EU's app economy is challenged

Warc, 11 August 2014

LONDON: Up to 1m direct and indirect jobs have been created by the app economy in the European Union (EU), but Europe's share of the global app market is weakening in the face of competition from abroad, a new report has revealed.

In an update to last year's App Economy Forecasts 2013-16 report, VisionMobile, the mobile business research firm, said the EU has secured almost one-fifth (19%) of global app revenues which will be worth $16.5bn this year.

Even though this represents strong annual growth of 12%, it lags behind a global growth rate of 27% that is being driven to a large extent by developers in Asia.

The app economy in the 28-member EU was worth $13.2bn in 2012 compared with $40.4bn in the rest of the world and it has grown 25% over the past two years – but that compares with 73% growth in the rest of the world over the same period.

Although the report said some loss of global share is unavoidable because most smartphone penetration is now taking place in developing markets, it recommended EU app firms seek out new markets.

European developers are well placed to export to English-speaking markets and South America, VisionMobile said, but they would probably need local partners or specialist support to succeed in Asia.

Furthermore, it urged EU policymakers to do all they can to keep app entrepreneurs from relocating to Silicon Valley if they want to make sure Europe makes the most from the future growth of the app economy.

Just how important that growth has been for job creation is revealed in other findings from VisionMobile.

It said the app economy has created 667,000 direct jobs in Europe – 406,000 as developers and 261,000 in sales, marketing and other roles – but supports up to 1m jobs in total across the EU as a whole.

Data sourced from VisionMobile; additional content by Warc