But, really, how big is it?
The Financial Times has a copy of a Google report showing how Britain is powering ahead in the App economy. It appears to come from a research outfit called Vision Mobile, whose research is so good it is mostly worth paying for. Apparently.
Figures are confusing. A publicly available VM report says “the global app economy was worth $68 billion in 2013 and is projected to grow to $143 billion in 2016.” Apple alone sold $10bn in 2013. But “sales from making smartphone applications” will exceed £4bn this year, according to the FT story. About eight thousand companies are involved, “employing close to 400,000 people”. But this last fact looks highly misleading, as it probably includes all sorts of people not sitting around on bean bags banging out code. It would be like saying “restaurants that sold ice cream employed half a million staff”. I bet somewhere an Ice Cream Industry lobbyist is pondering just that.
The VM report has more of interest, particularly this: 60% of developers are “below the app poverty line” = less than $500 per app per month. This is clearly a distribution with a long tail.
What should we make of this? First, here is some killer context: no matter which number you pick, these revenue figures are tiny in the context of global IT. Consider this Economist story (from Gartner research): Financial services spent $500bn on IT – a fifth of all spending. So total spending is $2.5 trillion. Even the biggest offered number suggests the App economy is barely 2% of this.
And that figure is a cost. IT spending is administrative spending. It is a deadweight on its users. It isn’t all good news.
Finally, the figure for “poverty” and the frequently seen stories about improbably young people breaking through in this sector say one thing to your misery-guts blogger: this is a cottage industry with low entry barriers. Practically by definition this means it is not cutting edge in the sense of pushing back the boundaries of technological innovation. The people who invented coding and connectivity did that: this industry is using those innovations. Good for them, and good for us as consumers. But the language of “high tech cluster” that is used around the creation of code-products can give a misleading impression. This is a growth industry, but I am not sure it is a technological frontier.