The EU's app sector has gone from zero to digital superhero in less than five years. By 2018 it could employ 4.8 million people and contribute ?63 billion to the EU economy, according to a report presented in Brussels today.
The study, carried out by GIGAOM and NUI Galway for the European Commission, shows that Europe's app developers are up to the challenge of taking the global lead. Currently, EU and North American developers generate the same levels (42% each) of app revenues in crucial EU and US markets. Although the future is bright, developers have raised concerns about the skills gap, connectivity and fragmentation which could put the app boom at risk.
Today the app economy employs 1 million developers, and 800,000 people in marketing and support posts. This could rise to 2.7 million developers + 2.1 million support staff by 2018. EU buyers and advertisers spent ?6.1 billion on apps in 2013, 30% of total global app spending, growing to ?18.7 billion in 2018. Consumer spending combined with advertising and contract work could lead to ?63 billion annual revenue for the app sector within five years.
Neelie Kroes, Vice-President of the European Commission, said "In the face of increasing youth unemployment, these figures give me new hope. The app sector is one area of the digital economy where Europe can really lead. But we have to address concerns about connectivity and fragmentation - yet another reason to complete the telecom single market!" Neelie Kroes said "All apps and all mobile devices rely on broadband networks. Yet today, the framework for European telecoms is shattered and constrained. Meaning poor wireless connectivity, connections that can't easily cross borders, apps and services that are blocked or throttled by network operators, prohibitive surcharges to use your mobile abroad. In tomorrow's world, where even cars are connected, where we rely on mobile apps even for our healthcare - resolving them will be absolutely critical. " Addressing the digital skills shortage: roughly 38% of independent and in-house developers said EU companies had difficulties competing with US salaries, 31% and 33% said that developer education was lagging, around 30% said startup developers lacked business expertise, and quarter of all surveyed said there were not enough developers. Worryingly only 9% of developers are female.
The Commission is tackling Europe's digital skills crisis in a number of ways. Firstly, by partnering with industry and other organisations in the Grand Coalition for Digital Jobs. In parallel, by working with schools to bring digital skills right into the connected classroom. Finally, by supporting grassroots initiatives such as EU Code week, organised by Neelie Kroes' young advisors.