Background of the U-Eco project

The Erasmus+ co-funded U-Eco (“Upskilling for Creative Circular ECOnomy”) project focuses on the transitional process from a linear to a circular economy, addressing the need for a specific circular economy training that is able to boost employability, self-employment, and meet the new labor market demands. The findings and results of the first year of the project have created a comprehensive market research on entrepreneurial opportunities within a circular economy in the partners’ countries. The main findings of the project's market research are summarized below.

Circular Economy Indicators

A circular economy enjoys the support of both the political and business sectors as it promotes growth, employment, positive health, environmental protection, and more dependence on renewable energy. If successfully implemented, a circular economy will rejuvenate the European Union (EU) economy, providing a systematic shift from current industry trends, and promoting new eco-friendly designs, business modes, flow of resources, and value creation. Research and development (R&D) for electric vehicles and autonomous cars receive many investments, while most circular and waste management sectors struggle to secure funds. Still, a circular economy can create new opportunities to innovate and invest in eco-design, secondary raw materials, recycling processes, and industrial symbiosis crucial to transitioning into a circular economy.

According to The Monitoring Framework for Circular Economy, circular economy indicators are water, waste management, energy, raw materials, and urban metabolism. Therefore, EU countries invested in wastewater treatment and its reuse in manufacturing and industry, providing citizens with 100% fresh drinkable water. Recycling waste is one of the indicators that have substantially developed over the past decade. EU countries have invested in recycling waste, plastic, and wooden waste packaging, as well as recycling e-waste, bio-waste, and construction and demolition waste, which have reached new heights between 2010-2016. The consumption of renewable energy is also growing, especially in the transport, electricity, heating, and cooling sectors. There is considerable interest in trading recyclable raw materials. These changes are part of the EU transition plan into a circular economy model that can yield annual benefits extending to €1.8 trillion by 2030, representing twice the benefit of the current development path. 

Although EU countries share general strategies, specific social and economic differences shape the circular economy's evolution in each particular country. 

Small and Medium-Sized Enterprises (SMEs) and The Circular Economy

The five EU countries have identified certain linear economic limitations. These include the following: uncertainty regarding the availability of supplies, use of linear product designs rather than implementing circular product designs, unfavorable government intervention, linear consumption mindset, old business models, use of non-renewable resources, and imbalance between environmental protection and economic development.

Small and medium-sized enterprises (SMEs) are the backbone of Europe’s economy, representing 99% of all businesses in the EU, creating millions of new jobs and accounting for two-thirds of the private sector employment. SMEs are vital to ensure economic growth, innovation, and social integration in Europe and pave the way for establishing a circular economy.

A circular economy is a gold mine for SMEs. In terms of economic growth, circular activities drive higher revenues and reduce costs; therefore, the European Commission offers them more funding and help services, and governments provide public aid and tax incentives. A circular economy is also profitable, allowing for significant savings in the production processes. Due to the rise of consumer awareness, companies can use a circular economy to boost their image and reputation, presenting it as part of their Corporate Social Responsibility (CSR). A circular economy offers SMEs the opportunity to retain customers, build more durable relations, and encourage new business models to use innovative technology, digitalization, and automation. By reducing the dependency on raw materials and promoting recycling and reuse, a circular economy helps reducing the environmental footprint of products and services.

A circular economy also grants a tremendous capacity potential for SMEs to develop. Circular business models are associated with technology and innovation, reduced liabilities, and eco-friendly products and services. The internet and new forms of communications will grant accessible information, transparent interactions, fewer inefficiencies, reduced costs and energy, and automation of services giving rise to product-service systems, resource recovery models, and new sharing platform business models. Its dependency on recycling and reuse of material will limit pollution and environmental risks, have long-term financial benefits and increase customer demand for sustainable products.  

Circular Economy Regulations and Restrictions

Today, several restrictive rules impede the full implementation of a circular economy framework. The five EU countries share similar challenges, including lack of governmental and financial support, the will to resolve environmental issues, and education campaigns to counter companies and consumers unawareness, insufficient R&D, absence of technological and infrastructure needed, the capacity to compete with linear economy business models and the difficulty of engaging the public and private sectors.

To face these challenges, the EU countries have tried to promote some initiatives and policies. They invested in eco-innovation as an emerging specialization to advocate renewable and clean energy and strengthened governmental support to fund and coordinate a smooth transition into the circular economy. They also endorsed new laws and regulations promoting circular economy and sustainable development, launching educational campaigns to educate the public and national strategies to manage waste, and packaging, prioritizing the funding of bioeconomy, eco-nanotechnologies, and advanced materials.

