The impact of the circular economy on jobs and skills

Preface

The transition to a carbon-neutral circular economy is in full swing. This development has been boosted by the European Green Deal and national targets. Road-map processes have been replaced by concrete efforts by companies and other organisations – which is a good thing, as the climate crisis and biodiversity loss will not be solved without a circular economy.

The circular economy will have significant impacts on work and, above all, the necessary related competence. Many companies are already engaged in a circular economy in many ways, but the change is not yet apparent in all sectors. This change means different things in different work tasks and sectors.

The sectors examined in this report – technology, construction and chemicals – are all at the heart of the circular economy. These sectors enable circular economy solutions in other industries, for example by developing new materials or offering digital solutions. Because of their large size, they also affect the value chains of other sectors.

With the rapid progress of the circular economy, competence needs will also change. This requires more education that develops circular economy competence, at all levels of educational institutions and in workplaces. In the near future, most of us will be required to understand the basic principles of the circular economy and professionals in different sectors must be able to apply the circular economy in their tasks.

There is already a shortage of experts in the circular economy and other sustainability solutions in many sectors. This issue can be addressed through education. The competence needs of the future must be identified today so that we can respond to the change in time. The circular economy cannot be built without competent experts.

As part of this report, we have assessed and anticipated the circular economy tasks of the future through practical examples. We hope that the report will encourage companies and sectors to consider the same questions: what kind of work will we do in the future and what kind of competence will it require? We cannot predict the future, but by anticipating different development trends and their impacts, we can prepare for different futures.

Helsinki, 17 January 2023

Eero Jalava
Leading Specialist, Sustainability solutions
Finnish Innovation Fund Sitra

Summary

The circular economy already influences jobs and skills needs, and will continue to do so in the future. The business environment is transforming rapidly as a result of climate change, biodiversity loss and the depletion of natural resources. Circular economy solutions help respond to these changes, as well as to tighter regulation, and create new business opportunities. This study examines the skills-related impacts of the circular economy in the chemical, construction and technology sectors.

All three sectors are at the core of the circular economy transition. They enable circular economy solutions by others: the chemical sector through new materials and processes, the technology sector through digital technologies that cross sectoral boundaries, and the construction sector, because of its large size, through its broad impact on value chains.

All of the featured sectors are undergoing major upheavals related to the circular economy, low-carbon solutions and sustainability. These rapid changes are also reflected in the skills required of employees. Jobs will be created and lost, and the content of most jobs will change. Job titles are expected to remain largely the same, but their content will alter. Employees will have a broader range of duties and teams that combine diverse competences and co-operation between different parties will become increasingly common.

The most important competence requirements will still be related to the core skills of each industry. Those basic competences will be complemented by task-specific circular economy skills acquired through learning on the job or supplementary training. In the chemical sector, the circular economy transition will require new skills, particularly in the processing and sourcing of recycled raw materials. To fulfil future skills needs in the technology sector, there needs to be an emphasis on circular economy design skills, digital skills and new combinations of skills. The construction sector will need life-cycle thinking from design to demolition, and co-operation between different ecosystem players and projects.

The circular economy itself is driving sectors towards new forms of co-operation that require networking, co-operation and influencing skills. Active dialogue and exchange of information between the various participants will enable a transition to a fair circular economy, where participants with different starting points all have the opportunity to benefit from circular economy solutions.

Introduction

The circular economy already has an impact on work tasks and competence needs, and it will continue to do so in the future as well. Jobs will be created and eliminated, and the content of most people’s work tasks will change as sectors move from a linear economy to the circular economy.

The circular economy does not continuously produce more goods and, instead, uses the value of the products and materials in use for as long as possible. The foundation of consumption is using services instead of owning things. Circular business models respond to resource scarcity by keeping materials and products in circulation for as long as possible and by avoiding waste and loss.

This report examines the impacts of a carbon-neutral circular economy on the competence needs of different professional groups in the technology, construction and chemical sectors. The aim is to focus on changes in the competence needs of professions in these sectors through concrete examples. The examples are presented as competence profiles that describe changes in the tasks of sector-typical professions and related competence in the next few years as a result of the circular economy. In other words, the competence profiles are descriptions of what work could look like in the next few years. The report and competence profiles support the sectors’ own foresight work on the development of competence needs and accelerate the transition to a carbon-neutral circular economy.

