The next great market opportunity: sanitation for India’s poor

If you’re inclined to take your toilet for granted, consider this. Half of all patients in hospitals in developing countries are there because of problems with water and sanitation. It’s a staggering health crisis that demands new ideas and new approaches. Last week we saw an encouraging sign that the sanitation issue is starting to get the traction it deserves: Delhi, India, hosted its first Reinvent the Toilet fair.

One problem is that flush toilets are impractical for billions of people. They require vast amounts of water and connections to expensive infrastructure, like sewer systems. Unfortunately, the current-day toilet works just well enough for rich people that no one seems to see the market for a new-and-improved toilet. That’s why we have been working with innovators from dozens of countries to reinvent the toilet so that it works for poor people.

The Next Great Market Opportunity: Sanitation for India's Poor

Last year, I went to New Delhi to talk to government leaders about this toilet initiative. They were very interested. More Indians have access to cell phones than to toilets that are clean and private. One consequence is a terrible diarrhea epidemic, which contributes to India’s huge burden of malnutrition and 200,000 deaths every year.

The Department of Biotechnology and other government agencies worked with us to put on the fair and showcase next-generation sanitation solutions. Solutions like toilets that need no water and convert fecal waste into electricity—or waste processing plants not much bigger than a shipping container that can turn thousands of gallons of fecal sludge into fertilizer.

It’s great to see India at the cutting edge on sanitation. When I joined Prannoy Roy last year for a taping of his TV show, he said people laughed at him 20 years ago for saying that one of the most important things India could do to be a better country is provide better toilets for women. Nobody’s laughing anymore. According to a recent World Bank report, inadequate sanitation costs India nearly $54 billion a year – equivalent to 6.4% of India’s GDP. Some smart people are starting to realize that on the flip side of this economic penalty is a big economic opportunity. As the World Bank report notes, improving India’s sanitation infrastructure could be a $152 billion market.

Just like any other sector, there is a value chain in sanitation. And all across this value chain—from the design of next-generation toilets that don’t require a sewer connection to the development of new markets for the collection and treatment of waste—there is amazing business potential.

India is especially well-positioned to lead in sanitation innovation. It is a proven leader in addressing difficult health problems, like eliminating polio. The country has a well-educated workforce and a demonstrated capacity for technological innovation. And it has a ready market of 630 million people looking for affordable sanitation solutions.

At the Gates Foundation, we see a lot of market failures—situations where poor people’s needs are ignored because it’s impossible to make a profit meeting them. India’s sanitation crisis is different. There is a desperate need. There are also billions of dollars to be earned. The toilet fair demonstrated that there is finally a wealth of innovative thinking about solutions. It will be fascinating to watch this market develop in the next decade.