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The European Union is navigating two transformations at once: the move to a climate-neutral economy and the rapid digitalization of industries and services. Both shifts promise growth and innovation, but they also disrupt existing jobs. Workers in carbon-intensive industries and those in routine roles face the greatest risk of displacement. The challenge is ensuring that no one is left behind, and that Public Employment Services (PES) and technology can guide workers through change. 

The Twin Transitions and Their Workforce Impact 

The green transition is reshaping Europe’s economic base. Policies under the EU Green Deal are accelerating the phase-out of fossil fuels, boosting renewable energy, and tightening sustainability standards. According to the European Environment Agency, the environmental goods and services sector employed more than 6.6 million full-time equivalent workers in 2022.  

Within renewables, Europe supported around 347,000 jobs in solar, 273,500 in wind, and more than 416,000 in heat pump technologies. Globally, the renewable energy sector provided 13.7 million jobs in 2022, with solar photovoltaic accounting for nearly five million. 

At the same time, digitalization is changing how work is organized. Artificial intelligence, automation, and data analytics are becoming central to competitiveness. Hiring data shows that demand for AI skills grew by 21 percent between 2018 and 2024, while formal degree requirements in these roles fell by 15 percent. This signals a shift toward skill-based hiring. Yet the same technologies are also reducing demand for routine administrative and manual jobs, creating pressure for many workers to adapt quickly. 

Together, the green and digital transitions bring risks and opportunities. Jobs in fossil fuels and heavy industry are declining, while new roles in clean energy, digital services, and data science are expanding. The balance between them will depend on how effectively workers can move across sectors. 

Reskilling as the Bridge 

Reskilling is the key to ensuring that transitions do not widen inequality. Workers need support to transfer their expertise into growth industries. An engineer from the oil and gas sector can redirect technical skills to offshore wind projects, while a logistics worker can train in data-driven supply chains. The European Commission stresses that greening existing skills is just as important as creating entirely new ones, highlighting that digital capabilities now cut across nearly all sectors. 

PES play a critical role in making these shifts possible. They can forecast labor market demand, identify skills gaps, and match workers’ existing competencies to emerging opportunities. The OECD notes that the green transition requires substantial guidance and retraining, and that PES must also help employers adapt while mitigating regional disparities. Recent studies show that AI skills now command a wage premium of more than 20 percent, higher than the advantage of most university degrees. For workers, this is an opportunity to advance, provided they have access to the right learning pathways. For governments, it is a chance to reduce unemployment and ease the social strains of industrial restructuring. 

Enabling Change through Policy and Technology 

Regulation sets the framework for these transitions. The EU is advancing initiatives such as the Green Deal, the Fit for 55 package, and the Clean Industrial Deal, which mobilizes around 100 billion euros to support clean technology. These measures aim not only to cut emissions but also to drive investment and create sustainable jobs. Yet regulations must be evidence-based and adaptable, ensuring they deliver both environmental and social outcomes. 

Technology, especially responsible AI, provides the tools to put policy into practice. Advanced analytics can help PES anticipate regional labor market shifts, design effective reskilling programs, and offer personalized career guidance. By making recommendations transparent and fair, AI can build trust among jobseekers and employers alike. When regulation, PES strategy, and technology align, the labor market can adapt dynamically, guiding workers from declining sectors into areas of growth. 

As a technology partner to Public Employment Services, WCC helps organizations leverage data and AI to guide workers through economic transitions and match talent with emerging opportunities. To further this mission, our on-demand webinar “Leveraging Knowledge Management in PES for Sustainable Workforce Development in the Green Economy” explores how data and knowledge management can strengthen workforce resilience and support the shift toward a sustainable economy.