The report was produced by Gaia Consulting Oy. The process involved a review of current literature concerning circular economy impacts on employment and competence. In addition, three workshops were organised in spring 2022 to discuss the impacts of the circular economy on competence in the chemical, construction and technology sectors. Participants represented relevant industry associations, trade unions, the education sector, companies and municipal sectors. In addition, 23 company representatives from the three sectors under examination were interviewed for the report. The interviewed companies are listed in Appendix 1 to the report.

Sitra has been accelerating Finland’s transition to a circular economy since 2015. The transition to a circular economy requires a large amount of new competence. In fact, Sitra’s past efforts include funding four training pilot projects related to the circular economy. The competence needed for a circular economy has also been examined in a working paper entitled “How does the circular economy change jobs in Europe?” ( Jalava et al. 2021). The projects have demonstrated that the greatest work-related impact of the circular economy will be related to changes in the content of various jobs. In the future, everyone must be able to apply circular economy thinking in their work.

1. General overview of the employment and skills impacts of the circular economy

The circular economy will change and generate work

The circular economy is an operating model that aims to minimise the wasted materials generated in the linear economy and eliminate the related inefficiencies. New business models extend product life cycles and help keep materials in circulation for as long as possible. Circular economy solutions are key to curbing the climate crisis, biodiversity loss and overconsumption of natural resources. Evidence of the means offered by the circular economy to combat these crises has started to accumulate: one significant example is the potential for reducing emissions from heavy industry through the circular economy (Material Economics Sverige AB 2018). In addition, Sitra’s “Tackling Root Causes” report (Forslund et al. 2022) shows that the circular economy can simultaneously halt biodiversity loss and mitigate the climate crisis.

It is estimated that the transition from a linear system to a circular economy will have an impact on all industries. The operating environment of companies is undergoing a rapid change as a result of variations in the prices and availability of materials, the requirements of consumers and financiers and more stringent regulations. The impacts of the circular economy on the economy and the environment have already been researched, but its societal impacts have taken a back seat thus far (Jalava et al. 2021). The circular economy transition will have an impact on society as a whole, which means that different parties should be involved in planning the said transition (Jalava et al. 2021).

The circular economy transition will be expedited internationally and nationally through a number of initiatives and policy measures. At the European Union level, the European Green Deal will drive Europe as a whole towards a green transition and climate neutrality by 2050. The operating conditions of companies are particularly affected by the rapidly progressing EU taxonomy classification system, which steers the availability and price of funding towards new sustainable business models.

The EU Circular Economy Action Plan (CEAP), published in 2020, is one of the key elements of the European Green Deal, signalling the circular economy transition at EU level. The CEAP includes a set of ambitious measures to achieve objectives in value chains that are central for a circular economy: electronics, batteries, packaging, plastics, textiles, construction, food and nutrients (European Commission 2020). The CEAP emphasises the significance of product design, as the choices made during the design phase are estimated to determine the majority of the environmental impacts of a product (European Commission 2014). In the future, product design will be steered increasingly by new regulation at the EU level, such as the Ecodesign Directive, which defines the requirements for the design and development of products that consume energy, and the sustainable products initiative, which will extend the requirements of the Ecodesign Directive with the aim of promoting sustainable, repairable and recyclable products.

As a pioneer, Finland published a national road map to the circular economy under Sitra’s guidance in 2016. A large number of representatives from central government, business life, education and organisations participated in the preparation of the road map. The road map was updated in 2019. The 2021 national strategic programme to promote the circular economy, launched after years of work, strengthens Finland’s position as a pioneer and accelerates the transition from a linear economy to the circular economy. The programme’s vision is a carbon-neutral circular economy society as the foundation of a prosperous economy in Finland by 2035. Concrete objectives include doubling resource productivity and the circular economy rate of materials and reducing the consumption of non-renewable natural resources. The programme also aims to promote circular economy competence in the education system and industry expertise.

A circular economy based on material recycling accounts for approximately five per cent of Finland’s GDP (Ministry of the Environment and Ministry of Economic Affairs and Employment 2021). Finland has identified its strengths in the circular economy as being a high level of education, innovation activities, especially eco-innovations and cleantech, and strong digital competence (Trinomics 2021). Identified challenges include the low demand and supply of recycled materials, high material consumption per person and bottlenecks related to the circular economy and sustainable consumption. According to Sitra’s estimate, enhancing the circular economy of a few sectors alone offers Finland’s national economy a growth potential of €2-3 billion (Arponen et al. 2015). If the circular economy is made a strategic focus of industrial policy, the impacts will be considerably greater (Ministry of the Environment and Ministry of Economic Affairs and Employment 2021).

