Sustainability and Jobs in the Knowledge Economy1
(European Commission, Information Society DG
Abstract: The rapid emergence of a global knowledge economy both
shortens the timetable for progress on sustainable development and also
offers a potential "win-win" alternative to the traditional trade-off
between growth and environmental sustainability. The Lisbon Strategy and
e-Europe initiative to accelerate development of the knowledge economy
in Europe already addresses several aspects of social and economic sustainability.
However, the trends in most resource-use and environmental impact indicators
are still worsening, and much more needs to be done to realise the potential
benefits of structural change in business and employment, notably in the
service sector. The Stockholm and Göteborg EU Summits, and the subsequent
Rio+10 conference give a timely and unique opportunity to establish European
coherence and leadership in seeking sustainable development in the knowledge
economy. However, we also need a new clarification of individual and business-level
responsibilities for lifestyle and business organisation changes, and a
much wider take-up of innovative "win-win" solutions for growth
with reductions in resource use and impacts.
Key Words: information society, knowledge economy, sustainable
development, European Union.
1 European Policies and Strategies
Sustainable development is now a Treaty objective of the European Union,
and strategies for sustainable development are again under critical review.
In December 1999, the Member States asked the European Commission to develop
a coherent European Strategy for sustainable development, which can provide
a common framework for action. A strategy was proposed by the Commission
in May 2001  and adopted in Göteborg in June
2001. It will now become the basis for Europe's contribution to the Rio+10
"Earth Summit" in South Africa in 2002 and an integrated part
of the social and economic development strategy of the EU.
This new debate now takes place against the background of the success
of the Lisbon Summit in March 2000, at which all Member States agreed to
a new strategic objective for "Europe to become the most dynamic and
competitive Knowledge economy in the world, with sustained growth, more
and better jobs, and greater social cohesion". This objective is already
reflected into the e-Europe Action plan adopted in June 2000 - a set of
short term measures to ensure cheaper and secure access to the
1The views expressed are those of the
author(s) and do not necessarily reflect the policies of the Commission
of the European Union
to strengthen investment in people and skills; and to stimulate the use
of the Internet - all by the end of 2002.
Member States have recognised that the spectrum of Government policy
measures must form a coherent whole, and that the social and economic dimensions
to sustainable development are as important as the environmental dimension.
It is as important to sustain social structures and cohesion in society
through policies for social inclusion, as it is to preserve environmental
resources. Economic stability and sustained growth are essential to the
quality of life and employment of most people.
The linkage between this Lisbon strategy and sustainable development
was already made in the Commission's Synthesis Report to the Stockholm
Summit and in the conclusions of the Swedish Presidency. The economic and
social dimensions of Lisbon will now be completed by adding an environmental
element: building a strategy for sustainable development in which economic
growth, social cohesion and environmental protection go hand-in-hand. It
is a strategy for new technology and more investment. A strategy which
offers a transition away from old, environmentally unfriendly technologies
and low quality jobs. This overall approach to sustainability has been
endorsed at the European Council in Göteborg.
The Commission's key target now is to return to the Spring European
Council in 2002 having identified the decisions required to adapt the Lisbon
Strategy to the objectives identified in Göteborg. By Madrid 2002
sustainability will be a central element within the Lisbon Strategy.
Finally, the EU strategy for sustainable development has to be based
on a strong analytical basis, which should as far as possible include an
analysis of the costs and benefits of different policy options over a defined
time span. For this reason, European research investments have been re-oriented
towards sustainable development through the knowledge economy development
in the current 5th Framework programme, and will be further strengthened
in this area in the proposal for the next (6th) Framework programme.
Our continued long-term prosperity depends critically on advances
in knowledge and technological progress. Without these investments, adjustment
to sustainable development will have to happen much more through changes
in our consumption patterns. By promoting innovation, new technologies
may be developed that use fewer natural resources, reduce pollution or
risks to health and safety, and are cheaper than their predecessors.
2 New Challenges and Perspectives
2.1 The Urgency of Action
Intergenerational solidarity was the dominant theme in the original
Bruntland Commission's definition of sustainable development. The concern
was to avoid that we destroy, exhaust or sterilise resources that future
generations might also need for comparable life-styles to our own. This
was applied to resources taken from the environment such as fossil fuels,
as well as to the natural environment as a resource for leisure activities,
for new medicines, or for its ability to renew resources. It can
also be applied to cultural and social capital, but the responsibility
is indirect and to an unknown future.
