June 11th, 2024 by Manon Klein, Yana Spotar, Susan Kessing (Impact Hub Amsterdam)

Empowering circular startups: policy support for job creation in future-focused cities

Circular cities are considered a vital component of the sustainability transformations needed to secure the future of our planet. Cities are responsible for 70% of the world's material use and consumption and as the global population grows and cities expand, their impacts become even greater. The transition to circularity is not only essential from an environmental perspective, it also presents significant opportunities for economic growth and diverse job creation.

Circular startups will play a crucial role in expediting this transition, but they need targeted support to overcome common obstacles and fulfil their vast potential.

Looking for the Dutch version of this publication?  Read it here


Driving circularity in europe

European cities are currently leading the way in their ambitions to become fully circular by 2050, with the city of Amsterdam a frontrunner.

The city’s Circularity Agenda 2025 and Implementation Agenda sets out its aim of achieving full circularity by 2050. Its plans outline a significant boost to the local economy, creating an additional 3,000 full-time circular jobs by 2025; and adding 8,500 and 19,500 more by 2030 and 2050 respectively. This will have a knock-on effect on the rental and business services sector, creating a further 11,800 jobs by 2050.

From the city of Amsterdam Circular Action Agenda: “Amsterdam is a beautiful city to live, work and visit. A healthy, prosperous, green and sustainable city for everyone. To maintain this, Amsterdam is becoming a circular city, where we do not waste valuable resources and raw materials.”

Despite the city's notable aspirations, currently only 6.5% of Amsterdam’s employment is considered circular. This gap underscores the urgent need for action if the city is to achieve its goals and support a full and timely transition to circularity. 

The Circular Innovation Collective (CIC), a consortium of impact-driven organisations initiated by Metabolic, Impact Hub Amsterdam, and Bankers without Boundaries, aims to help European cities and regions realise their circularity ambitions. At CIC, we recognise the pivotal role circular startups will play in driving this transition and the significant opportunity they have to stimulate job creation. Along with creating new jobs, circular startups challenge traditional business models with innovative solutions that offer a glimpse into the diverse potential paths towards circularity. However, their potential is often hindered by a range of challenges and obstacles that prevent them from scaling up.

About this article

This article draws on our experience from our CIC Venture Support Program in Amsterdam, providing insights and actionable advice for policy makers in cities and regions looking to catalyse their own circular transitions.

We first outline the pivotal role these young ventures play in the transition, before identifying the current circular trends shaping local economies. We then explore the spectrum of circular business models and the types of jobs they can provide; before exploring the common challenges circular startups face along with recommendations on concrete actions that municipalities, policy makers and other stakeholders can take to enable these ventures to scale up, create more jobs, and expedite the transition to circular economies.

About the Circular Innovation Collective (CIC)

We believe the adoption of circular economy objectives and practices can simultaneously support local communities and societies through job creation and the related skills development required for the shift to full circularity. We also believe that demonstrating the employment effects can motivate both companies and governments to focus on expediting the transition to a circular economy.

Beyond environmental gains: the social benefits of circularity

Circularity is often discussed in terms of material use, but its full definition encompasses a social dimension, focusing on non-monetary values and enhancing individual well-being and social governance. According to a report by the Foundation for European Progressive Studies (FEPS), transitioning to a circular economy could have net-positive effects on both GDP and employment, suggesting that it is possible to simultaneously become more resource-efficient and increase job opportunities. As such, many governments are starting to embrace the concept, implementing circular economy strategies and supporting their economic and civil society actors to boost the transition.

More research is needed, however, to fully understand the benefits and impacts on a local level. A 2023 study by Circle Economy and the ILO highlighted the shift needed from macro-level to more localised, city-based research on how circular economies can enhance employment and the quality of work which impacts local people and their livelihoods.

ILO Director

Alette van Leur

“..There is no doubt that a circular economy can help us reach our climate goals. However, the links between circularity and the achievement of social and economic progress remain overlooked. The shift towards a more circular economy offers significant opportunities for the world of work, such as the creation of new jobs and sustainable enterprises. However, fully unlocking the potential of this new economy requires a just transition that addresses the current inequalities and suboptimal working conditions currently present in the circular economy. If not managed properly, these issues could continue to impede progress towards a more equitable and sustainable future.”

With this in mind, the CIC aims to contribute to this understanding, showcasing how local initiatives in Amsterdam can significantly impact employment and foster more inclusivity in the labour market.

