The European App Economy 2013

... creating jobs and driving growth

September 2013

The European App Economy 2013

... creating jobs and driving growth

September 2013

The European App Economy is a research report analysing the relative sizes of the app market in the European Union, tracking app revenues and jobs generated by the app economy in the EU28. The report also recommends how the European Union can leverage this vibrant economy and help it grow to its full capacity.

[UPDATE: There’s a 2014 version of this report – available for download here]

The App Economy began with the launch of the Apple App Store just five years ago. Today the App Economy is a dynamic and expanding sector with several competing stores and platforms, including offerings from Apple, Google, Microsoft, BlackBerry, Amazon and others. Downloads of applications – “apps” – total around 100 billion with nearly 1 million apps available across an increasing number of app stores. The economic impact is significant and growing.

In the EU28 we estimate that the App Economy contributes:

  • 794,000 jobs across the whole economy
  • 529,000 direct App Economy jobs, 60% of which are developers
  • 22% of the global production of app-related products and services comes from the EU
  • Revenues of more than €10 billion per annum

This represents only the beginning – further advances in the App Economy are anticipated as a result of increased apps availability and functionality, and improvements in devices and connectivity.

Graphs

ICT Contribution to productivity growth, US

The majority of benefit comes from the use, rather than the development, of ICT. The ICT-driven acceleration of growth in the US was accompanied by a deceleration in Europe. Europe had, up to the mid-1990s, higher post-war growth than the US.

A key finding in the academic literature is that in order to benefit substantially from ICT, markets needed to be transformed and organisations and individuals needed to find different ways of doing things. Bolting ICT onto old systems only gives a fraction of the benefits.

From PC to Mobile Apps Era

While the timeline illustrates key consumer-oriented developments the enterprise market has also benefited from these developments, both through the consumerisation of IT and, increasingly, through a conscious transformation towards mobile and apps. The combination of always available connected mobile computing and low cost applications focused on specific tasks represents a fundamental transformation. The real momentum in terms of mobile and apps began in 2008 with the launch of app stores, coupled with ever more powerful smartphones and subsequently tablets in 2010.

The Global App Economy 2013

At the global level we estimate that revenues from app-related products and services will reach €51 billion in 2013. Most of this amount (82%) comprises revenues outside app stores, which includes contracted services, advertising revenues and e-commerce sales. Previous studies on the size and impact of the App Economy have focused on app store sales and mobile advertising. However, the App Economy has far outgrown app stores to become a much wider and richer ecosystem of products and services.

The Global App Economy 2013

The rate of growth of app consumption and revenues depends on a variety of factors (e.g. rate of smartphone and tablet adoption, consumers’ willingness to pay, range of apps, competition, etc.). The global App Economy is likely to grow at a faster rate than EU28 due to the rapid adoption of smartphones in the massive markets of Asia, Latin America and even Africa, which in turn creates significant demand and opportunities in these markets. A simple projection based on a 10% annual growth rate of smartphone adoption7 suggests that consumption of app-related products and services in EU28 could reach €15 billion by 2016.

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