The Belgian environment industry (1995-2005) [ Article 2009100603 - 06/10/2009]

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Recent years have seen a growing interest in the economic potential of environmental protection activities. The protection of the environment necessitates the development, production and marketing of a host of environmentally friendly products and production processes, the development of the skills needed to use them, environmental legislation, an administration to keep track of these developments, etc. All these activities are provided for by the environment industry. This study investigates the development of the environment industry in Belgium between 1995 and 2005.

The OECD defines the environment industry as follows:

The environmental goods and service industry consists of activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and ecosystems.
This includes cleaner technologies, products and services that reduce environmental risk and minimise pollution and resource use.

During the period 1995-2005, the number of organisations (businesses, non-profit organisations, public administrations) identified as performing such environmental activities, and thus considered to be part of the Belgian environment industry, expanded by 44%. Their combined turnover increased by 22% at constant prices, while employment generated by the Belgian environment industry increased by 40%. As a consequence, the share of the environment industry in total Belgian employment increased from 1.5% in 1995 to 2% in 2005. Its share in total output at current prices, however, decreased from 2.4% to 2.2%. This decrease is entirely due to a considerable fall in environmental turnover in 2005. In 2004 the share of the environment industry in total output had been as high as 2.5%.

The majority of the organisations belonging to the Belgian environment industry are small, in the sense that they employ less than 10 people. Just over 60% of the total number of firms belong to this category. Just over 30% of the firms are medium sized, with 10 to 99 employees. The remaining 7% are large companies, with at least 100 employees.

The firms constituting the Belgian environment industry belong to a wide array of different industries. The industries traditionally considered to be environmental, namely the recycling industry (NACE 37) and the sewage and refuse disposal industry (NACE 90), represent only 34% of the total number of firms, 20% of total environmental turnover, and just over 15% of environmental employment. Limiting a study of the environmental industry to these two economic categories would lead to a severe underestimation of its size and importance. No less than 40% of environmental turnover and almost 30% of environmental employment is generated by firms belonging to the manufacturing industries, although they only account for 11% of the total number of environmental firms. The other business activities industry (NACE 74) accounts for 17% of the number of environmental firms, 11% of environmental turnover and 14% of environmental employment. Public administration plays an important role in environmental employment as well, with a share of 17%. Its share in environmental turnover is limited to 6%, corresponding exactly to its share in the total number of environmental organisations.

There is a definite preponderance of enterprises providing environmental services as opposed to those manufacturing environmental goods and those constructing and installing environmental equipment (86% against 14%). This preponderance is somewhat less pronounced when environmental turnover and employment are considered (75-80% against 25-20%).