New energy technologies and future labour market outcomes: the case
of solar industry.
1
G. Rossi1
University of Modena and Reggio Emilia, Modena, Italy
The recent economic crisis has highlighted the two main challenges the European
governments are facing: a looming environmental crisis and persistent unemployment
rates. The warming of the climate system is unequivocal, as confirmed, among the
others, by the increases in global average air and oceans temperature. At the same time,
the economic recession had a considerable effect on European labour markets. In
October 2009, the unemployment rate in the EU-27 was about 9.3%, with much
variations among Member States. Young people have been particularly affected by the
recession: unemployment of those aged less than 25 stood at 20.7% in October 2009,
4.5 and 5.7 percentage points more than, respectively, one and two years before.
Experience from previous recessions on the lag between GDP and employment suggest
that, without further policies and targeted measures, the labour market may continue to
deteriorate until the middle of 2010.
The European Union has been taking serious steps to respond both to the climate change
and to the occupational crisis. Looking at the main proposed measures, it is clear that
these two challenges are now considered strictly correlated. Greening the economy
means, among the others, more large-scale investments in new clean energy
technologies (Unep et al., 2008). Today the energy sector is responsible for about 60%
of global GHGs. This is why there is a global call for a so-called “energy revolution”,
mainly based on the development and deployment of low-carbon technologies. The
“energy revolution” will imply substantial investments in all segments of the energy
chain. According to the economic literature (Autor et al., 2003), the introduction of new
technologies has always some effects on labour markets. From a general prospective,
technological progress is a structural reform from which not all the workers are
advantaged: some technologies become obsolete and consequently some competences
are more requested and have an advantage from technological progress, while others
become less useful and wages and employment decrease. Employment policies are
strongly requested to avoid that some groups of workers are particularly damaged by
this process.
This paper reviews some of the occupational and training issues associated with the
introduction of new technologies in the solar industry. Under certain conditions, the
introduction of such technologies into a locality’s existing industries can enhance its
competitiveness and the long-term future of employment. However, the spatial variation
in the different parts of the supply-chain suggests that some areas will have higher
levels of new process technology than others and this will cause some regional gaps.
The analysis distinguishes employment short-term effects and employment long-term
effects. Short-time effects have to do with current investments. Whether these effects
can be sustained (or improved) over time depends on new technologies are developed
and encouraged. It is argued that increased competitiveness through new technologies
may mean job loss in traditional industries but the scale of job losses from new
technologies may be minimized by targeted employment policies. At the same time, the
use of new technologies can be constrained by skill shortages but these may be
overcome by corporate training strategies. Policy issues relate to the measurement of
local demand for new-technology-related skills, the sources of labour for training (both
at the national and local levels), the barriers between demand and supply of skilled
labour, and the reconversion of some traditional professions are deeply analysed.
The key of interpretation proposed by this paper is that the technological progress in the
solar industry should be considered now a driver in rethinking employment policies in
Europe. Besides, only considering the characteristics of these new technologies is
possible to join the efforts against climate change and unemployment. Before going
beyond labour market effects and tackling employment policies’ implications it is worth
asking which are the characteristics of solar industry and which are the current and
future opportunities in technological terms. In order to have a comprehensive overview
of the challenges and opportunities of new solar technologies, a preliminary analysis
based on a supply-chain approach has been conducted. The aim of the preliminary
analysis is to identify not only the characteristics of the technology, but also the current
situation of the solar industry in Europe in terms of consistency and budgeting. From
the available descriptive data and from a qualitative analysis based on the results of
interviews taken to different technological centres, it has been possible to distinguish
the existing professional figures in the European context and the requested skill needs
related to new solar technologies’ development.
Further, the impact of solar technology on labour market in terms of costs-benefits is
analysed. Benefits include firstly the economic growth made possible by greater
productivity and the improved quality of work life experienced by those for whom jobs
are created or upgraded by technological changes. Costs include displacement, extended
unemployment in other industries and reduced earning prospects for those workers with
low-skills. Some regional differences are highlighted.
Taking as a starting point the reasons why the shift into a clean energy economy is
strictly connected with the need of rethinking employment policies, the expected output
of this paper is to identify those policies which will ensure the well and sustainable
performing of labour markets. The aim is to propose a comprehensive framework for
employment policies which takes into account at the same time both energy and
industrial challenges.
References
Autor D.H., Levy F., Murnane R.J. (2003), The skill content of recent technological
change: an empirical exploration, The Quarterly Journal of Economics, 118 (4), 12791333
European Commission (2009), Consultation on the future “EU 2020” Strategy,
Commission Working Document, COM (2009) 647 final
European Commission (2009), Mainstreaming sustainable development into EU
policies: 2009 Review of the European Union Strategy for Sustainable Development,
COM(2009)400
IPCC (2007), Fourth Assessment Report of the Intergovernmental Panel on Climate
Change
Unep, Ilo, Ioe, Ituc (2008), Green jobs: Towards decent work in a sustainable, lowcarbon world, Worldwatch Institute, Washington DC