Leaders from the EU app economy will gather in Brussels on 13 February for the launch of the Eurapp study report “Sizing the EU App Economy”, where guest speakers including Neelie Kroes and Rovio’s Peter Vesterbacka will discuss the future of the EU app economy. Eurapp is a year-long project run by NUI Galway and Gigaom to look at the opportunities and challenges facing the EU app economy.
Launching the study, Neelie Kroes, Vice President of the European Commission, will highlight the importance of the app economy – and the importance of having the right skills, rules and innovation-friendly environment to support it. “We have to think about the kind of future we want for our children and grandchildren – and seize the huge digital opportunity on offer. European leadership in the area of apps is fantastic – we should be supporting it, and all those who make it work. But the current fragmented patchwork is letting them down: we need the rules for a connected continent.”
This “Sizing the EU App Economy” report focuses on sizing and qualifying the EU apps ecosystem, with an eye towards revenue generation, jobs supported, and the bottlenecks still facing EU apps developers. Key findings from the analysis by Gigaom’s Mark Mulligan and David Card, which is based in part on two surveys of developers targeting EU markets, include the following:
- EU developers will take in €17.5 billion in revenue in 2013, and we forecast that figure will increase to €63 billion in five years. However, you might be surprised where a lot of that revenue comes from. In addition to €6 billion in app sales, in-app spending for virtual goods, and advertising, EU developers recognised €11.5 billion in 2013 from contract labour. And much of the developer-for-hire business is for companies that are not really in the apps business per se, but use apps to support and market their mainstream offerings like financial services, retailing, and packaged goods.
- Fewer than half of the independent developers we surveyed said they were offering services for hire, so that is a potentially untapped market for startups. Similarly, half of the enterprises that did their own in-house development also used third-party developers. Also, in-house developers are by and large more satisfied in achieving their commercial objectives than independents, many of which are frustrated by low prices, free products, or barely-emerging ad revenues.
- The EU app developer workforce will grow from one million in 2013 to 2.8 million in 2018. Additional support and marketing staff result in app economy jobs of 1.8 million in 2013, growing to 4.8 million in 2018.
- EU developers face more business than technical bottlenecks. Increasing users' willingness to pay for apps is problematic, but better discovery vehicles could help relieve high customer acquisition costs. Similarly we see an opportunity for an EU marketplace where companies needing app development could identify, negotiate with, and hire contract developers.
Eurapp is one strand of the Startup Europe manifesto for entrepreneurship and innovation in the EU, and the project is being carried out by the Insight Centre for Data Analytics at NUI Galway and Gigaom Research.
“Throughout the past year, the Eurapp team have interviewed a variety of stakeholders in the EU app economy, and surveyed hundreds of companies that are producing apps, both big and small,” according to NUI Galway’s Dr John Breslin, leader of the Eurapp project. “Some of the main bottlenecks facing app companies in the EU were sourced in these interviews and workshops, followed by crowdsourcing challenges where nearly 100 innovative solutions were submitted to address those bottlenecks.”
The launch event will also feature talks from other leading figures in the app and tech startup space: Peter Vesterbacka, Chief Marketing Officer at Rovio, who leads the marketing and brand strategy for the Angry Bird video game franchise, one of the EU’s top app success stories; Simon Schaefer has angel invested in many European startups and app companies (including 6Wunderkinder, the creators of Wunderlist) and founded the Factory in Berlin, a 16,000 square metre startup campus; and Gemma Coles is director of mobile strategy for Mubaloo, one of Europe’s leading enterprise and consumer mobile app development companies.
Download the full report "Sizing the EU App Economy" [PDF, 720 kB]
Download the infographic that summaries our report [PDF, 7.5 MB]
Download the infographic that summaries our report [PNG, 1.2 MB]