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Knowledge for policy

Competence Centre on Foresight

We foster a strategic, future-oriented and anticipatory culture in the EU policymaking process.

  • Page | Last updated: 14 Apr 2020

Impact of shift to circular economy

Foresight
  • Circular economy can bring a positive net effect on job creation, provided that workers acquire the skills required by the green transition. By moving towards a more circular economy, GDP in the EU could increase by almost 0.5% by 2030 compared to the baseline case. The net increase in jobs will be approximately 700,000 compared to the baseline through additional labour demand from recycling plants, repair services and rebounds in consumer demand from savings generated through collaborative actions. Already between 2012 and 2018 the number of jobs linked to the circular economy in the EU grew by 5% to reach around 4 million.
  • ILO estimated a global net increase of jobs between 7 and 8 million by 2030 due to shifting towards circular economy, as compared to business-as-usual.
  • Jobs will be created in green sectors on the detriment of “brown” sectors, leading to positive environmental footprints. The substantive reduction in employment is expected e.g. in construction sector due to improvements in labour productivity because of introduction of new modular construction techniques; job losses might be experienced also in more traditional industries e.g. providers of raw materials.
  • Circular Economy requires very heterogeneous education levels and skills. Transitioning to a circular economy may influence demand for skills e.g. recycling and reuse require a relatively high ration of low-skilled employees; remanufacturing and biorefining, more medium- and high-skilled employees. ILO estimates that 2 per cent of workers will require reallocation and reskilling.
  • The transition towards a more circular economy will have uneven geographical impacts, affecting the most the labour market of those EU regions where industrial employment is highly concentrated.