Political Environment

The political environment surrounding water and sanitation companies affects every business that they initiate. The political domain includes governmental actions at the city, state, national and international level, as well as legislation and executive orders. The political stability of a country is of main interest for entrepreneurs, as national crises, wars and civil disturbance can make chances of succeeding vanish in a short period of time (see water conflicts). On the other hand, if your business consists of providing water and sanitation services during emergencies or crises, the instability of a country could mean a business opportunity for you (read more about water purification in emergencies and sanitation in emergencies. Another important factor for water and sanitation entrepreneurs is with whom the responsibility for water and sanitation lies. Are the municipalities in charge of the provision? The state government? Or maybe the mandate lies at the national level? Depending on the level of the decision maker, you might need to define who your customer is and what the marketing approach you take will be.

The water and sanitation situation is extremely different from country to country. For instance, in Andean countries such as Peru, Ecuador and Bolivia as well as Central America, water and sanitation services in rural and peri-urban areas are mostly in the hands of the civil society, with more than 80,000 Community Organisations for Water and Sanitation Services. Here, businesses are only possible if you as entrepreneur collaborate with the communities and support them (learn more about deciding and planning with the community). In India, there is a National Policy for Urban Sanitation that has made it compulsory for cities to define their City Sanitation Plans and describe action plans to attain their objectives. This opens a great deal of opportunities for water and sanitation entrepreneurs who can offer different services, such as engineering, consulting, baseline studies, trainings, marketing campaigns, and many others. Visit the STEP on Support to the National Urban Sanitation Policy in India for more information.

Other political factors include laws and regulations regarding taxes, invalid link, tariffs, entry mode, corruption, trade, pricing, anti-trust laws, repatriation of profits, employee rights and benefits, and intellectual property rights. In any case, you must keep in mind that the water and sanitation sector is a very political arena, and you need to be very well informed about the new trends in the countries where your start-up operates. There are many different political factors you should start thinking about for your own start-up and what could affect your new business. You should definitely read the national and local newspaper daily to identify potential opportunities and threats. Other sources of information include public opinion leaders, social critics, futures-oriented research institutes, public policy research centres, governmental documents, proposed bills to the legislature, and statements or opinions by social critics, experts, and activists.

To learn more, read about the tools you can use to create an enabling environment for your business in water and sanitation.