The number of jobs in the NSW ESG, or environmental goods and services sector, grew by 6 per cent, compared with jobs growth elsewhere in the economy as a whole of just 1.6 per cent, according to research from the NSW Innovation and Productivity Council.
And domestic sales growth in the sector was 7.1 per cent in the sector compared to 2.6 in the overall economy.
The grown in jobs amounted to an estimated 152,000 EGS jobs in NSW, including 40,000 in renewable energy, versus 73,000 in agriculture and 32,000 in mining for a combined 105,000.
The sector is also expected to expand along with the domestic and global markets for EGS.
A quarter of the sector’s new jobs are predicted to be placed in regional NSW, where over 2000 EGS businesses are already operating. The Hunter, North Coast and Illawarra regions were among the most popular locations for EGS industries.
The sector is comprised of businesses and research organisations geared towards areas such as waste, water, and energy management.
NSW’s EGS sector is booming
According to the report into innovation in the NSW EGS sector, recent global growth trends in the EGS sector have far exceeded those of the wider economy, with environment-focused businesses almost three times more likely to be hiring than other businesses globally.
In NSW, this was mirrored by a domestic sales growth of 7.1 per cent in the sector for the 2017-18 period: up to $43.9 billion, $10.9 billion of which was in renewable energy. The state’s overall economy, on the other hand, rose by just 2.6 per cent to $593 billion.
Exports were found to make up much of the sector’s demand however, with the top four export markets being Japan, South Korea, China and India. The current estimated worth of EGS exports was recorded as $3 billion, including $784 million in renewables.
The report explained “booming economies and an increasing concern for environmental issues from a growing middle class have produced strong regional demand for EGS”.
NSW EGS businesses confirmed that much of the demand for their products was coming from mature, international markets with more stringent regulatory standards than here in Australia.
The state is leading the pack
NSW is home to 43 per cent of Australia’s EGS businesses and 44 per cent of its “innovative” EGS businesses, roughly double that of the next strongest state: Victoria.
It identified a number of reasons for this position, including NSW’s strong academic and research presence.
The home of various internationally recognised best practice policies also put the state in good stead. The report suggested that these policies have “enhanced [NSW’s] strong industry base and driven local innovations”.
These policies include the Energy Savings Scheme and NSW-run National Australian Built Environment Rating Scheme, the latter of which has driven much of the state’s strength in building technologies with domestic sales of $3.4 billion and growth of 10.7 per cent in 2017-18.
The report also stressed the important role state government regulation, policy and initiatives play in driving the strength and direction of the EGS sector. It suggested there was a direct flow on effect of governments’ leadership to the growth of the sector.
In NSW, funding for the NSW Environment Protection Agency was highlighted, particularly in the water sector, as was the role of the former Office of Environment and Heritage (which has since been subsumed into the mega-department of planning and industry) for providing “an extensive range of environmental grants and initiatives that directly or indirectly engage with the EGS sector”.
A “global shift” in attitudes is occurring
Within the EGS fields, the report sensed a “global shift” in attitudes. It found people, government and business were increasingly moving away from viewing environmental impacts as “expensive consequences that are borne by unrelated third parties”.
Rather, new technologies and innovative processes are increasingly recognised as tangible ways to increase sustainability and improve wellbeing, while proving economically valuable.
Challenges for the sector in the future
Stressing the significance of the state government’s policy and regulation in shaping the EGS sector, the report also suggested the country’s more permissive environmental regulations were leading to less demand for product and innovation.
“This prevents innovators reaching the level of turnover required before they can make the investments in manufacturing and other infrastructure needed to service high demand international markets,” the report found.
The report also noted that proving the environmental credentials of new products to a skeptical market is a major challenge. It suggested a general lack of confidence in novel products within the public as a hurdle to many wanting to break into the market.