The impacts of the circular economy on work and competence will be significant. Jobs will be both created and eliminated and the content of most tasks will change (Jalava et al. 2021) as a result of the circular economy. It has been estimated that tasks will especially be eliminated from the initial stages of production chains, concerning jobs requiring a low level of education, whereas new jobs will be created at the end of the production chain in waste management and repair and maintenance services. The circular economy will increase the need for associated experts throughout all production chains (Trinomics 2021).

It has been estimated that the circular economy will create 700,000 new jobs in the EU by 2030 (Cambridge Econometrics, Trinomics and ICF 2018). Worldwide, the OECD estimates that the circular economy will generate 18 million new jobs by 2040 (Chateau and Mavroeidi 2020). According to an estimate by the International Labour Organization (ILO), 78 million new jobs will be created and 71 million will be eliminated as a result of the circular economy by 2030 (ILO 2019). The assessment of employment impacts is hampered by the poor predictability of technological development and countries’ very different starting points for the transition to the circular economy (Trinomics 2021).

Employment impacts and competence needs are also strongly influenced by the ongoing transition from fossil fuels to renewable energy sources, which is expected to be accelerated by the plan to abandon the use of Russian fossil fuels. This change is particularly reflected in the significance of metal and mineral recycling. Known mineral resources may not be sufficient for building a renewable energy infrastructure, such as wind and solar power. If a rapid transition to renewable energy is to be achieved, existing and new types of mineral recycling solutions must be significantly increased (Michaux 2021). An increased rate of recycling metals and minerals is expected to have positive employment effects.

New competence needs in addition to existing ones

The change in tasks will be reflected in the competence needs of different industries. In the future, new skills related to the circular economy will include processing recycled materials, designing products made from recycled materials and implementing business models based on the circular economy (Trinomics 2021). Digital competence applies to all industries, as transitioning to the circular economy requires the use of new, more complex tools and digital platforms. For example, digital product passports will provide information on a product’s life cycle, material content and repairability. The introduction of digital product passports is already being planned in several sectors. In addition, the transition creates a need for new combinations of skills and the ability to work in teams that include many types of competence (Jalava et al. 2021; Circle Economy 2020a). It is also likely that there will be a need to combine new circular economy skills with traditional industry competence as well as to ally various practical skills with academic competence (Circle Economy 2020a).

Changing and diversifying work tasks requires a fundamental change in mindset, which will not be easy for all industries or companies. An additional challenge is uncertainty about the competence and education needs of future work. In industries where the development of circular economy innovations is fast paced, the need for both in-depth specialist competence and employees with different skill combinations is growing. For example, current digital solutions in the construction sector require more versatile competence (Circle Economy 2020a).

The fast-changing labour market adds pressure on companies to keep their employees’ competence up to date. Responding to the future need for experts in the circular economy requires integrating the circular economy into the curriculums of degree studies as well as continuing education, on-the-job learning and updating skills (Trinomics 2021). Companies estimate that the current circular economy competence in the Finnish labour market is largely the result of training and learning that happens in companies.

2. Construction sector

The circular economy in the construction sector can have a significant impact on material circulation and waste prevention

The construction sector is a socially and economically significant industry in Finland. New construction, maintenance of the built environment and related services altogether employ approximately half a million people, one fifth of the Finnish workforce (Laine et al. 2020). Trends in society, such as urbanisation, demographic change and digitalisation, have a strong impact on the development of the sector (Laine et al. 2020). The size and dependence of the construction industry on large material flows gives the sector a central role in the circular economy transition. An estimated one third of all waste produced in the EU comes from the construction industry (European Commission 2019).

For the construction sector, a special challenge posed by the circular economy is the long life cycle of buildings. At the design stage, it may be difficult to predict what kind of material will be useful in 50 years or what kind of history the building will have had by the end of its life cycle. Usage history affects the reusability of materials and components, for example. New digital systems are currently being developed to track usage history, but the long life cycle of buildings can cause problems in the integration of digital systems. Design must also take into account possible choices between longevity and ease of demolition.

The circular economy in the construction sector is hampered by a temporal and geographical imbalance in the demand and supply of recycled materials. For example, a demolition project may produce a large amount of recyclable and reusable material that cannot be utilised either for logistical reasons or due to a lack of information. A solution to this problem would require better organisation and exchange of information in the sector, temporary storage facilities for materials and new means of processing the materials. Co-operation within and between companies enables circular economy solutions.

