"Green New Deal, Lack of Differentiated Green SME Policies...Urgent Support Needed"

Goal to Create 659,000 Jobs by 2025
7 out of 10 Environmental Companies Have Fewer Than 10 Employees 'Micro'
Promotion Agency "Urgent Policies Needed to Overcome Barriers for Green SMEs"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] There have been calls to overcome the employment crisis caused by COVID-19 through the transition to an eco-friendly and carbon-neutral economy.

It is suggested that the hydrogen industry, which can replace fossil fuels, and the eco-friendly vehicle market should be regarded as future growth engines to enhance job creation capabilities, and customized education and training programs demanded by companies should be planned.

According to the "Research Report on Support Policies for SMEs in the Green New Deal Sector" recently published by the Small and Medium Business Technology Information Promotion Agency, as of 2018, there were a total of 58,235 domestic environment-related businesses, employing 447,544 people in the environmental sector.

Only 1% of environmental companies have more than 300 employees, and companies with fewer than 10 employees account for 71.2% of the total, indicating that the domestic environmental industry is at a small-scale level. The average sales revenue of environment-related companies was 1.71 billion KRW.

"Urgent Need for Support Policies for Green SMEs"

Our government is promoting the 'Green New Deal' policy not only to respond to climate change but also to create jobs and secure new growth engines.

By 2025, it plans to invest a total of 73.4 trillion KRW (42.7 trillion KRW from the national budget) to create 659,000 jobs and reduce greenhouse gas emissions by 12.29 million tons.

However, the Small and Medium Business Technology Information Promotion Agency pointed out in the report that the Korean New Deal project may have limited effectiveness in terms of new industry and job creation capabilities.

The agency stated, "The projects included in the Korean New Deal are short-term projects based on fiscal spending," adding, "It is difficult to expect continuous job creation and maintenance."

They also said, "It is hard to find new SME support policies differentiated from existing projects in the Korean Green New Deal policy," emphasizing that "support policies for green SMEs are urgently needed."

Furthermore, they noted, "If small businesses and startups can introduce innovative processes and systems, they can succeed," and "The eco-friendly transition of existing practices is another attractive path for SMEs to participate in the green economy."

The agency recommended urgent support policies to overcome major barriers for green SMEs, including ▲ knowledge sharing ▲ raising environmental awareness ▲ strengthening legislative support ▲ supporting technology development and formation ▲ improving market accessibility and implementing green taxation.

Additionally, they advised that in the prolonged COVID-19 pandemic employment crisis, measures should be taken to prevent workers in declining industries from losing their jobs.

The agency stated, "In the process of transitioning to an eco-friendly and carbon-neutral economy, it is necessary to plan strategies that provide customized education and training demanded by companies to workers in declining and stranded industries so they can be re-employed."

Electric Vehicles and Renewables: Increased Job Creation Potential

The agency presented the potential for job creation through strengthening new value chains in the automotive sector, including electric vehicles.

The Association of the European Electrical Industry (AIE) forecasted that if electric vehicle sales reach 35% of new car sales in Europe by 2030, about 200,000 full-time jobs will be created.

The renewable energy industry also creates jobs as governments worldwide pursue climate goals and broad socio-economic benefits.

Globally, renewable energy accounted for 11.5 million jobs in 2019, an increase of 500,000 from the previous year (11 million). Notably, solar power accounted for 33% of the global renewable energy workforce in 2019.

Spending one million dollars on renewable energy creates an average of 7.49 full-time jobs, nearly three times the 2.65 jobs created by fossil fuels.

The agency projected, "Renewable energy already employs more people than fossil fuels and will occupy more future energy jobs."