Navigating the EU's neighbourhood's shift to a circular economy through skills development

How can we attain universal wellbeing without overexploiting our planet? This pressing question sits at the root of the need to shift to a circular economy. Currently, the global economy is only 7.2% circular, leaving more than 90% of materials wasted, lost or unavailable for reuse (Circle Economy Foundation, 2024). Given that 70% of greenhouse gas emissions can be traced back to material use and handling, significant gains can be made by addressing the climate crisis through circular economy solutions. Reducing the use of new materials also holds socioeconomic potential: circular economy interventions are labour-intensive (Cedefop, 2023a) and skill-intensive. They require shifts in labour markets and education systems. The Circle Economy Foundation helps to identify the shifts in education and skills needed to implement circular economy interventions in a just and fair way, truly changing the way we live and work.

In this article, we examine lessons from the Circle Economy Foundation’s Circularity Gap Report 2024 and its suggestions about the skills and competences needed by workers in EU neighbourhood countries [1] EU neighbourhood countries are defined by the European Neighbourhood Policy as 16 partners: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia, and Ukraine. For more information: European Neighbourhood Policy. to facilitate a circular economy and seize its employment potential.

The circular economy’s potential to generate net positive job growth is dependent on how well labour market policies can be aligned with the supply and demand for essential skills, competences and knowledge (Circle Economy Foundation, 2023). While new jobs will be needed, a more circular economy also requires a transformation of existing jobs, utilising many skills already present in the workforce. Currently, a skills mismatch is evident: many companies report difficulties in finding skilled workers for essential circular, green activities, like repair, waste management and reuse. Vocational education and training can play a key role in adapting the workforce to anticipated skills demand, as many occupations in the circular economy require practical and technical skills and upskilling (Circle Economy Foundation & UNEVOC, 2024). 

The Circularity gap report 2024 demonstrates how a large-scale implementation of strategies that narrow, slow, cycle and regenerate material flows [2] The circular economy is anchored in four principles: narrowing, slowing, regenerating and cycling flows to use less resources; extend product lifespans; utilise cleaner materials; and enhance material reuse. For more information: What is the circular economy? across global systems (such as the food system, the built environment and manufactured goods) can help to realise the full potential of the circular economy. It distinguishes between three country profiles: build, grow and shift countries. These correspond roughly to low-, middle- and high-income countries. In so-called grow countries, which include many EU neighbourhood countries, the report highlights the potential of scaling the circular economy in the food system and manufacturing. It prioritises the following solutions 

in the food system: 

• Roll out policies to encourage nutritious choices and cut food waste. 
• Reform economic incentives and regulations to prioritise regenerative farming and holistic land management. 
• Empower and protect farmers engaged in regenerative agriculture. 

in manufacturing: 

• Remove barriers to scaling circular manufacturing with clear and mandatory targets and aligned incentives. 
• Invest in, and promote, technology transfer to scale up green tech. 
• Develop a plan for sustainable skills development for the jobs of tomorrow.

The manufacturing sector is critical in many grow countries as they are rapidly transforming from low-cost production centres to hubs of innovation and high-value-added manufacturing. They offer a combination of cost-competitive labour, improved technical capabilities and strategic geographic locations, making them attractive for domestic manufacturing and foreign direct investment. This growth has been supported by investments in education, research and development, and technology adoption. Simultaneously, transforming the food system will be highly relevant for grow countries because of its critical role in providing livelihoods and meeting the basic needs of their populations.

Grow country profile 

Grow countries globally account for 55% of all raw material extraction and 52% of the material footprint, while housing around 37% of the global population. These are larger Southeast Asian countries and countries in Latin America and North Africa, as well as those with a transition economy in eastern Europe, the Caucasus and Central Asia. Grow country contribution to the overshoot of planetary boundaries is largely due to the consumption of local materials in higher-income (shift) countries. 

Key development pathways  

Grow countries, which are largely middle-income, need to continue pursuing economic growth to meet their people’s needs, but in a way that is much more sensitive to the various planetary boundaries. Further growth and higher income levels have translated into a nutrition transformation: diets are increasingly shifting towards more animal-based proteins, such as meat and dairy, and processed foods (Bodirsky et al, 2020). This dietary shift underscores the importance of the agricultural sector not only in covering basic needs but also in necessitating a sustainable approach to meet changing consumption patterns. Simultaneously, the manufacturing sector is emerging as a critical pillar in these countries' economies. Because these countries continue to serve as key manufacturing and industrial hubs for both global and domestic markets, there is a pressing need to ensure that this growth is environmentally sustainable and that it provides safe and decent conditions for workers (Circle Economy Foundation, 2023).