In Finland, those in the sector are at different starting points with regard to the obligations and opportunities arising from the circular economy. Compared to small businesses, large companies are better able to respond to stricter regulations and to benefit from the new business opportunities offered by the circular economy. Equally increasing the level of knowledge about the circular economy throughout the value chain should be a shared responsibility. For example, the Green Building Council has been active in Finland in developing circular economy expertise in the real estate and construction sectors.

Amount and type of work will change for building life cycles

The carbon-neutral circular economy transition in the construction sector will have an impact on the number and types of jobs in the sector. These impacts will be different in different parts of the value chain and in different professional groups. Demolition, recycling and reuse will undergo the largest change in the construction sector value chain. In addition, design will play a key role in promoting the circular economy in the sector. Sitra estimates that the greatest potential for creating new jobs in the construction sector is at the end of the value chain in the demolition of buildings and recycling of construction materials (Jalava et al. 2021). According to estimates by the ILO, an increase in the recycling rate of construction materials may create up to 6.5 million new jobs in the European construction sector by 2030 (ILO 2018).

Modular construction components becoming increasingly common may reduce the number of jobs at construction sites while possibly increasing the need for employees in production where the structures are assembled (Jalava et al. 2021). It is estimated that new jobs will also be created in companies providing digital services in the construction sector, alongside repair and renovation services that extend the life cycle of buildings.

In the future, there is likely to be a greater move away from expert or specialist roles in the construction sector to more generalist positions. The sector will need people with many wide-ranging skills to promote co-operation between different functions as well as specialists on topics such as sustainability, to calculate carbon footprints, for example. Although many larger companies have their own sustainability and corporate responsibility teams with concentrated responsibility competence, sustainability and circular economy competence will also be integrated into all work tasks.

The circular economy requires life-cycle thinking and co-operation skills

There is still little special expertise on the circular economy in the construction sector, but educational institutions and employers alike have increased their investment in educating new experts. For example, Sitra has funded circular economy training pilot schemes (2022) and projects to provide circular economy competence at all levels of education (2019) to tackle competence gaps in the sector. At the moment, however, companies generally need to develop their circular economy competence through continuing education, as circular economy experts are not widely available. Circular economy and sustainability themes are also an opportunity for companies to increase the attractiveness of the sector for current and future experts.

New skills are needed in the construction sector in all parts of the value chain: design, material development and procurement, building construction, use, repair and renovation, and demolition and recycling. Choices made during the design phase of a building have far-reaching consequences. Design will be even more focused on life-cycle thinking, knowledge of materials and taking into account modularity, longevity and safety (Jalava et al. 2021). The competence required of designers will be more extensive and the theme of sustainable development in particular will be integrated into designers’ current job descriptions. Co-operation skills and the development of specific circular economy solutions will be part and parcel of a designer’s competence. The designer can play an important role in achieving the goals of the client and the construction company, for example by informing the client of possible alternatives.

The fragmentation of value chains in the sector poses challenges for design aligned with a circular economy. The market for recycled materials differs from trading with traditional materials. In fact, procurement that promotes the circular economy requires new competence, such as networking skills and an overall understanding of sustainability in the construction sector. The role of procurement is also important because a circular economy is rarely realised in an individual project. Instead, it involves co-operation between several parties and projects. The key issues for recycled materials concern quality, safety and price. The developer is responsible for the quality and safety of the building for years, so materials come under a great deal of scrutiny. Regulation plays a major role in defining acceptable materials.

In construction, the greatest change in work is related to the transfer of work from construction sites to factories. On construction sites, the circular economy is visible in the assembly of modular parts and in construction that minimises waste and material loss. In the circular economy, construction materials should be efficiently reused and recycled at each site. The recycling of construction materials is often learned through work, but cultural differences and language barriers can sometimes be an obstacle to effective recycling. This problem can be solved with clear instructions and competent supervision of work.

With a construction industry in line with the circular economy, the life cycle of buildings will be extended by repair and renovation. It requires expertise in the planning and implementation of timely renovation and maintenance procedures. The increasing amount of measurement data serves as a tool for choosing renovation and maintenance measures, but digital competence is required for the analysis and use of that data. At the end of the value chain, the planning and implementation of demolition work require knowledge of value chains, mechanical recycling competence and knowledge of the handling, sorting and recycling of different materials (Jalava et al. 2021).

