Sylvie Feindt, Dunja Buchhaupt, KIZ Sinnova, October 2019
The circular economy is expected to be one of the biggest economic drivers. Relevant sectors to the circular economy employed already more than four million workers in 2016 and are predicted to create many more jobs in the EU until 2030. The increase is due to a shift in value added from resource-based capital gains to workers’ compensation and services and higher technology utilization. The following thinking space explores the state of the circular economy and its employment opportunities for NEETs.
The circular economy – a model for sustainability in resource use and consumption – is expected to be one of the biggest economic drivers (1). Relevant sectors to the circular economy employed more than four million workers in 2016 (2), a 6% increase compared to 2012. Recent estimates predict the circular economy to generate a net employment increase of about 700.000 jobs in the EU by 2030. (3) The International Labour Organisation (ILO) confirms that “…a low-carbon, resource-efficient economy employs more people, is more labour intensive, and is at least as productive as an economy with a production model based on high carbon, resource and material intensity. … this is due to a shift in value added from resource-based capital gains to workers’ compensation and services, higher technology utilization and longer value chains.” (4) This thinking space paper will take a closer look at the circular economy, as it seems a promising concept with employment opportunities for NEETs.
The circularity principle is not new and its regulatory framework is emerging in Europe. In some areas, such as remanufacturing of machinery, medical devices, heavy duty and off-roads or B2B electronics (5), the circularity is a longstanding practice. (6) However, the Global Circularity Report numbers the world’s circularity at only 9.1% circular in 2019. (7) A few governments have begun to apply the concept: for example, Finland has endorsed a circular economy strategy (8) and the Netherlands is aiming to become 50% circular by 2030 and 100% by 2050. (9) The EU has published a circular economy action plan (10) in 2015 and has been setting increasing recycling targets for Member States in waste regulations. EU Ecodesign measures contain repair requirements for household products that manufacturers have to comply with as of April 2021. (11)
Circularity requires optimization of the utility of products by maximizing their use, extending their lifetime, enhanced recycling, using waste as a resource and circular design, reducing material consumption and using lower-carbon alternatives. New jobs are predicted to be created in industries such as agriculture, renewable energy, construction, waste, repair and rental services and manufacturing that should deliver net gains. (12) By benefiting jobs in services, and if the gender distribution across sectors remains similar, the circular economy will, according to ILO, rise the female share of employment as well as highly skilled jobs. It will also result in a small increase in the numbers of own-account workers. (13) Emerging studies on employment in the circular economy, such as for the City of Amsterdam show that circular jobs types will differ according to the location. (14)
While today’s production processes rely on global supply chains, the Circular Economy is expected be much more local or regional as cost efficient repair, maintenance and services around a product will take place close to the consumer. Local jobs would be created that could not be readily outsourced to lower-cost markets, given the need for skilled workers to turn old goods into new resources, to collect and process recycled materials, and to source materials locally. (15) A report of 2015 finds for the UK that regions where unemployment is higher, such as the North East and the West Midlands, could see the greatest impact on job creation, especially among low to mid-skilled occupations. Drawing on various studies, the report pulled together the below table with employment types created in the waste and remanufacturing sectors in a circular economy. (16)
The Circular Economy has the potential to be more social and inclusive and strengthen community- based initiatives. There is already a multitude of local networking initiatives such as the wwoofers (17) repair cafes (18) or repair shops (19), local platforms where citizens exchange services (20), support young people (21) or tool-sharing platforms (22). These local community approaches could be a starting point for successfully supporting NEETs and guide on how to set up initiatives such as a tool library can be found online (23). In addition, NEETs supporting organisations should enter in a dialogue and cooperation with circular economy relevant sectors and organisations to help the young people to enter sustainable circular jobs.
(3) European Commission. 2019. Impacts of circular economy policies on the labour market. Available online via https://circulareconomy.europa.eu/platform/sites/default/files/ec_2018_-_impacts_of_circular_economy_policies_on_the_ labour_market.pdf
(4) ILO (2018), WORLD EMPLOYMENT SOCIAL OUTLOOK 2018. Greening with jobs, Geneva, p.38
(5) Mobile and fix telecom network equipment, datacentre equipment, etc.
(6) European Remanufacturing Network (https://www.remanufacturing.eu/case-study-tool.php),
(7) THE CIRCULARITY GAP REPORT Closing the Circularity Gap in a 9% World, 2019, https://docs.wixstatic.com/ugd/ad6e59_ba1e4d16c64f44fa94fbd8708eae8e34.pdf. In January 2019, the social enterprise Circle Economy released its second Global Circularity Report at the World Economic Forum (WEF) Annual Meeting.
(11) Publication of these measures is foreseen for the end of 2019. Measures can be found on the comitology registry of the European Commission.
(12) ILO (2018), p.51
(13) ILO (2018), p.53.
(15) Source: https://knowledge.unccd.int/publications/resource-efficiency-potential-and-economic-implications-smarter-use-natural-resources. “For example, between 2005 and 2010, a programme in the United Kingdom recycled or reused seven million tonnes of trash destined for the landfill. This move saved six million tonnes of carbon dioxide emissions, close to 10 million tonnes of virgin materials and 10 million tonnes of water. It also increased business sales by £176million, reduced business costs by £156 million and created 8,700 jobs.”
(16) WRAP and the Green Alliance (2015). Employment and the Circular Economy. Employment and the Circular Economy –Job creation in a more resource efficient Britain, online at: http://www.wrap.org.uk/content/employment-and-circular-economy.
(17) E.g. https://wwoof.be
(19) E. France: http://emmaus-france.org/, http://www.envie.org/; Greece: http://www.ecorec.gr/; Spain http://www.aeress.org/; Italy: http://www.insiemesociale.it/.
(20) E.g.: http://selunivers.be/
(21) E.g.: http://gpclimat.be/
(22) E.g. the Toronto Tool Library – https://www.ellenmacarthurfoundation.org/case-studies/how-tool-sharing-could-become-a-public-utility