Job creation for every EU nation

October 5, 2015

Guest blog post from Dr. Liz Goodwin, CEO of WRAP.
“The environment and the economy are really both two sides of the same coin – if we cannot sustain the environment, we cannot sustain ourselves”, is what Wangari Maathi, the environmental and political activist once said. Wise words, and they’re still true of today, and the environment and the economy are two challenges faced by Europe that could have one solution to suit both.

As Karl Falkenburg, the European Commission’s outgoing Director General for the Environment said last week at RWM, Europe’s leading event for resource management professionals, Europe is one of the least well-endowed continents for natural resources. And whilst our natural resources are dwindling, there are also over 23 million people looking for work across the EU, demonstrating the need to address unemployment.

We have a situation where we need to create jobs, and preserve our natural resources. Some may see this as a challenge, but it can also be an opportunity. And the European Commission does have a golden opportunity at its hands – to lead the circular economy agenda to create jobs, reduce our reliance on the Earth’s natural resources and improve the economy.

The circular economy keeps resources in circulation for as long as possible. It offers an alternative to taking and extracting natural resources and then throwing them away. Instead it minimises use through design and then recovers, regenerates and reuses materials that have already been taken from the source, protecting virgin materials. This is done by a variety of ways at all points round the circle – for example, designing products for longevity, then reusing, remanufacturing and recycling. Then there are also the alternative business models – service based initiatives, and rental schemes which can include peer-to-peer ‘sharing’ based models such as ZipCar and AirBnB. These business models are better protected against material price volatility and fluctuations in the market.

Crucially, the circular economy can create jobs.

Job creation is one of the foundations of any successful economy, and a good economy relies upon employment opportunities for all. Recently, the Ellen MacArthur Foundation, the McKinsey Center for Business and Environment and SUN, recently reviewed 65 academic papers, all that indicated that there would be positive employment effects occurring from a circular economy.

This built on from work that was published earlier in the year by WRAP and Green Alliance, that looked at various circular economy scenarios for the UK, and identified that over 200,000 jobs could be created by continued uptake of the circular economy, and looked at where, and what skills in particular, could be needed.

Now, WRAP has gone one step further and applied this methodology to the 28 Member States across Europe – and the results are promising. WRAP identified that up to 1.2 million jobs could be created across Europe, and unemployment could be reduced by a quarter of a million on the current development path. And this study doesn’t just provide the overall picture for the EU – individual Member States are able to see the jobs potential for each nation. This is the first time that a report has been able to determine who could benefit, what skills would be needed and where in Europe the jobs could be created.

Many countries already have the right environment for the circular economy to flourish. Take France and Italy for example. Both have a growing market for recycling, but there’s also potential for expansion in renting and leasing, as well as service based models. This means that there are already the skills & occupations needed to grow the circular economy, and a receptive market that’s likely to welcome such developments. For example, France’s ‘sharing economy’ scene is going from strength to strength. Uber’s first European venture was in Paris, and OuiShare Festival has become one of the biggest events on the calendar for the sharing economy. The scenarios for 2030 indicate France could expect to see an increase of 135,000 jobs from expansion of the circular economy. And for Italy, around 154,000 jobs could be created. What’s more, jobs could be created in places where unemployment rates are high.

Overall with potentially 328,000 circular economy jobs, Germany came out as being the Member State with the greatest potential for job creation. Whilst they have one of the highest recycling rates in Europe, a culture of product rentals and a strong manufacturing sector, they’re in a good position to increase these activities. The UK also has the potential to increase jobs by 210,000. However, in contrast, the UK has some differences in terms of circular economy development. It’s yet to reach a recycling rate of 50% – an EU wide goal for 2020 for household waste, so the recycling and waste sector has further potential. The UK imports a lot of goods – growth in remanufacturing and re-use could also reduce its reliance on imported goods and by doing so, provide local jobs. Renting and leasing models could also benefit from growth.

The number of jobs that could be created across the EU is promising, and the numbers in individual countries reflects the relative size of those respective economies. So it’s not only large countries that can benefit from expansion in circular economy – in fact, quite the contrary. Some of the Baltic Member States could actually fare best. Considering the current number of jobs per 10,000 of the population, Latvia comes out on top in this study, closely followed by Lithuania and Estonia behind. These Member States already have employment potential and the infrastructure in place to benefit from growth of the circular economy. For example, they could increase the already strong market for trading in second hand goods. And some of those currently unemployed have the required skill sets for the jobs that could be created. And Latvia is a nation of just under two million, meaning the employment gains could be really be felt with 89 jobs in 10,000. This figure is above average, and job creation spans across the whole spectrum of circular economy activities.

The case for Europe to adopt an ambitious circular economy framework is growing, the momentum is building, and now we know what countries could really benefit from this work. I know that we’re onto a good thing with the circular economy – we don’t have a challenge to accept, we have an opportunity.

The study, Economic Growth Potential of More Circular Economies is available to view here: http://www.wrap.org.uk/content/economic-growth-potential-more-circular-economies