A carbon-neutral circular economy transition requires, above all, the ability and flexibility to continuously learn new things. New digital tools and platforms require continuous learning. This applies across the entire value chain. The construction sector particularly needs professionals in life-cycle costing. Rapidly developing legislation also requires staying continuously up to date, and there is especially a current shortage of experts in EU taxonomy and its application. In addition, the sector needs experts in politics and regulation who are also able to influence the operating environment of the sector both nationally and internationally.

Co-operation within and between companies is a prerequisite for the circular economy in the construction sector. The exchange of information and active dialogue between different parts of the value chain and stakeholders enable materials to be used effectively and new solutions to be widely adopted. Co-operation between different parties in the sector also benefits small organisations that can utilise the expertise acquired through partnerships.

3. Technology sector

The technology sector will undergo change and enable change in other sectors

The technology sector is a collective term for a diverse group of industries, ranging from information technology to metal processing. The technology industry is Finland’s largest export sector: it accounts for more than half of Finland’s total exports (Technology Industries of Finland 2022). The technology industry currently employs some 320,000 people. According to a report by Technology Industries Finland, the sector will need as many as 130,000 new experts over the next 10 years (Technology Industries of Finland 2021). The mechanical engineering sector included in the technology sector has widely seized the opportunities of the circular economy to reduce the materials used and carbon dioxide emissions generated by production and to create new business.

Because of its size, the technology sector has significant circular economy potential to also enable circular economy solutions in other sectors. The technology industry has special expertise in areas such as material efficiency, digital solutions and the development of services that extend the life cycle of products, like maintenance and refurbishment (Technology Industries Finland 2020). The circular economy programme prepared by Technology Industries Finland in 2022 highlights ways in which companies in the technology sector can create new business using circular economy models. Identified accelerators of the circular economy transition include new types of co-operation models, business and innovation ecosystems and the strengthening of competence. Circular economy thinking is expected to be integrated into all activities in the industry. New business opportunities have been identified in all the main sectors of the industry.

A challenge identified in the technology sector is the highly varying capabilities of large and small companies in the industry to meet the obligations of the circular economy and to capitalise on the opportunities it offers. Sector-specific environmental impacts also vary greatly. For example, waste from electrical and electronic equipment (WEEE) is the fastest growing waste flow in the EU with an increase of 2 per cent per year. Since 2003, manufacturers of electronic devices have been responsible for the waste management of devices placed on the EU market, but many countries are still struggling to achieve WEEE recycling targets (European Commission 2021). It follows that major players in the sector have the responsibility to assist and encourage others in their value chain, such as subcontractors, so that the entire industry can benefit from a carbon-neutral circular economy transition.

Digital solutions as drivers of the circular economy

The technology sector’s extensive operating environment makes it difficult to assess changes in employment and competence needs. The employment impacts of the circular economy are very different in different sectors, and change will be evident at different intensities in different parts of value chains. Most new jobs are likely to be created at the start of the value chain in the development of new businesses and in the design of new products and solutions.

Circular economy and digitalisation are strongly interlinked, and the IT sector as part of the wider technology sector is at the centre of the circular economy. Digital solutions help manage critical material flows across the value chain, such as design, supply chain management and process optimisation. New technologies supporting the circular economy include machine learning, artificial intelligence, the Internet of Things (IoT), blockchains and digital product passports. The use of digital solutions will require an emphasis on the availability, quality and efficient management of data (Luoma et al. 2021). There is a growing need for verifiability and measurability, and these accelerate circular economy operations at different stages of the value chain.

Digitalisation, automation and robotics affect the number and quality of tasks. As a result of the digital transformation, the amount of work will probably decrease, but the need for digital experts will increase at the same time. Expert jobs are expected to diverge into generalist and specialist roles. Digitalisation will become an essential part of all activities and will be developed together with experts and those at operational level.

When material cycles are closed using new circular business models, the relationship with customers will also change. Investing in customer relationships and seeing the customer as a long-term partner can help develop new business or ecosystems. Extending product life cycles and new business models in line with the circular economy, such as rental and maintenance services and offering a product as a service, increase the need for tasks related to sales and customer service.

