3FOOD

Third Industrial Revolution Consulting Group
A Side Note on the Job Creation Potential in Luxembourg
Table 1 in this section offered a useful context to understand the seven different economic and
employment drivers that underpin the transition to the Third Industrial Revolution. At this
point, however, it is useful to draw on estimates from other segments in the master plan to
offer concrete examples of how TIR-related investments might positively impact future
employment gains. For example, Germany’s vast experience in retrofitting buildings provides a
useful insight for the job creating potential in Luxembourg as it embarks on its own nationwide
retrofitting project. To date, as reported in the Buildings section of the master plan, 342,000
apartments have been retrofitted, creating or saving more than 141,000 jobs in Germany.
Looking across more of the European economy, a 2011 analysis by the Buildings Performance
Institute Europe (BPIE) suggested a potential energy savings in EU buildings ranging from 32 to
68 percent by 2050, depending on the scope and scale of upgrade investments. The investment
cost might range from €343 to €937 billion, with a net consumer bill savings from €160 to €381
billion over the period 2012 through 2050. The combination of investments and net energy bill
savings might drive a net annual employment gain of 500,000 to 1.1 million jobs (see, Table 1 in
the Buildings section of the master plan).
The Stanford/UC Berkeley study noted that with a combination of energy efficiency
improvements and the deployment of solar and wind renewable energy resources, by 2050
Luxembourg could meet nearly 100 percent of its energy needs by renewable energies alone.
For example, of that total renewable energy supply, 67 percent of Luxembourg’s energy needs
could be met by utility-scale Solar PV systems, again by 2050. That would require an upfront
capital cost of 20.5 billion Euros (in 2016€) with a levelized cost of electricity estimated at only
€cents 9 per kilowatt-hour. That would lead to roughly 7,500 construction jobs to build
capacity, and 11,100 permanent operations jobs to operate and maintain the system in
Luxembourg. This highlights an additional advantage of producing renewable energy locally
compared to the current situation where Luxembourg imports fossil fuels.
As noted in the Smart Economy portion of the master plan, an increase in product usage means
extracting higher value from the resources. This leads to an increase in aggregate efficiency and
productivity. A recent assessment by Accenture projected that savings in materials, recycling,
and restoration, will likely exceed $4.5 trillion by 2030 in the global economy while increasing
productivity, reducing fixed and marginal costs, creating net new jobs, and lowering ecological
footprint. An estimated €1 billion of circular economy activities already occur in Luxembourg,
employing upwards of 15,000 citizens, mainly in industry, as well as in buildings and
construction, and retailing. The potential value in advancing Luxembourg’s circularity practices
by yet another €1 billion in net-material cost savings per year would generate several thousand
more jobs within 36 months. This would require scaling circular activities throughout the
automotive, construction, financial, logistics, manufacturing, and RDI sectors.
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