Opportunity for apps

There are now more than a billion smartphones in use in the world, up 47% from the 700M in use a year ago, according to Strategy Analytics.

An important new report from the Information and Communications Technology Council of Canada (“ICTC”) says that by year-end 2012 there will be 13 million smartphone users in Canada, up from 9.1M at the end of 2011. These users are said to have “a seemingly insatiable appetite for downloading and using mobile applications”, creating a huge opportunity for developers.

So ICTC has taken a snapshot of Canada’s app development ecosystem, exploring:

  • Occupations engaged in app creation;
  • The indirect and induced employment in the app economy labour market;
  • The economics of app creation: The costs associated with developing apps, funding mechanisms of app enterprises, opportunities and challenges to funding app initiatives;
  • The total expenditure on apps and related products and services by Canadians;
  • The various avenues of revenue generation and total revenue generated by Canadian app-makers;
  • The growth potential of the app economy and estimated job creation in this segment;
  • Support and encouragement required to ensure that the Canadian app makers flourish and consolidate their position on the global stage; and
  • Implications for policy makers with respect to talent, financing, and communications regulation.

The study [full study (630KB pdf)] finds there are 22,800 technical professionals among the 41,300 directly employed in the Canadian app economy. The Canadian app ecosystem generates $775 million per year in revenue and are estimated to reach $1.19 billion in 2014 (up 54%) and $2.2 billion in 2016 (an increase of 184%).

According to the report, nearly half (47%) the jobs in Canadian app development are found in Ontario, followed by 22% in Quebec and 15% in BC.

The report explores some interesting questions for policy makers in its final section entitled “The Way Forward”:

  • Should supporting nascent enterprises be prioritized?
  • Should necessary capital for small app enterprises be ensured?
  • Should creating a job market-ready workforce be emphasized?
  • Should integrating skilled foreign workers more effectively be prioritized?
  • Should collaboration with other sectors be prioritized?
  • Should awareness of global competition be raised?

Let me add a few other questions.

Will government intervention help or hinder Canadians competitiveness in app development? Are there policies that can help Canadians get a disproportionate share of the growing revenue opportunity?  How can Canadian app developers thrive in a global market that has few barriers to entry?

According to the report:

As mobile apps continue to become the preferred means to access and consume digital products and services, it is vital that the app economy stakeholders ensure an enabling environment, a smooth path to progress, and opportunities for growth. These formative years are crucial in laying a strong foundation for sustained success. Sound skills policy, an attractive investment climate, and collaboration among all stakeholders of skilled app workforce are all key ingredients of growth and for attracting investment, as well as for Canada to gain maximum benefits from workers’ productivity gains. The app economy employs a notable number of Canadian workers and targeted measures can create a better functioning app ecosystem to benefit from competition, strengthen the business environment, and improve efficiency.

The apps development ecosystem is nascent and indeed, it is crucial that we establish a solid foundation to enable Canadians to achieve sustained and sustainable success.

How will the apps ecosystem be nurtured in the context of the long awaited national digital strategy, due to be released before the end of this year?

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