough to foster genuinely novel solutions, and provide incentives for continuous innovation. Thus, policymakers could (and should) play an important role in framing innovation-oriented regulation. This needs to assess the appropriateness of regulatory policy.