Our friends at TechNet and Rey Ramsey have published some interesting findings on the app economy. In a newly released study, TechNet found that the app marketplace has created 466,000 new jobs. TechNet came by this figure through a comprehensive analysis of want ads for app developers combined with a job creation multiplier to include non-developer hires supporting app businesses.
This figure matches well with data our research has generated. In ACT testimony before Capitol Hill earlier in 2011, we identified 600,000 jobs resulting from the emergence of the app marketplace. The rapid growth of the industry has meant tremendous opportunities for software developers. Appnation reports that the app market this past year generated $20 billion. I travel to developer conferences across the country, and at every one I consistently hear the words, “we’re hiring.” A lot of people travel to these events expressly to find developers to employ.
Since more than 80% of the top apps are made by small businesses, our membership of small business app developers gives us a granular view of the industry. While our study arrived at 600,000 jobs, we identified them as “created or supplemented” by the app marketplace. We came to this decision because we found so many developers were netting only about 30k a year, not enough to quit the day job, but enough to help with the mortgage, or save for college.
Whether supplementary or something more, the incomes earned by U.S. app developers have yet to fully capitalize on foreign markets. That time may be coming soon. Apple has just recently begun accepting payments using the domestic yuan in the Chinese App Store. With 961,700,000 mobile users, and more smartphones than the U.S., China will supply the next big pool of customers for app makers. Other BRIC countries will soon follow.
This is still a nascent industry, and the earning potential of many app makers is still limited by marketing challenges, low ad revenues, and piracy. Providing developers a curated store in China to access its rapidly expanding market means that U.S. app makers finally have a chance to get paid directly for their programs. Something most small business software developers have yet to experience. This could provide the opportunity for a lot of developers to move from “supplementing” their income to making apps their job. When that happens it will make the app jobs data a lot more meaningful.