€63 billion EU app economy will support 4.8 million jobs in 2018

EU developers took in €17.5 billion in revenue in 2013, and Gigaom Research forecasts that figure will increase to €63 billion in five years. But you might be surprised where a lot of that revenue comes from. EU developers collected more than half that total –  €11.5 billion in 2013 – from contract labor. Much of the developer-for-hire business is for companies that aren’t really in the app business per se but use apps to support and market their mainstream offerings like financial services, retailing, and packaged goods.

Many of the current market dynamics of the app economy have the air of a gold rush. A relatively small number of opportunistic companies have  learned how to make the economics work, and dominate app store revenues, mostly with games. But that’s just one part of a much broader ecosystem that includes independent developers acting as contractors, small and large agencies, and the developer workforce within enterprises. At the risk of exhausting the metaphor, the surest bet in a gold rush is selling shovels.

As part of the Eurapp project for the European Commission, Gigaom Research  surveyed both independent and in-house developers as inputs into an industry model of revenues and jobs. Our analysis indicates that EU developers earned €5.9 billion from apps sales and advertising in 2013. EU developers account for about 40 percent of global app revenue and EU consumer spending accounts for 30 percent of the global total.

Source: Gigaom Research, 2014

The proliferation of apps beyond gaming, specifically into roles as marketing vehicles or as the means to deliver services like consumer banking and sales force automation, will drive the demand for contract labor. We project that EU developers will take in €46 billion in contract development work in 2018, up from €11.5 billion in 2013.

Source: Gigaom Research, 2014

Those revenues support a healthy job environment. The EU app-developer workforce will grow from 1 million in 2013 to 2.8 million in 2018. Additional support and marketing staff result in total app economy jobs of 1.8 million in 2013, growing to 4.8 million in 2018.

Source: Gigaom Research, 2014

By 2018, we project that nearly 40 percent of those developers will be employed by small independent EU developers. Over 35 percent will work at large independent developers, and 24 percent on in-house app teams. Contract work will account for the majority of the revenue for the small, independents.

Relevant Analyst
P1040724

David Card

VP Research Gigaom Research

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