Douglas Millican, interim chief executive of Scottish Water, said the company was well positioned to export its services to overseas water companies, adding that a hydro nation had the potential to attract international firms whose businesses require access to plentiful water supplies in Scotland.
Mr Millican also said the construction which would follow from upgrading Scotland's water infrastructure would assist in boosting the economy, as well as "enhancing communications by laying broadband infrastructure in sewers".
However, he ruled out exporting water directly, claiming that while the industry in Scotland would be open to discussions, there would be significant challenges to overcome.
His claims, at the Hydro Nation, Global Ambitions conference at the Edinburgh International Conference Centre, comes as a Holyrood committee backs the Scottish Government's plans to create a framework for managing water resources.
Mr Millican said the roots of the hydro nation idea could be found in Scotland's industrial heritage "which utilised water to support commerce, from agriculture to pharmaceuticals, the textiles industry to our many distilleries".
He also pointed to contracts in the Middle East to help oversee management of a five-year drainage programme as Qatar gears up to host the 2022 World Cup, work in Poland, training to water industry staff in Alberta, Canada, and smaller projects in India and Ireland.