Environmental innovation and employment dynamics in different technology fields - an analysis based on the German Community Innovation Survey 2009

The employment effects of environmental technologies are in the focus of politicians but studies analyzing these effects for different environmental innovation fields are rare. We use the 2009 wave of the Community Innovation Survey (CIS) allowing for such an analysis at the firm level. Our econometric analysis shows that innovative firms in general are characterized by a significantly more dynamic employment development. Especially the introduction of cleaner technologies as process innovations leads to a higher employment within the firm. The theoretical background of this finding is that cost savings induced by this type of process innovation improve the competitiveness of firms. This has positive effects on demand and thus also increases employment. Especially material and energy savings are positively correlated to employment because they help to increase the profitability and competitiveness of the firm. On the other side, air and water process innovations that are still dominated by end-of-pipe technologies have a negative impact on employment.