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.

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 per cent 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.

Apps are self-contained programs or pieces of software which are mostly often designed for mobile devices or social platforms. For example, apps can advise you on the most efficient public transport route, help you bank online, track your runs or bike rides, match you with a potential partner, give health advice, games to entertain and relax. On the business side, many companies develop apps in house, or through contractors to support their main business, whether they are in financial services, consumer goods retail, media, etc. They use apps to add to their customer experience and utility, and to help market and sell their goods and services. According to estimates, 94.4 billion apps were downloaded globally during 2013.

Today the app economy employs one million developers, and 800,000 people in marketing and support posts. This could rise to 2.7 million developers plus 2.1 million support staff by 2018. EU buyers and advertisers spent €6.1 billion on apps in 2013, 30 per cent 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!”

The study shows that EU games app developers lead the field, where 28 EU leading companies created 40 per cent of the top 100 grossing apps in the EU and US. Three of the top-five companies are Nordic games developers (first King.com of Candy Crush, second is Supercell while Rovio of Angry Birds is fifth) with German, French, Spanish and UK app developers also finding success outside their native markets.

The Commission said it was 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, and finally, by supporting grassroots initiatives such as EU Code week, organised by Kroes’s young advisers. The first-ever EU Code Week reached 10,000 people in 26 countries in November 2013. This year’s Code week will take place in October.

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