Transversal solidarity within societies, and globally, was initially
less of an immediate concern, but has emerged as the dominant concern as
economy growth has overtaken population growth as the principal cause of
increasing resource use, and in the debates on social inclusion and the
"digital divide". This is not just a reflection of our joint
responsibility around the world to act together to achieve sustainable
global development, and of the wider recognition of universal Human Rights.
It is also a reflection of the tighter time-scale within we now must achieve
sustainable development. Young people alive today need to develop sustainable
lifestyles (and business strategies) by the time they will share the world
with several billion equally prosperous people in 10 or 20 years time (as
well as with several billion people living in more precarious subsistence).
Enormous population growth has already happened (although it will still
continue for another 50 years or more), and growth in resource use now
comes more from rising prosperity than from population growth itself. It
is, in particular, the development of affordable access to networked services
and business opportunities that is now accelerating growth around the world,
bringing a much larger proportion of the world population into both work
and the consumer economy. This accelerated growth shortens the timetable
within which sustainability must be achieved.
2.2 Growth of the Knowledge Economy
There is wide recognition that the transition to an Information Society
and a Global Knowledge Economy will be the most important social and economic
changes of the next decade. However, while there is optimism that the greater
dominance of immaterial services will offer opportunities for economic
growth without increases in resource use (or even with dramatic decreases),
there is as yet little evidence of greater resource-use efficiency in the
"new economy"2, and no consensus
on how significant progress might be achieved.
The perception that sustainable development inevitably implies constraints
to growth and a new "trade-off" between growth and protection
of social structures or the environment, is now being replaced by a wider
recognition of potential win-win scenarios. In fact, if the knowledge economy
can be both more prosperous and more sustainable, then the best
route to global sustainable development may be through accelerated
technology development, business innovation and structural change. This
changes completely the ground-rules for the policy debate. Sustainable
development is no longer a cost-benefit issue in which, for example, the
benefits of stabilising CO2 emissions are set against the costs
of moving to less "carbon-intensive" fuels .
2Some evidence of gains in the energy-efficiency
of growth in the USA is highlighted in the Cool-Companies report: www.cool-companies.org.
There is no doubt that the revolution in information and communication
technologies is accelerating the shift to a service-dominated economy,
in which more "value" is associated with immaterial features
and knowledge3. This has led many to presume
that these new technologies offer an opportunity for continued (or even
greater) economic growth; with greater social inclusion and with no increase
in material use, or even with factors of 4 or 10 reductions in material
use. Some industries have, in fact, already made substantial reductions
in the "material intensity" of their activities, notably in manufacturing
and in their use of the "built environment" .
A set of case studies of radical innovation with information and communications
technologies  shows that substantial positive benefits
can be achieved in both efficiency and in reductions of material use and
resources. These initiatives are still limited to a few organisations in
a few regions, but accelerated deployment of such innovations across most
business sectors and in all regions could clearly cut overall material
and resource use. The e-Europe initiative adopted in March 2000 is a valuable
first step, but the momentum of structural change will need to be sustained
for at least a decade and re-focused more onto the objectives of sustainable
development, rather than only on accelerating economic growth and widening
The new objectives of sustainable development might then be positive
objectives for more rapid development of a networked knowledge economy,
rather than negative objectives for reduction in environmental damage,
at the expense of current prosperity and growth.
3 Progress Towards Social, Economic and Environmental Goals
Table 1 summarises some of the top-level policy objectives and current
indicators for the different dimensions of sustainable development. Some
of these are relatively well established, others are more volatile, and
most organisations dealing with sustainable development have variants to
The Lisbon Summit and e-Europe objectives of "digital literacy"
for all, increased participation in knowledge work, and increased investment
in life-long learning are a valuable step towards social sustainability.
The Lisbon Strategy also recognises that sustainable development of social
capital in institutions and the social infrastructure of government (education,
care and health services) can also be best assured by accelerated development
of more efficient and responsive e-Government services.
At the Stockholm Summit, Heads of State also addressed the "quality
of work", both in the life/work balance; and in terms of workplace
safety. The Commission has now proposed to develop by 2003 a comprehensive
Community strategy to promote health and safety at work, to achieve a substantial
reduction in work accidents and professional illness as part of the
extended "Lisbon Strategy" for sustainable development.
The creation of the European Central Bank, the Euro and its "stability
pact" are also significant steps towards economic stability and sustainable
growth. Questions still remain about the stability and growth potential
of the new "e-business" economy,
3GDP grew 10-times more than total material
use since 1950 in the USA, and increased by 35% with no change in total
energy use from 1970 to 1990 (US EIA).
but the key measures of stability are now well known - price stability
as ensured through low retail-price inflation ( < 2% per year), and a manageable
level of public debt. Other "stability" measures, such as for
exchange rates and equity-prices may also need to be considered but the
institutional frameworks are largely in place.
