Macroeconomic Data
■ A Growing Market in France and Around the World
The eco-enterprises sector, driven by strong momentum, has an increasingly significant economic weight. Globally, while estimates vary in volume, they all reach the same conclusion: the environmental market represents a substantial percentage of global GDP (over 2%).
In fact, the market is valued at nearly $1,400 billion. This estimate can be compared to more high-profile strategic sectors such as luxury goods and services ($1,150 billion) or pharmaceuticals ($855 billion).
Today, OECD countries still represent nearly 80% of market share, but the catch-up dynamics of emerging economies are gradually changing this distribution.
In an increasingly competitive market, no position is guaranteed. Since 2006, France’s export market share has continuously declined. Using exports as a benchmark, Germany holds a leading and strengthening position, followed by the United States.
It is likely that the playing field will be reshuffled in the coming years, as many countries have become aware of the stakes and are developing ambitious policies and resources to position themselves in the environmental market. For example, South Korea has implemented a five-year plan with the goal of joining the top five.
Recent stimulus plans are very illustrative in this regard:
Despite methodological limitations in assessment, these figures still provide a meaningful overview, consistent with field observations, and point to the countries expected to take a leading role in the coming years.
These strategic choices are not random. The combined effect of the inevitable rise in fossil fuel prices and the increasing environmental demands of populations leads to a projected growth in demand.
The Eco-Enterprises Sector in France: A Key Player
Eco-activities production reached €69.9 billion in 2010, or about 2% of national output. This is a significant volume when compared to French economic pillars like the pharmaceutical industry (€49.5 billion) or commercial catering (€50 billion).
However, it remains proportionally much lower than the eco-enterprise sector’s share of GDP in other countries such as Germany (3.1%) or Denmark (4.4%).
Although impacted by the crisis like other sectors, eco-activities rebounded more quickly with nearly 8.5% growth in production between 2009 and 2010 — a sign of the sector’s dynamism and strong underlying trend. From 2004 to 2010, the average annual growth rate in production was 6%.
The sector’s dynamism is also visible through the lens of trade balance. It is a net contributor to France’s trade balance recovery, with a surplus of around €1.1 billion. Export volumes total €6.1 billion, about 1.2% of total exports. However, much more could be achieved, as only 8% of eco-enterprises are active internationally.
In OECD countries, slow growth is expected in traditional sectors such as water and waste, but explosive growth is forecast in sectors combating greenhouse gases (renewables, green buildings, decarbonized mobility). Notably, Germany consumed 50% of global photovoltaic solar panel production in 2010.
In large emerging countries (China, India, Brazil), there’s both a catch-up in traditional sectors (water, waste, soil, air) and a boom in the low-carbon economy: renewables, energy-efficient construction (these countries are bypassing traditional methods — as with mobile phones skipping landlines), and decarbonized mobility (trains, trams, electric vehicles, etc.).
In developing countries, particularly in Africa and Southeast Asia, urban population booms will be coupled with strong demand for basic services like water supply, sanitation, waste management, and renewable energy.
Thus, French companies will need to deliver different offerings: innovative techniques (OECD countries), proven mass-production processes (emerging markets), or robust/decentralized technologies (developing nations). Approaching these markets requires dedicated products, techniques, and business models — as well as leveraging France’s competitive advantages (Francophone Africa, Latin countries, centralized political systems). The “Better Living Together” sustainable city strategy by the Ministry of Foreign Trade, aligning French offerings with rising global demand, reflects this approach.
However, it’s important to note that strong domestic demand is a *sine qua non* condition for France to sustain a leading eco-sector. Given the structure of its production fabric and the risks tied to export-driven activities, the sector must rely on a robust national market to expand internationally. Care must be taken not to establish public engineering bodies or operators that could cannibalize a domestic market critical to our companies’ international success.
In terms of domestic market demand, public sector clients represent a significant share of the environmental market. It’s estimated that eco-enterprise market opportunities in France are evenly split between public and private sectors.
Public procurement is primarily driven by local authorities, the State, public institutions, public-private partnerships, waste/water syndicates, and social housing entities.
In the private sector, main clients include large groups operating in planning, construction, waste collection and treatment, water management, and industrial sectors.
Green Jobs: Non-Offshorable Employment Opportunities
In 2010, excluding sustainable construction and mobility, 452,600 full-time equivalent workers were employed in eco-activities, and nearly 952,000 when including related activities. Employment in eco-enterprises grew by 4.5% in one year.
Between 2004 and 2010, job growth was remarkable — nearly 20%.
This growth was especially driven by the renewable energy sector, where employment increased by 25.5% between 2007 and 2008 and by 19% in 2009. Despite the devastating regulatory shift for solar PV (nearly half of jobs were lost in 2011), renewables remain — along with water and waste — among the sector’s largest job creators.
The sector offers significant job potential in this period of labor market tension.
Since 1997, there has been a steady increase in enrollment in environmental studies (+2.4% annually). Professional bachelor’s degrees have seen the largest growth, with around 50% more students between 2000 and 2008.
This can be partly explained by the fact that most of these jobs are tied to local resources (waste, water, soil, etc.) and are thus non-offshorable. Eco-enterprises therefore act as key players in local economies, supporting regional economic networks.
It’s also notable that 71% of eco-entrepreneurs consider human capital to be a key factor in their development. Many report difficulty in recruiting specialized profiles (engineers, sector experts) and express a need for external recruitment support, especially for startups.
The sector requires a highly diverse range of jobs, spanning the full spectrum of qualifications.
PNUE
BCG Luxe Redux: Raising the Bar for the Selling of Luxuries, June 5, 2012
Source: IMS Health Market Prognosis, March 2011
Coupling French Supply with Global Demand – Strategy for French Foreign Trade, December 3, 2012
http://eng.me.go.kr/content.do?method=moveContent&menuCode=pol_gre_vision
“Green Industrial Sectors: A Public Policy Priority,” *Le point sur*, MEDDTL/CGDD, No. 126, May 2012
Pharmaceutical Economy: Turnover Trends and Distribution, June 28, 2012
Economic Study on the Catering Sector, Status Report, February 2012, Eurogroup Consulting
Action Plan to Promote Investment and Business Creation in Eco-Technologies, Chambolle, 2006
“The Eco-Activities and Environmental Employment in 2010: Preliminary Results,” *Chiffres et statistiques*, MEDDTL/CGDD, No. 301, March 2012
“Green Growth Activities, Jobs and Occupations: Scopes and Results,” *Etudes et documents*, MEDDTL/CGDD, No. 43, June 2011
“Key Environmental Figures: 2012 Edition,” *Repères*, MEDDE/CGDD, September 2012
Sources: Insee national accounts (base 2005), Soes in *Defining and Quantifying the Green Economy*, Pierre Greffet, Amélie Mauroux, Pierre Ralle, Céline Randiambololona
ACFCI, TEE, Ubifrance
“Eco-Enterprises: Study on Support Systems and Needs Assessment,” ADEME, August 2011