@import url('/i/ne/sr06/israel/israel_tech.css'); Technology's promised land / Industry, investment thrive in Israel despite violence Water wizards of the desert By Michael Kanellos Staff Writer, CNET News.com August 10, 2006 4:00 AM PDT HERZLIYA, Israel--Etyan Levy builds apartment complexes for bacteria. His company, AqWise, is one of this country's breakout start-ups in the expanding market for water technology. It has devised an intricate polymer cylinder that, when placed in wastewater treatment ponds, clusters microbes that consume contaminants. The water can then be safely discarded or used to irrigate fields. "They grow naturally. We just provide the microbes with the right environment," CEO Levy said of the system, which obviates the need for the supplemental ponds used in traditional water treatment. "Our cost is about half the cost of an additional basin, depending on the cost of the land." Although it hasn't attracted as much attention as alternative energy, water has emerged as one of the more promising opportunities in the . The water infrastructure is several decades old in many parts of Europe and the United States, where new regulations are forcing municipalities to remove higher levels of ammonia and nitrogen compounds from their supplies than in the past. Upgrading the municipal water systems in the United States could cost $1 trillion over the next several decades, according to Ira Ehrenpreis, a partner at venture capital firm Technology Partners. But situations are far more dire in other parts of the world where fresh water is in short supply. One-third of the African population has no drinking water, a crisis that could lead to severe shortages in 17 countries by 2010, according to the African Water Association. Roughly half of the world's hospital beds are filled with patients suffering from water-borne diseases, said Kevin McGovern, chairman of venture firm McGovern Capital, quoting U.N. statistics. Groundwater supplies are sinking in parts of China, Bangladesh and even the Midwestern United States, according to various studies. "From a supply standpoint, 20 percent of the people in the world lack access to potable water," Ehrenpreis said. "There has been a threefold increase in the global population in last 100 years and a sevenfold increase in water consumption." Much of the activity in this field is taking place in Israel, where water has long been closely linked to national security, economic livelihood and, more recently, technology. In November, Ben Gurion University will host a U.N. conference on desertification. "Water is a sacred cow in Israel. It is like a gem," said Shlomo Waser, an Israel native who has worked for Philips, Advanced Micro Devices and other companies in Silicon Valley and now advises start-ups. For reasons of concern or capitalism, investors, start-ups and multinational corporations have intensified their exploration of the water market in recent years. One of the defining moments for the water industry came nearly two years ago when General Electric bought Ionics, a U.S.-based desalination company, for $1.1 billion. GE's rival, Siemens, quickly followed with its own acquisitions in purification, and in June it signed a research and development pact with Mekorot, Israel's national water company. Siemens estimates that the $40 billion water recycling technology market will double in the next eight to 10 years. All the major engineering colleges offer water programs, which often cross over into nanotechnology. Much of the current research revolves around developing materials and membranes that can filter out individual molecules and prevent bacteria and other organic solids from building up on the water's surface. At Technion, professor Carlos Dosoretz is devising a water purification system that can take sewage water and purify it for human consumption. The key to his system is a combination of sensor networks, purificiation filters and desalination. Typical purification systems don't filter out salts. As a result, Israel and other countries that have been using treated wastewater for irrigation are inadvertently salting their soils. "Water is a sacred cow in Israel. It is like a gem." --Shlomo Waser, start-up adviser Dosoretz also plans on filtering out medicine molecules from human waste that are only a few nanometers long. A few years ago, he said, medicines weren't recognized as a problem because the tools to monitor them didn't exist. "The quality of water is deteriorating decade by decade," Dosoretz said. "It is a worldwide problem. There are concerted actions in most developed countries." The water market can effectively be divided three ways: agricultural systems, desalination and purification. At present, purification seems to be the most active for start-ups, partly because of demand but also because of the novel ideas that are percolating. , for instance, has installed ultraviolet water purification systems in Israel's Coca-Cola plant and a local dairy. A couple of large dairies in Europe are now considering the technology. In Atlantium's disinfecting system, water passes through a specialized quartz tube that bounces beams of ultraviolet light through it, a process that kills billions of microbes more than conventional techniques. The 3-year-old company has raised $15 million so far.