Current circular trends shaping local economies

By anticipating changes in the labour market, cities can capitalise on the opportunities presented by circularity. Changes in jobs and the local economy in Amsterdam are anticipated based on the following identified trends:

  • A rapid shift towards (more) circular business models and services

  • Increased employment in repair and overhaul sectors

  • A transition from traditional waste management to high-quality processing of raw materials

  • A shift towards modularity and off-site production

  • Enhanced digitisation of work 

  • Increased reuse of materials and deconstruction with an emphasis on circularity

Municipality of Amsterdam

Rita Molenkamp-Szücs

"The demand from the labor market in relation to transitions to a circular economy is large and diverse: technicians and related professions throughout the chain from design, production, sales, installation to maintenance and recycling of raw materials will be needed on all levels of education—academic, vocational, hands-on."

Circular economy strategies, among other goals, aim to revitalise urban areas, strengthen local economies and boost local employment. Circular economies are largely driven by labour-intensive activities related to the service economy such as maintenance, repair, reuse and recycling, which are deeply integrated within local economies. 

Given that Amsterdam’s workforce already possesses many of the necessary skills for circular jobs, a transition to circularity is particularly feasible for the city. Furthermore, there is a strong push by the municipality toward creating an inclusive labour market in Amsterdam, particularly for migrants and those distanced from employment, guided by dedicated strategies. Yet while the city's circular economy team aims to generate circular jobs, it lacks a cohesive strategy. Here, we seek to underline the advantages of merging these inclusive and circular approaches, aligning the labour market and circularity strategies to achieve the city’s objectives, ultimately promoting job creation through young circular businesses. 

While our insights are drawn from the local Amsterdam economy, with this article and our related guidance on regional circular value chains, the lessons learned can be adapted and applied across locations.

The spectrum of circularity and the critical role of startups in advancing the circular economy

To fully appreciate the vital role startups play in advancing the circular economy, it's essential to understand the various degrees of circularity.

The concept of "circularity" broadly refers to efforts aimed at reducing or eliminating the consumption of finite resources. However, not all circular practices offer the same level of sustainability. For example, while recycling transforms certain materials for further use, it still requires additional resources, making it less sustainable than straightforward reuse of existing products.

Understanding the full spectrum of circular practices can be facilitated by the R-Strategies hierarchy, a framework that categorises these practices according to their sustainability impact.

Read more in part 2 of the CIC guide, p 22

As our global economy progresses towards greater circularity, the transition from lower-R strategies (such as recycling) to higher-R strategies (like redesigning and rethinking) is essential not only for achieving environmental goals but also for fostering higher-value employment. This is where circular startups play an essential role. The strategic positioning of startups, oftentime inherently more aligned with higher degrees of circularity, enables them to adapt new practices more readily compared with established businesses which are often more tethered to linear models. New market entrants are not only better positioned to leverage higher R-strategies but also vital for driving broader environmental and economic transformations. According to a study by Xu, Lu, and Li in 2021, while 54% of circular startups engage in mid-R-ladder practices such as repair or reuse, only 35% of traditional firms do the same.

Creating more diverse and skilled jobs

While the immediate job growth within startups may seem modest, the long-term impact on the labour market can be profound. Circular business models, especially those positioned in the consumption phase (R3-R7) or even higher up the R-ladder, are instrumental in creating diverse and skilled job opportunities. These roles often demand a combination of technical skills, for instance, in materials science and product design, and soft skills such as creativity and problem-solving. Ventures focusing on 'refuse' and 'rethink' strategies, for example, require professionals adept in circular design and systems thinking, strategising ways to minimise waste right from the product's conception. The 'repair' and 'refurbish' strategies bolster demand for skilled technicians and artisans. All of these approaches lead to more complex and fulfilling job roles requiring diverse skills and expertise.

Retail and product-related services, are increasingly encompassing all R-strategies, according to research conducted by organisations such as Circle Economy, Leren voor Morgen, and TNO.

Examples of

Circular business models

  • Peelpioneers and Fruitleather are prime examples of young businesses, transforming fruit waste into high-quality, high-value products.

  • LENA Fashion library is an example of a reuse strategy, providing logistics/transport, cleaning, repair, shop, and opportunities for local designers.

  • Established solutions such as dry-cleaners and tailors, together with newer entrants such as WEAR (sneakers) and United Repair Centre demonstrate examples of maintenance and repair approaches.

Further examples are illustrated in the CIC guide (part 2, page 23-27).

It is in every city and region’s interest to foster the conditions for adopting these new practices, and cultivating an appropriately skilled workforce. The jobs created within new circular businesses enable the workforce to develop essential skills for tomorrow’s sustainable markets and play a crucial role in inspiring and shaping the educational pathways for the next generation. To ensure the workforce is future fit, proactive policy measures and educational reforms are needed alongside strategic partnerships between the various players in the sector and region. 