The need for digital skills and new combinations of competence

The most important competence needs in the technology sector concern continuous learning, digitalisation and data, customer orientation, management, a low-carbon approach and the circular economy (Technology Industries of Finland 2021). The technology sector is undergoing rapid change. A concern in the industry is the adequacy of resources in the education sector: is it possible to educate enough of the experts listed above for when current employees retire? Employers are also responsible for training professionals with diverse expertise. The technology training pilot projects (Sitra 2022) and the Circular economy teaching for all levels of education project entity (Sitra 2019) addressed the competence needs of the sector, such as circular economy expertise in machine workshops and a circular economy in the battery technology field.

The circular economy competence needs are largely focused on existing tasks in the technology sector. There may not be many new job titles created in the industry. Different sectors, such as the technology industry and bioeconomy, will be increasingly intertwined. In the future, work will be carried out in teams that combine expertise from different fields and functions. However, this change will not take place instantly, and the reorganisation of work will happen gradually.
Design aligned with circular economy principles aims at more efficient utilisation of recycled materials and side streams. Competence needs will focus on having knowledge of value chains and materials and taking serviceability and repairability into account. In-depth knowledge of materials will also be particularly important in the development of new materials in line with the circular economy. Development work must take into account both the specific characteristics of recycled raw materials and the recyclability of a product. Knowledge of these features will also be crucial in the production stages of products.

Extending the life cycle of products and creating new business models focusing on services also require new expertise at the end of the value chain. Expert knowledge of materials will be important for maintenance, repair and reuse, as much as it is at the beginning of the value chain. For example, more efficient recycling of materials used in electronic devices requires new technological innovations and a skilled workforce to make best use of these innovations (Jalava et al. 2021). Software skills, manual maintenance and factory refurbishment are also skills needed to keep products in circulation for as long as possible. Knowledge of old technologies and products can become valuable when efforts are made to extend the life cycle of products by repairing and refurbishing them. Customer insight and sales competence are essential for the shift from ownership to rental and from the physical to the digital.

Logistics and recycling will focus on competence in material and product recovery, information security, and recycling and process competence (Jalava et al. 2021). The digital transformation accelerated by the coronavirus pandemic and the increased number of cyberattacks caused by the war in Ukraine have heightened the need to ensure adequate information security.

4. Chemical sector

A great deal of untapped potential

The chemical industry is one of the largest industries in the world. Global sales totalled $5.68 trillion in 2018, making it the second largest industry in the world. In the EU, the chemical industry is the fourth largest industry in terms of production. In Finland, the chemical industry accounted for 18% of manufacturing production and 19% of exports in 2019. Some 400 companies in the chemical industry employ approximately 34,000 employees (Chemical Industry Federation of Finland, Business Finland and Sitra 2020).

The chemical industry brings together different fields that operate at different stages of the sector’s long value chain. In Finland, there are companies operating throughout the chemical industry chain, in the procurement of raw materials, processing, basic chemistry, specialist chemistry, formulation and the manufacture of products. The chemical industry’s carbon-neutral circular economy will change raw materials, processes and energy sources.

Drivers of the circular economy transition in the chemical industry include the demands of consumers and investors, climate change, stricter regulations aimed at sustainable development, and new technologies supporting the circular economy (Chemical Industry Federation of Finland, Business Finland and Sitra 2020). New products and raw materials in the chemical sector allow many other sectors to move towards the circular economy. The sector is characterised by a strong knowledge of processes and materials that accelerate circular economy business models (Chemical Industry Federation of Finland 2020). Cross-sectoral trends in the change include digitalisation, changing competence needs and ensuring safety.

The challenge (and potential) of the circular economy transition in the sector lies in the poor recyclability of many chemical products with existing methods. For example, as processes and technologies suitable for separating material flows develop, companies that make use of them will have the opportunity to grow by applying new circular business models (Chemical Industry Federation of Finland, Business Finland and Sitra 2020). Finnish companies have the opportunity to influence global circular economy development by bringing these new solutions to the global market.

New raw materials create and eliminate jobs

A successful transition to the circular economy requires a new kind of thinking and changes throughout the value chain: in planning, procurement, sales, manufacturing, product development, recycling and co-operation with other parties. The circular economy transition in the chemical industry has varying impacts on the labour needs of different parts of the value chain. For example in the plastic industry, jobs related to manufacturing products from virgin raw materials are likely to be eliminated as the sector moves to new and recycled raw materials (Jalava et al. 2021). At the same time, new jobs will be created in the recycling of materials and sectors supplying alternative raw materials, such as agriculture and forestry.

