Impulses for Growth and Employment through Profitable Savings in ...

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celerate the spread of best practice with special support programmes. Moreover, via its own procurement and by improving consumer information with regard to life cycle cost it can enhance market access and the spread of profitable dematerialised goods and services. And the government can make sure that every university graduate is in command of the ABC of dematerialization in his or her profession. The Question at Issue If economic policy is to commit itself to supporting profitable dematerialization then a pre-quantification of attainable economic results is expedient. To this end the Aachen Foundation Kathy Beys – whose focus of work is dematerialization – has commissioned a study whose results are presented in this paper. The question at issue of this study is: What effects upon private sector turnover, employment and public budgets arise if the observable single-company efficiency reserves of profitable dematerialization are widely implemented in the national economy? Scientific appraisals of the macroeconomic effects of profitable dematerialization are not yet available in Germany as far as the authors are aware. With regard to the similar processes of single-company cost-neutral dematerialization as well as profitable reduction of cost factors other than material throughput selected existing appraisals are summarised below. Appraisals of Single-Company Cost- Neutral Dematerialization In a study commissioned by Greenpeace, the Prognos AG 5 examined the effects on employment and growth of a singlecompany cost-neutral dematerialization through a shift of goods and services from material-intensive to less materialintensive forms of production or sectors. 5 Prognos AG, Mehr Arbeitsplätze durch ökologisches Wirtschaften? Eine Untersuchung für Deutschland, die Schweiz und Österreich, Gutachten im Auftrag von Greenpeace, Hamburg 1999. For instance, a shift of agricultural production from conventional to biological farming and a shift of transport from private to public transport was modelled. The effects for the year 2020 in Germany, Switzerland and Austria were assessed using a combined bottom-up and input-output model. In sum, a reduction of material input by 25% as well as of non-renewable energy sources by 30% in 2020 against the baseline of 1990 led to slightly positive employment effects in all three national economies studied. For Germany the net employment effect was over 160,000 new jobs. Modelling came up with a neutral effect on the gross domestic product (GDP) of all three countries. Meyer and Lutz 6 analysed the effects of the increased input quota observable between 1980 and 1990 in so-called “other market-determined services”, a heterogeneous group in which, amongst others, consultancy companies, engineering companies, advertising agencies and cleaning companies are merged. The effects are determined by a comparison of actual developments with simulated scenarios in a complex econometric Pantha Rhei model that consists of about 50,000 equations, is deeply disaggregated by sector and whose parameters have been estimated econometrically on the basis of developments between 1978 and 1994. One of these scenarios describes de facto the increase of material input by 10% with a concomitant identical input reduction value in “other market-determined services”. This cost-neutral deterioration of material efficiency reduces GDP in the 1980-1990 time span by 2.3% and the wage bill by 2.4% with a slight increase in employment growth (0.2%). These results suggest single-company cost-neutral dematerialization can achieve clearly positive effects upon GDP and the wage bill while only slightly positive or negative employment effects. Similar re- 6 Meyer, B. and C. Lutz, Ökoeffiziente Dienstleistungen und Materialverbrauch. Eine Simulationsstudie mit dem disaggregierten Modell PHANTA RHEI, in Hinterhuber, F. and H. Schnabl (eds.), Arbeit – Umwelt – Wachstum. Nachhaltigkeitsaspekte des sektoralen Strukturwandels, Norderstedt 2002, pp. 190-228. 3