Circular jobs explained

Jobs in the circular economy tend to fall into three categories (following Circle Economy definitions):  core circular jobs, enabling circular jobs and indirect circular jobs. 

Core circular jobs ensure the closure of raw material cycles. These include jobs in repair, renewable energy, waste and resource management. They require strong manual and/or technical skills.

Enabling circular jobs remove barriers to core circular activities and enable them to accelerate and scale up. Typical examples are jobs in leasing, education, engineering, design and digital technology.

Indirect circular jobs occur in other sectors that do not play a direct role in furthering the transition to the circular economy, but can still adopt circular strategies. They include jobs that provide services to core circular strategies, such as in information services, logistics and the public sector.

Developing and perfecting core circular skills, such as hands-on repairers and knowledgeable senior managers, relies on the availability of jobs within circular businesses. This is necessary both for gaining experience and for providing the incentive for an educational route into these jobs.

The skills challenge in circular jobs

While transitioning to a circular economy presents numerous opportunities, it does not automatically guarantee an increase in employment, according to a KPMG report. The number of jobs tied to the circular economy will grow, but the challenge is more qualitative than quantitative. In other words, while there are enough workers to meet the demand, in theory, the existing workforce may lack the necessary knowledge and skills for these roles. Various organisations, including Circle Economy, Leren voor Morgen, and TNO, are addressing this by focusing on the mismatch between current labour skills and those required for the circular economy.

A study by the ILO showed that jobs in the circular economy often require significantly more work experience and training than in other fields, particularly because of specific skills needed for certain circular activities like sorting, repair, and redesign. The educational pathways for the circular economy therefore must encompass practical and vocational training, as well as higher education and lifelong learning opportunities across all sectors.

Identifying and addressing common barriers for circular startups

As essential as circular startups are, their much-needed impact is often hindered by financial constraints, meaning they struggle to employ, train and retrain enough people to scale operations to the point where they can achieve their potential impact and survive (and thrive) within the existing market. It’s catch 22, as articulated by a young impact venture from the Impact Hub Amsterdam network: “You are often required to grow from your own resources before you get access to the resources, such as funding and grants, that you need to grow”. 

How can startups demonstrate financial traction without the initial financial means required for a proof of concept? At the CIC, we explored a holistic view of what is needed to realise the potential offered by young circular ventures in pursuit of Amsterdam’s circular ambitions. We sought to identify the innovation gaps based on circularity targets, set up a Venture Support Programme to equip these startups with the tools and resources they need to thrive, and are helping secure impact finance for those participating in the program.

Amsterdam textiles pilot

One of Amsterdam’s objectives is to achieve 70% circularity in textiles by 2023. We used this as a basis for our pilot Venture Support Program. We joined forces with the City of Amsterdam (Amsterdam Impact), the DOEN Foundation and Goldschmeding Foundation to conduct the pilot, identifying and supporting the needs of ten relevant businesses and documenting the outcomes. 

Through the pilot, we demonstrated the role ambitious circular businesses can play in creating jobs which are relevant to the circular economy of the future, in both a materials and social sense. The pilot also revealed the challenges circular startups face, and inspired us to create recommendations for how policy makers can step in to alleviate these, and thereby come closer to achieving their circular objectives.

Upon termination of the CIC pilot program, we collected impact data through sequential quantitative surveys and qualitative interviews aimed at identifying the progress, growth, challenges, and continued needs of the participating parties up to one year after its commencement. Compiling these insights, we created an open-access guide to advance circular innovation programs across European cities and regions.

The full guide can be downloaded here.

Participant views on obstacles that hinder the scaling and impact potential of startups:

  • “It's been a challenge to find people that meet the level of ambition and agree with the provided salary and additional compensation/rewards.”

  • It's hard to afford the seniority that's needed.” 

  • We need experts but experts can easily work for big companies like Uber and receive great salaries. We can’t do much with more juniors.”

  • “Creating impact involves not only fair payment to suppliers and key partners but also throughout the entire value chain of production and resource extraction.” 

Hiring and skills barriers

Attracting senior management staff, who are crucial to growth, is often impeded by not having the funds to offer a competitive salary. A lack of wage competitiveness also makes it difficult to keep experience and expertise of all kinds in-house. This, in turn, affects the ability to deliver quality and leverage existing knowledge and skills to train new employees. 

The qualitative research conducted with the startups in the program highlighted challenges including setting appropriate compensation strategies (bonuses, shares, salaries), preparing job vacancies and communications, and defining a growth strategy that clarifies the expertise needed for the company's development and expansion.

