Europe's big chance in the global apps market
- Apps in the 28 European Union states generated €10.2 billion last year - a figure that is expected to increase to a whopping €14.9 billion in 2016. Will the EU now create the right conditions to build on this solid foundation?
Apps in the 28 European Union states generated €10.2 billion last year - a figure that is expected to increase to a whopping €14.9 billion in 2016.
North America produces 42% of apps, followed by Europe’s 22% and then Asia Pacific on 18%.
Revenue generated by app-related products as a whole is projected to hit €51 billion this year, with app stores making €9.1 billion.
The findings come from a report - The European App Economy: creating jobs and driving growth - published by industry trade body ACT - which is backed by the likes of Apple, BlackBerry, Facebook and Microsoft.
- The majority of people directly involved in the App Economy are developers (62%)
- CIOs, CTOs and IT managers account for 12%.
- Non-developers include people in management, HR, sales, design and marketing.
- There is an estimated further 180,000 people involved on a part-time basis or as hobbyists or enthusiasts.
Jonathan Zuck, ACT's president, commented:
"We know that apps are important, but at some point you have to boil that down to some real, hard numbers so that people get an impression of the scale and stakes.
"We were surprised at how good the numbers were, including the significant role Europe plays in the world economy: nearly a quarter of the global app economy is in Europe."
The report - compiled by Plum Consulting and VisionMobile - makes a plea for policy makers to pay more heed to the need for investment in the sector:
For Europe, the extent and pace of these changes will depend not just on the market but also the European policy environment. The right policy environment in Europe can strengthen each element of the virtuous circle and enhance the complementarities between them. To seize this opportunity, European policy actions are needed.
As importantly, the apps business is a good source of employment at a time when EU countries face rising levels of jobless citizens.
The report claims that there are currently 529,000 people in full-time employment directly linked to the app economy across Europe, including 330,000 app developers.
Add to that another 265,000 jobs created indirectly in sectors like healthcare, education and media and you've got a heady mix of bleeding edge tech and political catnip.
Step forward Neelie Kroes, European Commissioner for the Digital Agenda, who used the report's launch in Brussels to declare:
"In a time of unemployment, the app economy gives me a lot of hope.
"The growth of apps made in Europe is an example of what happens when you create a borderless open economic environment. Now we need to bring that philosophy, and the jobs it enables, to other parts of the digital ecosystem.
"We now need better networks and a single market to support the further success of apps."
It seems the European Commission was on the case anyway though:
"Somehow, I suspected this result. In fact, the Commission has launched its own study, Eurapp, to determine the size of the app economy in Europe — so that economy can be further supported by the Digital Agenda and other initiatives."
As ever with the Commission, the key to success relies on regulation and standardisation from Brussels, although Kroes says the apps economy is:
"not owing to some central design by any regulator.
"When Columbus set sail from Spain he didn't know what he was about to discover, or what treasures he might find. But one thing is certain; there is treasure to be found in the digital economy. And as this report shows, found not just in the New World, but here in Europe too.
"I'd like to absorb that philosophy - and take the barriers away from the online world. Create an environment that promotes innovation and innovators. A connected continent where all can get access, with pan-European networks that support truly pan-European services."
Nonetheless regulation there will be, as Kroes goes on:
"For me, the app economy is a great example of what happens if you create the right environment; give people the framework to create. Borderless, open, and as innovative as your imagination. Now we need to bring that philosophy to other levels of the digital ecosystem."
Kroes cites open data standards as a prerequisiste to illustrate her point:
"New EU rules mean more public data will be available, for re-use at very low cost, if not for free. From public authorities of all kinds, and at all levels: national, regional and European. Now agreed at EU level, EU countries have 2 years to fix it in national law."
That goes some way - but not all the way - to address the requirements outlined in the report of actions governments can take to support the App Economy which include:
- Facilitating access to government data for developers, e.g. mapping, meteorological and real time public transport data as well as information on community level services.
- Enhancing connectivity by making more spectrum available for wireless services.
- Advancing the European single market in intellectual property and communications.
- Embracing app-driven innovation across all sectors, e.g. health, education, enterprise, lifestyle. Ensuring a flexible and supportive business environment for start-ups and entrepreneurs.
More hands-off thinking, less regulating needed from Brussels. Get the broadband and network infrastructure right first.