Europe’s digital water solutions market, the world’s largest in the sector, is on track to double in size, growing from US$13.7 billion in 2024 to US$27.2 billion by 2033, according to a new report from Bluefield Research, a leading provider of global water market data and insights. This growth, demonstrated by an 8.0% compound annual growth rate (CAGR), will drive a cumulative US$196.0 billion in spending from 2024 to 2033, highlighting European utilities’ increasing adoption of digital technologies and solutions to manage water infrastructure more efficiently.
The expansion of Europe’s digital water market signals that water utilities are prioritizing modernization, which signifies a shift toward more resilient water systems. “The business case for digital water solutions in Europe has strengthened, partly due to rising energy prices and increasing pressure on water utilities to reduce operational costs,” says Maria Cardenal, a Municipal Water Analyst for Europe at Bluefield Research. Energy prices in Europe have doubled over the past five years, driven by geopolitical conflicts such as the war in Ukraine. Digital water solutions that optimize energy use and provide real-time asset monitoring are improving utility operations.
The adoption of digital technologies in the water sector has been significantly boosted by funding initiatives from regional entities like the European Union (EU) and the European Investment Bank. These measures have pushed water utilities to leverage real-time data collection and management tools to address water supply risks. Southern European utilities, in particular, are taking advantage of EU funding to modernize aging infrastructure, focusing on metering, leakage management, and broader digitalization investments.
- Italy is investing US$2.1 billion in leakage reduction.
- Spain has committed US$3.3 billion to digitalizing its water cycle, reflecting a regional push for efficiency and sustainability.
- The U.K.’s eight Asset Management Period (AMP8) is fueling growth in metering, leakage detection, and network optimization.
Exhibit: Europe Digital Water Forecast by Region & Solution Category, 2024–2033. Source: Bluefield Research
According to Cardenal, “The integration of more flexible, scalable, and data-driven technologies will be key to unlocking new water system efficiencies and capabilities.” As many European countries transition to 4G and 5G networks, the improvement in interoperability, connectivity, reliability, and real-time data capacity will translate across water systems.
Traditional systems like SCADA, GIS, and metering hardware still dominate digital water spending, accounting for over 75% of forecasted growth in Europe. In parallel, water utilities are increasingly integrating artificial intelligence (AI) and cloud solutions to enhance their data-driven intelligence activities to make networks more responsive.
EU-wide regulations on AI, data privacy, and water quality monitoring are also tightening compliance requirements, with the EU Network and Information Security Directive underpinning higher investments and spending in cybersecurity over the next decade. Bluefield forecasts that spending on cybersecurity, compliance, and data management in the water sector will grow at a CAGR of 12.2% from 2024 to 2033.
As utility demand intensifies, workforce and resource constraints grow, and compliance requirements increase, the business case for proven digital solutions will gain wider acceptance. This will, in turn, continue to drive greater competition across the vendor landscape.
“The digital water market is currently dominated by established water technology players like Suez, Siemens, and Xylem, but new market entrants are making inroads through strategic acquisitions and partnerships,” Cardenal notes. Traditional equipment providers like Diehl Metering, Grundfos, and Aliaxis are expanding into the European digital water space, while emerging startups are challenging the status quo, particularly with software-based solutions. This competitive dynamic underscores the high-growth potential of digital water solutions across Europe.