The high turnover rates among young, highly-educated employees also pose a challenge, as these individuals are prone to job-hopping early in their careers, affecting the startups' ability to maintain experienced staff and quality. One of the ventures pointed out the “repetitive nature of work” and “idealistic expectations” as reasons for high turnover, influencing their capacity to leverage knowledge and skills for training new employees.

Competitive barrier

Operating ethically across the entire value chain increases costs, making competitive independence challenging. Yet this approach is often integral to a purpose-led circular business, as one entrepreneur in our pilot highlighted,

  • "Creating impact involves not only fair payment to suppliers and key partners but also throughout the entire value chain of production and resource extraction."

Investment barriers

External investment might seem an obvious way to give circular startups the boost they need. Yet, if we look at the situation in the Netherlands, there are very few venture capitalists who are willing to look beyond tech companies with fast expected growth and high return on investment (to the tune of 10x). New circular business models simply don’t deliver returns at the speed and rate they demand since they are typically based on gradual and sustained growth models.

Despite these challenges, the commitment and determination of the ventures in our pilot program to their mission are clear and beginning to show results. These businesses are growing their teams, expanding to new locations, and establishing partnerships. However, to fully realise their potential and maximise their impact, external support remains crucial. 

The startups particularly advocate for investment funds that are patient and willing to commit to long-term impact in exchange for a slower ROI, or other types of financial instruments that align the interests of impact-driven founders and funders towards achieving a vision of a circular economy. They also call for policies that compel businesses to take responsibility for their products and services, alongside stringent regulations on waste management and environmental protection.

An encouraging outcome for job creation

CIC’s Venture Support Program has been helping participating ventures refine their impact strategies, connecting them to impact investors, and assisting them in creating more accurate financial forecasts. These enhancements were crucial in enabling the participants to secure necessary funding and establish valuable partnerships. In addition to these benefits, the program provided mentorship, guidance, and access to networks that might otherwise be difficult to access. This extensive support has allowed participants to dedicate focused time to developing or enhancing their organisations. Consequently, these ventures have not only experienced economic growth but have also expanded their capacity to create jobs, further amplifying their impact in the community. Read more about why an venture support program is important in part 2 of the CIC guide. 

Over the course of eight months of the pilot programme, a total of 31 jobs were created, highlighting the demand for talent and the necessity of supporting infrastructures for circular entrepreneurs. This aligns with the common challenge areas related to the labour transition faced by entrepreneurs with higher R circular business models, as detailed in Table 10 of the CIC Guide Part 2. The created jobs fall under the category of direct circular jobs within core sectors according to Circle Economy’s definition of Circular Jobs, which in the case of the CIC cohort, contribute to stretching product lifetimes, using waste as a resource and collaborating to create joint value. ​​This category includes occupations that directly involve or indirectly support one of the strategies of the circular economy, as according to the Circle Economy Key Elements framework

The majority of ventures participating in CIC are at a growth stage, at which expertise and seniority is required for further growth. Thus, the majority of created roles fulfil functions of project managers, operational managers, sales/finance, head of growth, head of logistics. In other cases, such as at Atelier MADE HERE (see case study below), high-quality roles were created for skilled tailors and repair workers, as well as further on-the-job training offered for hands-on skill development. These positions were offered through various types of contracts, including part-time contracts, and one-year contracts. This raises a critical question: are these ventures able to provide long-term, stable employment, or does a challenge like lack of financing limit their ability to offer more secure contracts?

The creation of jobs among the participating ventures in our pilot is anticipated to continue, with an average increase of two jobs per organisation expected during 2024-2025. This would result in a total of at least 17 new circular jobs across the tracked startups. The entrepreneurs shared their hiring plans as follows:

  • "In 2024-2025, our plan is to hire 2-3 makers, ideally with a serious track record of relevant work experience as tailors."

  • "Our multi-year plan is to create 3 roles in 2025, 3 in 2026, 3 in 2027, and 6 in 2028. These roles will fulfil other functions in the fields of marketing, production, sourcing, and content creation."

  • "Within two years, we need one senior/mid-senior person within each team (operations, business, marketing, development)."

  • "Our goal is to strengthen our team with a practical workforce. There will be people dealing with clients (sales, warehouse, etc.) and people working on product development."

Success story


CIC impact venture Atelier MADE HERE has successfully merged its sewing workshops with Pantar, a local non-profit organisation that helps those distanced from the labour market get back into work. Together, the organisations pool resources to amplify their impact in the circular textile and fashion industry. This strategic collaboration has not only enabled Atelier MADE HERE to uphold its reputation as a circular pioneer but has also improved vocational guidance for Pantar's employees. Specialising in made-to-order clothing and upcycling, the collaboration has created significant job opportunities, particularly for skilled tailors from refugee backgrounds.

