The worldwide demand for new water technology and management systems is constantly growing, in both developed and developing countries. For example, it is estimated that China alone will spend hundreds of billions of dollars over the next several years for wastewater treatment and infrastructure. Annual U.S.e government assistance for meeting wastewater standards in the U.S. is about $4.5 billion.

Companies and university researchers have begun to step up their development and export of efficient wastewater treatment and water supply technologies. One of the leaders in the field is the small nation of Israel, which recycles 60-65% of its wastewater.

Israel boasts the world’s largest desalination plant that is based on the highly efficient reverse osmosis method, and has authorized the construction of another large, reverse osmosis desalination plant. The country exported $1 billion in water purification and water management solutions in 2006, a 25% jump over the previous year’s figure, according to the Israel Export and International Cooperation Institute. At the same time, the country’s universities are seeking to develop new water management solutions.

Israeli startups and a few of the country’s more mature companies are developing water technology solutions that are drawing attention from some big players in the world. The Chinese, U.S., and Indian governments, as well as global Fortune 100 companies, have signed partnership agreements or contracts with several Israeli companies in the field.

All of this activity and attention has Israel’s industry leaders excited about the moneymaking potential of this new field. Promising Israeli water technology companies like AqWise, Yamit, Atlantium, and En Gibton may turn the country into the water technology’s equivalent of Silicon Valley, with $5 billion in water-related exports by the end of the decade.