Circular economy could bring 3m more jobs to EU by 2030

Expansion of the circular economy could create 3 million extra jobs and reduce unemployment by 520,000 across EU member states by 2030, according to a study released today (9 September) by the Waste & Resources Action Programme (WRAP).

‘Economic Growth Potential of More Circular Economies’ details the employment potential for each member state, the industries that would support it, and the skills that would be require to do so.

The study expands on a report WRAP published earlier this year, ‘Employment and the Circular Economy – Job creation in a more resource efficient Britain’, which focused on the potential employment benefits of an enhanced circular economy in the United Kingdom.

According to WRAP, it is currently estimated that there are 3.4 million people employed in the circular economy, including in the repair, waste, recycling and rental sectors, across the European Union (EU).

Of this total, says the study, 1.2 million jobs are in repair of machinery and equipment, 0.4 million are in repair of computers and other household goods, 0.7 million are in waste collection, treatment and disposal, 0.3 million in the recovery of sorted materials and wholesale waste and scrap, 0.1 million in in-store second-hand retail and 0.6 million in rental and leasing activities.

According to the figures, Latvia, Lithuania and Estonia are the three member states that currently have the highest proportion of circular economy jobs, due mainly to the retail of second-hand goods.

Potential employment benefits of circular economy

Scenarios considered in the report illustrate the potential of an enhanced European circular economy, which the European Commission’s Circular Economy Package, due to be presented before the end of the year, hopes to bring about.

With the current development path, WRAP estimates that by 2030, expansion of the circular economy will have created an extra 1.2 million jobs and reduced structural unemployment by around 250,000.

According to the estimate, Germany would create the most jobs (328,000), with the UK in second (210,000) and Italy (154,000) in third.

However, the study imagines a ‘transformational expansion’ in the circular economy, which reinvents how we design, produce and sell products, reconsiders how we consume products and redefines what is possible through reuse and recycling.

With this change, the study projects that an additional three million jobs could be created by 2030, with a reduction in structural unemployment of around 520,000.

This change, it says, would offer ‘geographically dispersed’ employment in a range of occupations, as well a strong potential to offer more lower-skilled jobs in remanufacturing and recycling activities.

Every EU member state apart from Germany recorded a higher unemployment rate in 2014 than in 2008. Eurostat figures show that of the 28 member states, 13 have unemployment rates of 10 per cent or more, the highest being Greece (26 per cent), Spain (24 per cent) and Croatia (17 per cent). Across the EU, this adds up to an average unemployment rate of 10 per cent,

The paper reads: ‘Together with substantial environmental benefits, a growing circular economy offers the potential to create jobs through lowering structural mismatch in high unemployment regions in Europe.

‘Growth of the circular economy involves using more labour and fewer resources to increase efficiency in economic activity.’

Job creation enhances need for ambition in circular economy

Commenting on the study, Liz Goodwin, CEO of WRAP said: “Providing the bigger picture for the jobs potential from the circular economy for each individual member state makes the case for the EU to adopt an ‘ambitious’ circular economy package even stronger.

“This added layer of detail is the missing piece of the jigsaw that shows how the circular economy supports the themes of the commission’s wider plan for job creation and growth. It’s clear that many countries could see considerable benefits which could improve the jobs market, the economy, as well as the environment.” 

Read WRAP’s File 'Economic Growth Potential of More Circular Economies' report.

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