During the CIC Venture Support Program, Atelier MADE HERE expanded its workforce, growing from 10 to 16 skilled employees and is currently seeking to add 2-3 more makers to their team.

Prior to the partnership, Pantar had been considering closing the workshop due to various challenges such as its small size, low revenue, and lack of adequate supervision. However, this collaboration has not only prevented the closure but also ensured that the eight employees at Pantar, who faced considerable barriers to employment, could retain their jobs. Now, the partnership is not only preserving jobs but also creating new opportunities.

This partnership serves as a compelling example of how joining forces can strengthen commitment to a shared mission and enhance impact.

In conclusion, the CIC Venture Support Program has demonstrated that circular startups can create jobs under the right conditions, and importantly, the diversity of the jobs they create aligns with inclusion and diversity strategies of cities that offer opportunities for all backgrounds. Yet in order to achieve the ambitious impact of their missions, impact startups must first reach a stage where core operational and business activities are running smoothly and scaling is feasible. Until this stage is reached, ventures will continue to seek external support to ensure survival and maintain competitiveness. 

How policy makers can make a difference

Through the Amsterdam pilot, we gained valuable insights that shaped the development of our Guide for Accelerating Circular Innovation Across Regional Value Chains. We identified the following support that can help young circular businesses succeed, which includes:

  • Investment funds tailored to smaller companies.

  • Venture capitalists who are prepared to accept a slower return on investment in exchange for long-term impact.

  • Local entrepreneurial networks that enhance access to talent, collaborations, and partnerships.

  • Policies that encourage companies to assume greater responsibility for their products by offering circular services.

According to Eva Helmond from Goldschmeding, collaboration is vital for a successful circular transition:

  • "Policy makers responsible for resource and materials conservation (the circular economy) will only thrive if they work together with other disciplines. Get your labour market colleagues involved, policy makers in the social domain and in the economic domain, educational organisations, collective HR innovation, etc. And last but not least: take care of guarantee funds to build vacuums in which ecosystems of entrepreneurs can experiment."

Our recommendations to policy makers for supporting circular ventures to thrive and drive the circular jobs transition locally:

Enhanced support for business development

Recommendation: Implement comprehensive venture support programs for circular startups to assist in the development and validation of business and impact models, conducting research and development, piloting projects, and building customer bases.

Justification: Continuous and multi-faceted support not only strengthens the business foundation but also enhances market readiness. For example, initiatives like CIC can be instrumental in creating vital networks that connect entrepreneurs with stakeholders and potential financial partners, thus bridging critical gaps in the ecosystem.

Financial stimulation through guarentee funds

Recommendation: Establish and promote guarantee funds specifically tailored for circular startups to mitigate investment risks and attract venture capital. Policymakers can break through bottlenecks by arranging such funds for labour-related costs and setting up work-to-work infrastructure (such as training positions).

Justification: Guarantee funds, similar to those being piloted in Brussels, Czechia, and Finland, can provide the necessary safety net for investors, encouraging them to invest in high-risk but potentially high-impact circular ventures.

Focus on craftmanship and skills development

Recommendation: Encourage the development of new educational programs and training centres that focus on craftsmanship skills essential for repair, refurbishment, and recycling.

Justification: Initiatives like Practoraat in Lelystad, the Netherlands exemplify how specialised training in repair and refurbishment can not only create jobs but also support a sustainable economy. Expanding these opportunities ensures a workforce that is well-prepared for the demands of a circular economy, addressing the skill mismatches commonly seen today.

Integration of circular economy and labour market policies

Recommendation: Integrate circular economy strategies directly with labour market policies to ensure that economic sustainability and job creation are aligned and mutually reinforcing.

Justification: By aligning these policies, cities and regions can ensure that the transition to a circular economy also results in the creation of new jobs and supports existing ones, thereby ensuring a holistic approach to sustainable development. Read more about the roles cities can play in part 2 of the CIC guide, page 32.

Conclusion and next steps

Cities need to act now to pave the way for circularity

Cities and regions that want to remain attractive as the circular economy takes hold need to act now to cultivate the right conditions. Helping circular startups succeed is a key part of this: circular startups have the agility, forward thinking, and adaptability to deliver significant, long-term environmental and social benefits.

The CIC Venture Support Program has demonstrated the effectiveness of supporting young startups as a way of boosting a diverse range of jobs and supporting local economies.

For more details on our methodology, results and further guidance, find more information here