Ongoing global climate change, growing population and the intensification of economic activities, increase pressure on water resources, a situation many see as a water governance crisis. Water-related issues are becoming a limiting factor for sustainable economic growth and require a collaborative and interdisciplinary approach, to foster innovative solutions. This paper provides an evidence-based contribution to understanding Triple Helix Model (THM) relations and the path to innovation policy in the water sector. The analysis focuses on the interaction between university–industry–government, with specific reference to the Murcia region in Southeast Spain. This region combines a chronic shortage of water and a leading role for agriculture. Starting from the experience of a researcher, working for the General Water Council of the Murcia Region, this paper is based on both desk research and in-depth personal interviews with representatives of THM actors. In addition, a questionnaire was forwarded to all those companies in charge of providing water services in the Murcia region. The study has found that stakeholders are not fully cooperative in seeking innovation. The main challenges are the renewal of water-related facilities and the improvement of remote control systems, denitrification and desalination technologies and achieving better energy efficiency. To this aim, THM approach is suggested as a source of local innovation policies, identifying a series of tools to foster a collaborative approach.