Green jobs are a hot topic. The question is not whether the cleantech industry is generating significant employment, but how to maximize job creation. As a growing company, I am frequently asked about how many jobs Digital Lumens is creating and where those jobs will be? People are trying to size up our potential impact on the local economy as an employer. In thinking about that question, I have created three categories of Green jobs:
- Direct – Jobs created by the Green companies themselves (e.g., chemical engineers, manufacturing engineers software engineers, assembly line workers and others);
- Implementers – Jobs enabled or expanded by the Green companies (e.g., home energy auditors, solar installers, electricians, and others); and
- Indirect – Jobs created or saved because of energy efficiency dollar savings.
While I am not an economist and don’t pretend to be one, there is definitely a multiplier among the three categories in terms of how many jobs are created. One engineer hired in a Green company can design enough product to keep hundreds of electricians (implementers) busy, and maintain thousands of indirect jobs through energy savings. Is the multiplier the same from sector to sector? Will a Lithium-ion battery engineer drive as many jobs as a solar technology or lighting company? I do not know. But the downstream relationship is real.
What I do know is that there is too much focus on the Direct jobs. States are falling over each other to attract cleantech-manufacturing facilities, luring businesses with subsidies and tax breaks. But in many cases, Direct jobs are not where the most significant job-creation impact will be felt. The Implementer jobs – those enabled by the widespread adoption or deployment of the technology – are critical. And, importantly, those jobs are available far beyond the winning state’s lines.
The Indirect jobs are, admittedly, harder to quantify. But every company that saves money by adopting an energy efficient technology reduces the monthly electricity bill, generating savings. Those savings can be invested in business growth, employees, capital projects or further energy efficiency initiatives, and are the byproduct of the initial cleantech job.
So am I saying that the number of Direct jobs being created is not important? No. Not at all. But I am saying that it is only one measure of the economic impact of a cleantech company, and that the second- and third-order impacts are potentially much more significant.
My modest proposal? Do not ask a cleantech company where they are manufacturing and think that the answer tells the whole story. Ask them what their anticipated impact on total job creation will be – Direct, Implementer, and Indirect – and explore that conversation. The answer will be much more interesting.