3.1 The Most Difficult Area is the Environmental Dimension
While the "end products" of economic activity are being de-materialised
in the emerging knowledge economy, the overall use of physical resources
and materials in both Europe and the US continues to grow. The Commission
has therefore proposed to break the links between economic growth, the
use of resources and the generation of waste and to develop an Integrated
Product Policy in co-operation with business to reduce resource use and
the environmental impacts of waste. The Commission will also propose a
system of resource productivity measurement to be operational by 2003.
Transport growth is one valuable indicator of increasing resource use:
since 1980, the number of air passengers has doubled; car use has increased
by 60% and freight traffic has increased by 75%. The number of vehicles
in use in Europe has increased from 129 million in 1980, to 191 million
in 1990 and to 256 million in 1996. Even e-Commerce may initially add to
growth: The Dutch organisation for road freight transport estimates that
it will add 17% to freight traffic growth by 2005 (on top of the 21% increase
already expected) because of the increased use of vans and small trucks
for parcel deliveries. The Commission has therefore proposed to decouple
transport growth significantly from growth in Gross Domestic Product in
order to reduce congestion and other negative side-effects of transport
and to promote more balanced regional development by reducing disparities
in economic activity and maintaining the viability of rural and urban communities,
as recommended by the European Spatial Development Perspective.
Construction and use of buildings is another key indicator. Since 1980,
new building and construction activities have more than doubled. Heating
and lighting of buildings now accounts for 50% of the industrialised world's
energy consumption: Twice as much as transport and agriculture/industry
. In the UK, nearly half of all CO2 emissions
result from energy used in buildings. Construction takes up 40% of the
total flow of raw materials into the global economy every year - some 3
billion tonnes. This growth in construction is almost entirely associated
with the growth in employment in services and with changes in lifestyles,
notably the growth of commuting and one-person households.
The result is that employment and work organisation in the "immaterial"
service sector now imposes a greater burden of material use on our environment
than manufacturing industry. Most is associated with material use in the
workplace; inefficient use of workplaces, and inefficient organisation
of work. In the Netherlands in the 1990, offices are now only actively
used by their occupants for less than half of the working week; less than
10% of the total time. New "e-work" models, flexible in time
and place, with greater use of shared workplaces, and more work in local
communities can reverse these trends, but only when wide adoption is accompanied
by structural change in work organisation by most companies. Some "new
economy" companies have shown remarkable improvements. IBM has achieved
4% per year
improvements in overall energy efficiency (energy used per $ output)
through the 1990s. Virtually all sales staff operate independently of traditional
offices, and over $1 billion has been saved in real-estate costs.
The Commission has therefore proposed to promote teleworking by accelerating
investments in next generation communications infrastructure and services,
and to diversify income sources in rural areas, including by increasing
the proportion of Common Agricultural Policy funds directed to rural development.
The Commission has also recommended clear action to reduce energy
demand, through, for example, tighter minimum standards and labelling requirements
for buildings and appliances to improve energy efficiency.
4 Public Awareness, Understanding and Commitment
Perhaps the greatest political challenge in the area of sustainable
development is to find a way of getting greater popular and business support
for change. While most people and businesses in Europe now accept that
climate change and further increases in resource use present the greatest
and most immediate risks to our societies and planet4,
few people feel able to change their lifestyles, and many don't even support
government actions, notably in taxation.
Fuel use and greenhouse gas emissions are a particularly striking example.
There is still widespread opposition to high duties on petrol and to congestion-pricing
on roads: most people see such economic measures as a "loss of amenity
value"; reducing their ability to travel and do not understand the
environmental cost. Few people can say how much CO2 is generated by using
a litre of petrol5. Not only is this incremental
contribution unknown, but most people are not aware of the emission-impact
of their activities and anyway feel their "own" emissions are
trivial compared with the total CO2 emissions of 25,000 million
tonnes a year. In addition, the "costs" of climate change are
likely to be borne mainly by poor people in developing countries, rather
than by prosperous people in Europe and the US.
Widespread popular "ownership" of the goal of sustainable
development depends not only on more openness in policy-making but also
on the perception that individuals can, through their own actions, make
a real difference. For example, local Agenda 21 has been effective at promoting
sustainable development at the local level. The education system also has
a vital role to play in promoting better understanding of the aim of sustainable
development, fostering a sense of individual and collective responsibility,
and thereby encouraging changes in behaviour.