Circular economy business models and technological development have different impacts on manual labour and expert tasks. The greatest employment and competence impacts of the circular economy in the sector will occur at the beginning of the value chain, especially in the procurement and processing of raw materials and in planning. A recent trend has been to exercise closer control on value chains, known as insourcing, which may increase the need for labour. The competence needs of the circular economy will focus on existing tasks, but as the number of tasks grows, there will also be a need for additional workforce.

The number of tasks performed in the sector is likely to decrease as manual tasks are automated in factories. It is difficult to estimate exact numbers owing to uncertainties related to the development of new technologies. On the other hand, recycled materials require more processing than virgin materials, which creates new jobs as well. The ability to use recycled raw materials is different in basic chemistry and specialised chemistry. The need for experts is likely to increase with stricter regulation and digitalisation.

Rapid change in the sector requires new expertise in all operations

In order to enable the circular economy, companies in the chemical sector should increase their competence, especially in the management of supply chains, the development of new products and services, the management of a corporate culture that strengthens the circular economy, and when operating in various networks and ecosystems (Ikonen et al. 2021). Competence in different sustainability themes will probably be integrated into other tasks instead of them being focused on sustainability and circular economy experts. Education plays an important role in meeting these competence needs. For its part, Sitra has tackled the competence needs of the chemical industry with a training pilot project on new circular economy expertise in the chemical industry ecosystem (Sitra 2022).

The chemistry sector is undergoing rapid change. Managing employees’ marketable skill levels is especially important to maintain the long-term competitiveness of companies. To that end, many companies offer training and orientation to increase competence in the circular economy. The importance of extensive networks is highlighted in the rapid change of the sector and in finding new experts. New competence is acquired through continuing education as well as recruitment.

Circular procurement requires networking competence, a better understanding of raw materials and processes, and management of supply chains. In a circular economy, raw materials are procured from different and typically more diverse sources than virgin materials. Those working in procurement also need to understand the processes enough to be able to further explain the needs concerning the quality and pre-treatment of the raw materials and the personnel handling it. There is an especial need for competence in responsible procurement in long and global supply chains.

Recycled materials are more challenging to use than virgin materials, which requires new competence. Another issue is that while there may be new kinds of materials there may not be the requisite experience of using them. Recycled raw materials may also require tailoring processes for each batch of raw material because the starting material is less uniform than virgin raw materials. This means that recycled raw materials generate competence needs not only for those working in design and processes, but also for procurement.

Competence in the use of technology and data enables the creation of circular economy solutions in the chemical sector. One aspect creating a need for competence is the automation of processes. An operator’s work already requires technology and data expertise, but the growing need to adjust processes to suit circular economy raw materials increases the need for new competence.

Co-operation across organisational boundaries will also increase with the circular economy, for example as supply chains become more diverse. Multidisciplinary competence and active influence in ecosystems support the circular economy transition but also help those in the sector better understand their customers’ needs and expectations.

5. Summary and conclusions

The chemical, construction and technology sectors are at the core of the circular economy transition. The chemical sector enables circular economy solutions for other sectors with new materials and processes; the technology sector does so with digital technologies that cross sectoral boundaries; and the construction sector has a comprehensive impact as a result of its large size and extensive influence on value chains.

All three sectors are undergoing an enormous change in the areas of the circular economy, the low-carbon economy and corporate responsibility and sustainability. The rapid change in these sectors affects operating methods and the skills required of employees, which must develop to meet the requirements of the circular economy. Job descriptions are expanding, and new employees are also needed as work tasks become more diverse.

Sector-specific competence needs of the circular economy will be integrated into existing tasks. Job titles are expected to remain largely the same, but their content will change. As a result of the circular economy, work will also be organised in a new way. At the moment, especially in larger companies, the themes of sustainability, low-carbon operations and the circular economy are largely the responsibility of a separate sustainability or climate team. In the future, teams that combine expertise in several different fields and functions within a company will become more common, as will co-operation with other bodies and fields.

Even in the future, the most important competence requirements will concern the basic skills of each field, and task-specific circular economy competence will be built on that basis through on-the-job learning or continuing education. This requires employers to invest in systematic recruitment, communication and training.

Digitalisation and automation are expected to reduce tasks at the practical level in the future, while increasing the need for competence at the expert level. At the same time, digital solutions and data management will enable the implementation and monitoring of new circular economy operating methods. They will also make it possible to measure a company’s low-carbon efforts and footprint and handprint and even introduce these to the indicators of the management team and the entire company. For the time being, however, companies in these sectors are at very different stages in the use of digital tools.