Analysis of the Technical, Environmental, Economic and Social Aspects of the Identified Business Solutions

The detailed SWOT Analysis of the identified business solutions revealed the following:

Technically speaking, the growing investment in technology to maintain competitiveness, develop new business models and various production line platforms, and promote R&D to strengthen businesses. Yet, they have to overcome weaknesses, including the lack of expert calibers and needed skills, inadequate support of local governments, and the difficulty of redesigning, repairing, refurbishing, or remanufacturing existing products is a real difficulty. Still, technology offers numerous growth opportunities by promoting development, process innovation, and redesigning current products. It redefines the relation between companies and customers and facilitates the assessment of materials and product life cycle, provides technical solutions for waste management to optimize resource consumption, adapts to the scarcity of raw material, develops regional bioeconomy, and finances good environmental practices. However, insufficient expertise, incentives, and circular economy standards to assess progress threaten the transitional phase's development.

In terms of the environment, new business solutions promote waste reduction, resource efficiency, and recycling, as well as the development of bioeconomy’s research and development and innovation (R&D&I) projects. The challenge lies in policy incoherence and low utilization of renewable biological resources for production, energy, and packaging. Still, there is a lot of potential and opportunities to explore, including less dependency on fossil fuels, adapting to the growing scarcity of raw material, conserving biodiversity, and limiting global warming. Impediments threatening the realization of these goals include the lack of coherent cross-sectoral bioeconomic vision and legal framework, and uncertainties that delay the implementation of new processes.

Economically, these business solutions have higher entrepreneurial potential creating new jobs and opening up new revenue opportunities; nevertheless, they have to face market uncertainties, high cost, and restructuring risks. Still, the possibilities are endless: creating new models of consumption based on the collaborative economy and service economy solutions, reducing all business costs, developing collective agreements, integrating supply chains, and urban symbiosis and growing entrepreneurship, sustainable start-ups, and use of online platforms. The risks lie in the high transformational costs, which may end demand for new products, decreased sales rate due to the increased sales rate of repaired and recycled products, and lack of proper infrastructure. The severely fragmented value chains, cost-driven competition, the unpredictability of the global market trends, and growing market competition are also real challenges that need to be resolved.

Despite the low public awareness of the benefits, these business solutions can reduce social inequality and improve citizens' health. They also promise to encourage social consciousness and raise public interest in sustainability and environmental issues. They need to overcome the consumer’s resistance for change by educating people about responsible consumption and remove any negative associations they may have to reused products. 

Primary Areas with the Highest Entrepreneurial Potential within a Circular Economy

There are five main areas with entrepreneurship potential that offer business strategies to bridge future gaps in demand. Food and biomass, which have great sustainable growth potential, provide multiple solutions, including nutrient recovery, innovative materials, and renewable energy. Therefore, capitalizing on possible opportunities can generate new businesses adding economic benefits to agriculture and promoting sustainable food production. Plastics is also one of the growing sectors and is quickly becoming a key priority of the EU action plan to implement a circular economy. Plastics, generally related to packaging, are directly connected to societal and individual perceptions and promote sustainability, circularity, and recycling. Moreover, digitalization and sharing platforms, relatively young yet developing sectors, increased the interaction between customers and public members, presenting new opportunities for new business models, and creating new jobs. Water treatment and reuse, one of the primary components of the EU eco-industrial landscape, addresses water scarcity while simultaneously recovering valuable resources needed in the circular economy, presenting significant potential in creating green jobs. To counter the waste of construction and demolition, eco-design, which promotes sustainable and innovative materials, is slowly developing; there is an interest in wooden products, which have an eco-efficient life cycle, and can easily be recycled and reused.

Next steps

Based on the aforementioned analysis, research conducted to identify job profiles needed within a circular economy presented an elaborative catalog featuring fifteen job profiles that most likely will be in demand in the next decade. These job profiles are designed to meet the new labor demands in the fields previously identified with the highest growth potential. Furthermore, twelve training modules were developed with the primary purpose of transferring valuable knowledge on circular economy topics to specific end-users.

Project Framework

U-Eco is a KA2 Strategic Partnership co-funded by the Erasmus+ of the European Union (project reference: 2019-1-SE01-KA204-060530). It is a two year project led by SwIdeas in Sweden, European Association of Development Agencies - EURADA in Belgium, Engineering and Technical Consultancy - Bioazul and Training Development and Integration – DEFOIN in Spain, Center for Promoting Lifelong Learning - CPIP in Romania, and Association for the Regional Initiatives Development - ARID in Poland. The project partners work together to raise awareness, enable the exchange of experiences promoting mutual learning and benefit, highlight the need for a circular training that can boost employability and self-employment, and meet the demands of the new labor market.

About the authors

Sarah Marsafy is an analyst/project coordinator at SwIdeas AB (Sweden), partner organisation in the EU Project U-Eco - “Upskilling for Creative Circular ECOnomy”.

Alessia Signorelli is an assistant analyst/project support officer at SwIdeas AB (Sweden), partner organisation in the EU Project U-Eco - “Upskilling for Creative Circular ECOnomy”.

Disclaimer

The  European  Commission  support  for  the  production  of  this  publication  does  not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of theinformation contained therein. This  project  is  co-funded  by  the  European  Commission  through  the  Erasmus+ Programme (Strategic Partnerships for adult education -2019-1-SE01-KA204-060530).