New approaches to "governance", but within the EU and globally,
will be essential to progress. Globalisation and network-based activities
(Internet, etc.) raise extra-territorial governance issues, some of which
can only be handled collaboratively
451% of people in the GEO2000 (UNEP)
survey put climate change at the top of the list of their major environmental
5One tonne of air contains 360 grams
of CO2 (360 ppm). Burning one litre of petrol generates about
twice its weight of CO2; about 1500 grams - enough to double
CO2 concentrations in 5 tonnes of air.
between governments, multi-national businesses and civil society organisations:
And structural change in life-styles and business practices throughout
the world - will need the commitment of civil society and the business
Civil society has demonstrated its unease with a purely economic focus
in the MIA and proposed new WTO negotiations. The UN and OECD have recognised
the need for a more open approach in collaboration with business and civil
society: The UN Global Compact; and the OECD Forum. However, simply adding-on
consultation with business and civil society organisations into the existing
set of inter-government frameworks (UN ILO, UNEP and UNESCO; WTO; OECD;
World Bank; G8; and IMO) will complicate and slow down decision-making,
and will not help to rationalise the "Architecture" of global
governance, nor encourage a new "sharing of responsibilities"
between governments, business and civil society.
Public policy also has a key role in encouraging a greater sense
of corporate social responsibility and in establishing a framework to ensure
that businesses integrate environmental and social considerations in their
activities. Some of the most far sighted businesses have realised that
sustainable development offers new opportunities and have begun
to adapt their investments accordingly. In the Commission's policy proposals
to the Göteborg Summit, businesses are encouraged to take a pro-active
approach to sustainable development in their operations both within the
EU and elsewhere.
The EU is itself a model of how to combine economic, social and environmental
policies in an inter-government framework. It is in itself a model of subsidiarity
and respect for diversity in its combination of EU and national responsibilities.
The extension of subsidiarity "downwards" to the regional level
must also be accompanied by a new extension "upwards" to the
global level, and an extension transversally to business and civil society.
A wider public debate, and resource use and emissions trading at the individual-
and company- level, would also give a strong stimulus to the new "win-win"
solutions of structural change in both business organisation and lifestyles
for the knowledge economy. The Commission will therefore establish a
sustainable development "Round Table" of about 10 independent
experts offering a broad range of views, who will report directly to the
Commission President in time for the preparation of the Commission's synthesis
report to the Spring European Council and make recommendations to improve
the coherence of Community policies.
The Union's efforts to achieve sustainable development ultimately
depend on widespread "ownership" of the strategy by individuals
and businesses, as well as civil society and local and regional authorities.
Prospect for public acceptance of the strategy will be greater, the more
it is based on comprehensive dialogue with representatives of society at
| 1. Social Sustainability
|Preserving social cohesion/inclusion.
||The employment rate6.
The literacy, numeracy and "digital literacy" rates.
|Increasing human capital.
||Proportions with school-leaving qualifications,
and in higher education.
|Preserving social infrastructures.
||Effectiveness of health-care and pensions provisions.
| 2. Sustainable Economic Development
|Preserving economic stability.
||Retail price stability.
Public debt and annual deficit.
Equity price stability.
|Sustaining economic growth.
||GDP growth and related "productivity" increases.
| 3. Sustainable Cultural Development
|Preserving cultural diversity and capital.
||Number of people involved in
Number of museums, art galleries, concerts.
Proportion of communities7 with self-managed cultural programmes.
| 4. Environmentally Sustainable Development
|Stabilising total material use: cut per-capita
material use in OECD countries by a factor of 4 by 2010 and by a factor of 10 by 2050).
||Total material use:
- transport use (Truck-kms; km-tonnes; car-kms and km-persons);
- new construction and occupancy rates of buildings.
|Stabilising the climate: reduce greenhouse gas
emissions to 95% of 1990 levels by 2008-1012.
||Total greenhouse gas emissions.
||Proportion of forests and fisheries covered by
Proportion of land in "nature reserve" areas.
|Sustaining water use and food production.
||Water consumption as a proportion of renewable
supply, and land area fit for food production.
Table 1: Objectives and Indicators of Sustainable Development
of the working-age population in work.
7 Social units of more than 10,000
 COM(2001)264 Final: 15/5/01.
 The Interim Report on the OECD Three-Year Project
on Sustainable Development: OECD, May 1999.
 Cool-companies.org: e-Commerce Report 2000.
 Case Studies of the Information Society and Sustainable
Development; Information Society DG-Unit C1, May 2000.
 Green Futures May/June 2000.