The importance of information exchange and co-operation will grow in the future. Small and large companies have different prerequisites for seizing the opportunities offered by the circular economy. Often the required competence is acquired through networks. Cross-sectoral co-operation enables a broader competence base. The exchange of information and active dialogue between the different sections of the value chain and those within it will also play a key role in generating new innovations. The circular economy itself will guide the sectors towards new types of co-operation, which will require expertise in networking, co-operation and influencing.
Regulations on the circular economy and the development of these regulations play a key role in the wider use and risk management of circular economy solutions. New and recycled materials require special expertise and proper processing. In addition, companies will need experts in national and EU regulation as well as competence in how to influence processes and development trends.

Motivating employees involves integrating tasks into a larger entity and purpose, which requires leadership, communication and persistent work. At best, the change towards a circular economy can be implemented together with employees, applying their ideas in practice. For companies, the themes of the circular economy and sustainability will be an important competitive advantage in attracting new experts in the future.

Sources

Cambridge Econometrics, Trinomics and ICF (2018). Impacts of Circular Economy Policies on the Labour Market.

Chateau J. and Mavroeidi E. (2020). The jobs potential of a transition towards a resource efficient and circular economy. OECD Environment Working Papers, No 167, OECD Publishing Paris.

Chemical Industry Federation of Finland (2020). Carbon-neutral chemistry: https://www.kemianteollisuus.fi/fi/vastuullisuus/hiilineutraalikemia2045/ (ppt) (in Finnish).

Chemical Industry Federation of Finland, Business Finland and Sitra (2020). Circular business models for chemical companies (in Finnish).

Circle Economy (2020a). Jobs & Skills in the Circular Economy: State Of Play And Future Pathways.

Circle Economy (2020b). The Disrupt Framework.

Circle Economy (2021). Avoiding Blind Spots: Promoting Circular & Fair Business Models.

European Commission (2014). Ecodesign your future: How ecodesign can help the environment by making products smarter.

European Commission (2019). Construction and Demolition Waste (CDW).

European Commission (2020). A new Circular Economy Action Plan. For a cleaner and more competitive Europe.

European Commission (2021). Study on quality standards for the treatment of waste electrical and electronic equipment (WEEE).

European Commission (2022). Study on WEEE collection rates.

Forslund T., Gorst A., Briggs C., Azevedo D. and Smale R. (2022). Tackling root causes – Halting biodiversity loss through the circular economy. Sitra studies 205.

Ikonen, Kallela, Pietilä and Suonsivu (2021). Strategic capabilities for carbon neutrality in the chemical industry.

Jalava E. et al. (2021). How does the circular economy change jobs in Europe? – Upskilling and reskilling for a just transition.

International Labour Organization (ILO) (2018). Greening with Jobs. World Employment and Social Outlook 2018.

International Labour Organization (ILO) (2019). Skills for a Greener Future: A Global View.

Laine A., Raivio T., Jonsson H., Heino A., Klimscheffskij M. and Lehtomäki J. (2020). Low-carbon construction industry 2035.Part 1.Current state of the carbon life cycle of the built environment.

Luoma P. et al. [RS6] (2021). Nordic Working Paper: Low-Carbon Circular Transition in the Nordics.

Material Economics Sverige AB (2018). The Circular Economy, a Powerful Force for Climate Mitigation.

Michaux S. (2021). Assessment of the Extra Capacity Required of Alternative Energy Electrical Power Systems to Completely Replace Fossil Fuels. GTK Open Report.

Ministry of the Environment and Ministry of Economic Affairs and Employment (2021). Government resolution on the strategic programme for circular economy (in Finnish).

Sitra (2019). Circular economy teaching for all levels of education.

Sitra (2022). Circular economy training pilot projects.

Technology Industries of Finland (2020). Low-carbon roadmap for the Finnish technology industry 2035 (in Finnish).

Technology Industries of Finland (2021). Technology Industries of Finland competence report (in Finnish).[RS10] 

Technology Industries of Finland (2022). Technology Industries of Finland circular economy programme 2035 (in Finnish).[RS11] 

Trinomics (2021). European Social Partners’ project on circular economy and the world of work – Final Report.

Companies interviewed

3Step IT
Betolar
Borealis
Fiskars
Kemira
Kiilto
Konecranes
Lumene
Neste
Orthex
Outokumpu
Ponsse
Ramboll
Remeo
Saint Gobain
Skanska
ST1
UPM
Valtra
VTT
Warkaus Works
YIT
Ytekki