sults are on hand with respect to appraisals of the national economic effects of programmes designed to increase energy efficiency 7 . Appraisals of Profitable Productivity Increases in Single-Companies Material savings can be interpreted as a kind of cost reduction that leads to increased productivity. A dematerialization of the economy has similar effects on employment as productivity increases. An increase in productivity 8 in turn is led primarily by product and process innovation. An abundance of empirical literature is available on this topic 9 . There are three main conclusions. • Many analyses 10 for Germany come to the conclusion that process innovation leads to employment losses. While 7 Cf. for example Bach, S. and C. Bork, M. Kohlhaas, C. Lutz, B. Meyer, B. Preatorius, H. Welsch, Die ökologische Steuerreform in Deutschland. Eine modellgestützte Analyse ihrer Wirkungen auf Wirtschaft und Umwelt, Berlin 2001; Barker, T., Achieving a 10 per cent cut in Europe’s CO2 emissions using aditional excise duties: multilateral versus unilateral action E3ME, E3ME Working Paper No. 29, Vienna 1998; Böhringer, C., and H. Welsch, A. Löschel, Environmental Taxation and Structural Change in an Open Economy – A CGE Analysis with Imperfect Competition and Free Entry, ZEW Discussion Paper No. 01-07, Mannheim2001; RWI/Ifo (eds.), Gesamtwirtschaftliche Beurteilung von CO2-Minderungsstrategien, Untersuchungen des Rheinisch-Westfälischen Instituts für Wirtschaftsforschung, Issue 19, Essen 1996. 8 The OECD provides a good overview in: Organisation for Economic Co-operation and Development (OECD) (ed.), The Sources of Economic Growth in OECD Countries, Paris 2003. 9 For a broad overview see: Lehner, F. and M. Baethge, J. Kühl, F. Stille (eds.), Beschäftigung durch Innovation, Munich 1998. Or for a shorter compilation see: Beeker, D., Technischer Fortschritt und Beschäftigung, Institut der deutschen Wirtschaft Köln, Beiträge zur Wirtschafts- und Sozialpolitik, No. 264, Cologne 2001. 10 Rottmann, H. and M. Ruschinski, The Labour Demand and the Innovation Behaviour of Firms, Jahrbücher für Nationalökonomie und Statistik, Volume 217 (1998), pp. 741-752; or: Blechinger, D. and F. Pfeiffer, Qualifikation, Beschäftigung und technischer Fortschritt, Jahrbücher für Nationalökonomie und Statistik, Volume 218 (1999), pp. 128- 146; also: Flaig, G. and H. Rottmann, Faktorpreise, technischer Fortschritt und Beschäftigung, Eine empirische Analyse für das westdeutsche verarbeitende Gewerbe, ifo-Diskussionsbeitrag No. 59, Munich 1998. Bellmann/Kohaut 11 do not come to clear conclusions, other studies 12 show a positive correlation. A more detailed comparison of analyses shows that a positive influence of process innovations on employment is more likely to occur if many secondary compensatory effects (price reductions, quality improvements, investment growth, wage reductions etc.) are considered. This is a very plausible finding. On the single-company level rationalisation measures lead to employment losses, at least in the short term. Viewed from a national economic and medium term perspective a different picture emerges because released personnel can again find productive employment. • The situation with respect to product innovation is different. Here, most studies show a positive correlation between innovation, i.e. productivity increases, and employment. The INFORGE Model The national economic effects of dematerialization are so complex that they can only be meaningfully captured and empirically measured using a model. For that purpose the INFORGE (INterindustry FORcasting GErmany) model is used. INFORGE is a profoundly structured sectoral forecasting and simulation model that has been updated annually since 1996 and used in many applications 13 . The ver- 11 Bellmann, L. and S. Kohaut, Betriebliche Beschäftigungsentwicklung und Innovationsaktivitäten, in: Mitteilungen IAB, Volume 32 (1999), pp. 416-422. 12 Almus, M. and E. Nehrlinger, Beschäftigungsdynamik in jungen innovativen Unternehmen: Empirische Ergebnisse für West-Deutschland, Diskussionspapier No. 98-09, Zentrum für Europäische Wirtschaftsforschung, Mannheim 1998; or Smolny, W. and T. Schneeweis, Innovation, Wachstum und Beschäftigung, Eine empirische Untersuchung auf der Basis des ifo-Unternehmenspanels Center for International Labour Economics, Forschungsschwerpunkt „Internationale Arbeitsmarktforschung“, Fakultät für Wirtschaftswissenschaften und Statistik, Discussion Paper 33-1996, Konstanz. 13 Cf. for example: Lichtblau, K. and B. Meyer, G. Ewerhart, Komplementäres Beziehungsgeflecht zwischen Industrie und Dienstleistungen, in: iwtrends, 4/96, pp. 1-24; or: Elixmann, D. and A. Keuter, B. Meyer, Sectoral Employment Effects of the Evolution of the German Telecommunications Mar- 4
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