New strategy for Midwest: Use water to lure industry

Chicago has signed a contract valued at $1 billion to sell its water elsewhere — the first such deal in 40 years — and the city expects more to come. Illinois is also launching a federally funded plan to expand its $17 billion “Blue Economy” to lure companies from water-intensive chip manufacturers to climate-tech startups.

The Great Lakes, which account for more than 80% of North America’s surface fresh water supplies, are increasingly becoming a key selling point. As President Joe Biden pushes advanced manufacturing and environmentally friendly infrastructure, the Midwest is poised for a muchneeded economic boost.

“We have this water that is critical,” said Alaina Harkness, executive director of Current, the nonprofit water innovation hub behind the plan. It’s important not just for the region’s climate and residents, but it’s also a critical supply-chain component for manufacturing, food and beverage companies, data-processing and storage centers and chipmakers, she said. “Not having access to it is a risk for businesses.”

Midwest cities have struggled with the decline in traditional manufacturing over the decades as factories moved offshore for cheaper labor and resources. Biden wants to bring back advanced industrial and infrastructure investment — with a focus on clean energy as well as $55 billion to improve drinking water and wastewater systems.

As a result, Illinois aims to replace its Rust Belt label with a clean-belt economy by 2030, according to the Current report. The region has the vast amounts of water and space needed for businesses from wind farms to chip manufacturing.

“A lot of industries — be that electric vehicles or food, life sciences — they have a lot of water needs,” said Michael Fassnacht, head of World Business Chicago and the city’s chief marketing officer. “Corporations, as well, will look at climate resilience and water safety, so being next to water is a massive, massive factor.”

To be sure, the Midwest has yet to see a huge influx of businesses due to its ample water supplies. Companies also take into account other factors when choosing to relocate, but questions about water and energy supplies have increased in recent years, Fassnacht said.

There are also concerns about how to tap water as a tool for economic development without depleting the resource.

Start-ups are also taking notice. The opportunity was attractive enough that Seyi Fabode decided to start Varuna four years ago, after leaving the power sector. The company has offices in Chicago and Austin and tracks water-related risks such as the potential for lead contamination or bursting pipes.

“Water was becoming the next big thing,” Fabode said. “Austin had a water problem, Flint had a water problem, and I felt there was an opportunity to use my expertise.”