The EU’s app sector will contribute €63 billion to the EU economy according to a report presented in Brussels. The study was carried out by GIGAOM and NUI Galway for the European Commission. The report, “Sizing the EU App Economy” was presented at a workshop in Brussels where Neelie Kroes,Rovio’s Chief Marketing Officer Peter Vesterbacka and representatives of the digital community discussed the future of the EU app economy. 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.
The study shows that:
EU games app developers lead the field: 28 EU leading companies created 40% of the top 100 grossing apps in the EU and US. Three of the top-five companies are Nordic games developers (1st King.com, 2nd,Supercell, 5th Rovio)with German, French, Spanish and UK app developers also finding success outside their native markets.
Growing market, growing jobs: In 2013, developers earned €11.5 billion making apps for consumer goods, banking, media, retail and other clients. They can expect to earn up to €46 billion through contracts of this nature in 2018. The app boom is creating jobs, for example contract developers Golden Gekko(London/Barcelona) plans to grow its staff 40-50% next year and London-based Grapple Mobile was a 3-person firm three years ago, employs 120 now, and intends to double next year.
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.
Technical bottlenecks and fragmentation were also a cause for concern. Roughly a quarter of developers wanted to see 4G develop more quickly in Europe. Around 35% were frustrated by the lack of interoperability between platforms like Android, iOS, Facebook. A majority of developers complained of their de facto total dependence on platforms developed by American giants, with subsequent revenue impact.