Our Labour market in a circular economy, enabling a just transition in Finland

Photo by Topias Dean, Sitra

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‍This is a guest blog by Riikka Leppänen and Eero Jalava, Circular Economy Specialists at Finnish innovation fund Sitra. Sitra is a public-independent organization that is tasked with paving the way for a successful and sustainable Finland of tomorrow. Taking a recent focus on circular jobs and the social impacts of the circular economy, Sitra places particular focus on education and an inclusive circular economy.

Sitra has been engaged in the circular economy since 2015. The world’s first national road map to a circular economy was drawn up under the leadership of Sitra in 2016 and since Sitra has funded the development of circular economy education across the whole education system in Finland. To help Finnish companies and industry move towards a circular economy, Sitra has developed practical tools to enable them to develop their business to become carbon-neutral. Sitra is also currently developing a guidebook for countries on how to create a national circular economy roadmap using participatory approaches. 

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As a future-oriented think-and-do-tank, Sitra is looking at developments that need to take place today for a sustainable future to unfold. So far the circular economy has been viewed mostly as a technological or an economic issue, but as the transition takes place, it will have remarkable impacts on people: where they work, what skills they need and how they consume. These questions have started to materialise in Finland, as we are already seeing shortages of climate change and circular economy specialists and practitioners in certain industries.

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That is why Sitra has updated its circular economy plans earlier this year to look more closely at the social impacts of a transition into a circular economy. How will the shift affect jobs, communities and industries? What are the skills required in a circular economy and what should be done to ensure workers have access to education and skills training? What will happen on a global scale and how can we contribute to a fair transition across different continents?

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The circular economy has the potential to create jobs and support communities in regions and sectors that may be most affected by the transition to climate neutrality, including people currently reliant on fossil fuel industries for their source of income. It can also be a tool for delivering wider societal benefits. However, these positive developments will not happen by accident. It is important to foresee and manage the transition from early on.

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In Sitra's view, there are five main things that need to be considered:

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1. New business models require new skills. Circular business models will be the future's best business. For example, product life extension has proved profitable, while saving significant amounts of natural resources. However, these new circular business models require new skills, and we do not know yet exactly what skills will be the most relevant in twenty years’ time. Therefore we need to keep identifying industry-specific skills gaps and address them. It is crucial to integrate circular skills into formal education at all levels, but also offer workers sufficient lifelong learning and career change opportunities. In Sitra's view, we will not need too many general circular economy experts, but we will need more construction workers, economists and farmers, for instance, who understand how circular economy practices could be practically implemented in their work.

2. We need to foresee and manage the social impacts of the transition to a circular economy. It is likely that during the shift to a circular economy, new jobs will emerge, some jobs will be lost and most jobs will refocus. Sitra believes that it is important to foresee the social impacts of the circular transition on regions, industries, communities and workers in specific fields. By foreseeing these impacts, we will be able to direct support measures to where they are needed the most.
   
   
3. Circular economy jobs must be decent jobs. In shifting to the circular economy, business models can create non-conventional ways of working that may not be well integrated into labour legislation or international standards yet. For instance, the platform economy is a trend that might increase through the mainstreaming of circular business models. While building circular societies, we also need to build structures that support social equality in the work-life and working conditions.

4. The transition must be global. In a circular economy, we will extract less virgin raw materials and consume less non-recyclable and disposable items. It is important to ensure that industries, regions and countries whose economies rely on the sale or handling of primary resources can start building their own circular economy markets and closed-loop clusters. This can be done, for instance, through assisting 'circular economy beginners' by providing support, capacity building and funds, or by creating trade policies that boost circular economy solutions.

5. A fair transition to a circular economy requires teamwork. The transition to a circular economy must be planned and executed in collaboration with the people and communities that experience its impacts in their daily lives. By doing it together, the new circular economy will be more durable, sustainable, and fair. There will not be many “one size fits all” solutions, but detailed solutions for specific industries, regions and communities.

Since updating their strategy, Sitra has taken steps towards making these visions a reality. Together with Circle Economy, it wants to make sure the social impacts of the circular economy across sectors and continents are understood. Sitra is always interested in new openings and international collaboration with other experts and organisations. If these topics are also on your desk, we would love to catch up!

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Sitra will facilitate a global dialogue on circular economy at the World Circular Economy Forum (WCEF) that will be held online this year. You can join the discussions and side events here. Sitra will host a WCEF side session on the just transition to a circular economy in collaboration with Circle Economy and the IISD later this year. There will be more information about the event on Sitra’s website soon, so stay tuned!