Despite the high skill levels in many grow countries, significant knowledge and skill gaps remain. This is exacerbated by the fact that they often have a high number of informal workers contributing to circular activities, such as the sale of second-hand goods, recycling and micro-businesses active in industries such as agriculture (European Commission, 2019). Comprehensive and inclusive skills policies therefore also need to recognise the skills and qualifications of informal workers (GIZ, 2022). 

The Circularity gap report 2024 recommends that decision-makers consider the priorities listed below to develop the skills and competencies needed to foster a circular economy transition in the EU's neighbourhood.

• Identify and anticipate skills needs – Conduct national and regional empirical analyses on supply and demand for emerging skills to identify gaps across the entire value chain. This should inform skills development policies and other interventions. 
• Stimulate demand – Implement policies to stimulate demand for circular skills, products and services. This could entail environmental food labelling, leveraging public procurement standards favouring circular goods and establishing tax incentives or subsidies for circular business practices in the agrifood and manufacturing sectors (Shaw, 2012; Oxfam, 2014). Raise awareness of the benefits of circular practices in these two key sectors through national campaigns.  
• Develop curricula – Prioritise integrating circular economy principles into educational curricula, emphasising vocational education and training for sectors such as agriculture and manufacturing (Hira et al, 2022). Develop specialised programmes that not only impart technical skills but also foster innovation and problem-solving, preparing students for roles in sustainable food systems and circular manufacturing that require collaboration across multiple value-chain stages. Efforts should be made to leverage and integrate the knowledge and skills held by entrepreneurs working not only in formal companies but also in more informal environments. Leverage innovative public-private partnerships to improve access to education and support investments in apprenticeships and on-the-job training, and strengthen the education and training infrastructure. 
• Ensure educator readiness – Ensure that professional development for teachers and trainers focuses on critical circular economy practices in agriculture and manufacturing. It should emphasise the importance of regenerative farming, sustainable food consumption and production, and circular manufacturing processes. Educators must be assisted in updating their knowledge to meet new industry demands. Trainers in firms must be assisted in updating and formalising their teaching skills across disciplines

Further information

• Circularity Gap Report 2024 
• Decent Work in the Circular Economy 
• Closing the Skills Gap
• Thinking Beyond Borders to Achieve Social Justice in a Global Circular Economy

References

Bodirsky, B.L., Dietrich, J.P., Martinelli, E. et al., (2020),  ‘The ongoing nutrition transition thwarts long-term targets for food security, public health and environmental protection’, Scientific Reports, Vol. 10, Article number 19778.   

Cedefop (2023a), From linear thinking to green growth mindsets: Vocational education and training (VET) and skills as springboards for the circular economy, Cedefop. 

Cedefop (2023b), Skills forecast technical report, Cedefop. 

Circle Economy Foundation (2023), Decent work in the circular economy, Amsterdam.  

Circle Economy Foundation (2024), The circularity gap report 2024, Amsterdam.

Circle Economy Foundation & UNESCO-UNEVOC (2023), Closing the institutional gap for the circular economy in TVET: Trends and perspectives from three countries in Africa, Bonn.  

European Commission (2019), Commission implementing decision on the ENI South Annual Action Programme 2019, Brussels.  

GIZ (2022), Skills for a just transition to a green future, Bonn.  

Hira, A., Pacini, H., Pereira, A., Attafuah-Wadee, K., Rashid, A., Gara, F. & Munene, K. (2022), ‘Shifting to circular manufacturing in the global south: Challenges and pathways’, Journal of Developing Societies, Vol. 38, No 3.  

Oxfam (2014), Scaling-up agroecological approaches: What, why and how?, Oxfam-Solidarity.  

Shaw, W. (2012), Will emerging economies repeat the environmental mistakes of their rich cousins?, Carnegie, Washington DC. 

About the authors and the Circle Economy Foundation 

Jana Rue Glutting is a labour market consultant while Esther Goodwin Brown is a lead of the Circular Jobs Initiative. Both work with the Circle Economy Foundation in Amsterdam. The Circle Economy Foundation assists industries, cities and nations in putting the circular economy into action with practical and scalable solutions. Its vision is an economic system that ensures the planet and all people can thrive. The Circle Economy Foundation's goal is to double global circularity by 2032.

⬅️ Back