European App economy to generate €63bn by 2018

Outsourcing and BPO

by | 14 February 2014

The app economy employs one million developers, and 800,000 people in marketing & support personnel , which is expected to grow to 2.8 million in 2018.

According to study commissioned by the European Commission, app economy in the region will generate €63bn in revenue by 2018, rising from €17.5bn in 2013.

The study carried out by GIGAOM revealed that the developers pocketed about €11.5bn by developing apps for consumer goods, banking, media, retail and other clients and the study estimates that the developers could earn about €46bn during the forecast period.

Buyers and advertisers in the region spent €6.1bn on apps in 2013, 30% of total global app spending, which is expected to grow to €18.7bn in coming five years.

European App Economy

The report revealed that the app economy employs one million developers, and 800,000 people in marketing & support personnel , which is expected to grow to 2.8 million in 2018.

App economy claimed to have created 1.8 million additional support and marketing jobs which could grow to 4.8 million in 2018.

European Commission vice president Neelie Kroes said in the face of increasing youth unemployment, these figures give 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!" Kroes said.

About 40% of the top 100 apps in the EU and the US were developed by 28 companies from the region, while top three of the game developers are from Nordic region, with first, second and fifth position is taken by King.com, Supercell, Rovio respectively.

Apart from Nordic developers, some German, French, Spanish and UK app developers also finding success outside their native markets.

EU app developers generated 42% of the app revenue across the US and EU, while similar percentage of revenue was generated by developers by North American app companies.

Despite generating huge revenue, the app economy is not with free from challenges as a digital skill shortage, lack of 4G penetration anda lack of interoperability between platforms like Android, iOS, Facebook still hinder the market.

About 38% of independent and in-house app developers said that the companies in the region fail to compete with US salaries, about 31% and 33% complain about lagging developer education.

30% of the startup developers surveyed said they lacked business expertise, and quarter of them said there are not enough number of developers.

Neelie Kroes continued, "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."

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