Apple-sparked 'App Economy' created 466K U.S. jobs in 4 years

Posted:
in General Discussion edited January 2014


When Apple launched the App Store alongside the iPhone 3G in July, 2008, it offered both a platform and distribution hub for developers to easily write and monetize software, and effectively created a new economy that a study estimates has generated about 466,000 jobs.



A report released on Tuesday by TechNet (.pdf link) claims that the so-called "App Economy," a term coined in 2009 and brought into mainstream use by a November 2009 Business Week cover story, has grown beyond Apple's App Store to become an entity of its own that has seen steady growth over the past four years.



TechNet, a bipartisan political network of tech CEOs and Senior Executives, tapped consulting firm South Mountain Economics LLC to quantify the size and impact of the App Economy by researching keywords in help-wanted ads, want-ad to employment ratio, tech employment to total employment ratio and job multipliers. The study was meant to illustrate the effect innovation has on job creation, and is not limited to developers alone but also counts management, creative and other staff associated with app production.



What the company came up with was a detailed and surprising analysis of a fast-growing industry that is responsible for roughly 466,000 jobs in the U.S., and includes employment stats from "pure" app companies like Zynga as well as app-related positions from major software developers like Electronic Arts and AT&T.



Included in the study were statistics from the major mobile operating systems including Android, iOS, Blackberry, Facebook and the various iterations of what is now Microsoft's Windows Phone platform.



“The App Economy, along with the broad communications sector, has been a leading source of hiring strength in an otherwise sluggish labor market,” said the report’s author Dr. Michael Mandel, President of South Mountain Economics and former Chief Economist for BusinessWeek.





App Economy by the numbers. | Source: TechNet







California tops the list of states with the highest percentage of App Economy jobs recording nearly one in every four sector positions going to the new industry, and is followed by New York and Washington with 6.9 percent and 6.4 percent, respectively.



Growth for App business employment saw a relative slowdown in growth during 2011, though the average number of tech want ads containing the word "app" was 45 percent higher than the year before.





Source: TechNet







Apple recently announced that it had paid developers over $4 billion since the launch of the App Store, and the company's over 315 million iOS devices sold has helped software engineers make $700,000 during the last quarter alone.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 42
    solipsismxsolipsismx Posts: 19,566member
    I'm upset these jobs aren't going to Foxconn workers¡
  • Reply 2 of 42
    shadashshadash Posts: 470member
    This is an interesting rebuttal to the New York times piece, specifically this:



    "Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple?s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple?s other products. But almost none of them work in the United States."

    http://www.nytimes.com/2012/01/22/bu...dle-class.html



    Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.
  • Reply 3 of 42
    flaneurflaneur Posts: 4,526member
    I can't believe it! I mean I can believe it! I was just wishing for figures like this yesterday!



    The Apple effect begins to be felt and measured. The computer-in-your-pocket revolution is going to be bigger than the first one in the 80s and 90s.



    Ok, it's not just Apple, but they really started it with their pocket Internet browser that just happened to be a phone, in 2007. And I guess the tablet is really the computer in your hand, but it's ten times more accessible than a laptop.
  • Reply 4 of 42
    flaneurflaneur Posts: 4,526member
    Quote:
    Originally Posted by SolipsismX View Post


    I'm upset these jobs aren't going to Foxconn workers.



  • Reply 5 of 42
    MacProMacPro Posts: 19,382member
    Quote:
    Originally Posted by SolipsismX View Post


    I'm upset these jobs aren't going to Foxconn workers.



    You better add the /sarcasm tag before noobs roast you LOL
  • Reply 6 of 42
    gatorguygatorguy Posts: 23,171member
    Quote:
    Originally Posted by shadash View Post


    This is an interesting rebuttal to the New York times piece, specifically this:



    "Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple?s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple?s other products. But almost none of them work in the United States."

    http://www.nytimes.com/2012/01/22/bu...dle-class.html



    Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.



    The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.
  • Reply 7 of 42
    MacProMacPro Posts: 19,382member
    Quote:
    Originally Posted by Flaneur View Post


    I can't believe it! I mean I can believe it! I was just wishing for figures like this yesterday!



    The Apple effect begins to be felt and measured. The computer-in-your-pocket revolution is going to be bigger than the first one in the 80s and 90s.



    Ok, it's not just Apple, but they really started it with their pocket Internet browser that just happened to be a phone, in 2007. And I guess the tablet is really the computer in your hand, but it's ten times more accessible than a laptop.



    It is just beginning, I am seriously thinking of buying another load of AAPL despite the current high. 'I don't think we've seen anything yet' as they say.
  • Reply 8 of 42
    20 app categories. You need to be in the top 100 in a category to make a living from the App Store (I'm an app developer, I'm usually in the top 100, so I base this assumption on my personal experience). If we ignore the fact that one programmer can make several apps (I used to have 5 apps once), and sometimes several people make one app, we will have 20 x 100 = 2000. Ok, let's multiply this by 10, and we'll have 20k. This should include the Apple stuff who "test" the apps and writes the server code and so on, because they are paid from the Apple's 30% cut, and as Apple said that's a break-even business for them. How on earth did they come out with 466k? That's beyond me.
  • Reply 9 of 42
    MacProMacPro Posts: 19,382member
    Quote:
    Originally Posted by Gatorguy View Post


    The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.



    I bet it's a safe bet most develop for iOS plus perhaps some other platforms too while few will be excluding iOS. I'm trying to say iOS is most likely responsible for the bulk of those numbers.
  • Reply 10 of 42
    shadashshadash Posts: 470member
    Quote:
    Originally Posted by Gatorguy View Post


    The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.



    True, but I think it is safe to stay that without Apple the "App Economy" would not exist - at least not nearly on the scale it does now. The $4 billion paid out to App Store developers dwarfs payouts by the rest you mentioned.
  • Reply 11 of 42
    gatorguygatorguy Posts: 23,171member
    Quote:
    Originally Posted by digitalclips View Post


    I bet it's a safe bet most develop for iOS plus perhaps some other platforms too while few will be excluding iOS. I'm trying to say iOS is most likely responsible for the bulk of those numbers.



    Perhaps, but based on this I'd suggest no, not the majority of the estimated jobs, altho Apple would be a significant source.

    "The App Economy includes ?pure? and ?infrastructure? careers across Apple, Google, Facebook, Zynga, Electronic Arts, Amazon, AT&T and other app-related positions at large technology companies based in America...



    Professions in the industry include positions for programmers, user interface designers, marketers, managers, and support staff."



    Of course the entire study is crafted by the tech industry themselves, so no idea how "real" it is.
  • Reply 12 of 42
    This is outsourcing..right?
  • Reply 13 of 42
    Quote:
    Originally Posted by Gatorguy View Post


    The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.



    I agree - obvious exaggeration to say 430K. It's probably only 425K.
  • Reply 14 of 42
    Quote:
    Originally Posted by serkol View Post


    20 app categories. You need to be in the top 100 in a category to make a living from the App Store (I'm an app developer, I'm usually in the top 100, so I base this assumption on my personal experience). If we ignore the fact that one programmer can make several apps (I used to have 5 apps once), and sometimes several people make one app, we will have 20 x 100 = 2000. Ok, let's multiply this by 10, and we'll have 20k. This should include the Apple stuff who "test" the apps and writes the server code and so on, because they are paid from the Apple's 30% cut, and as Apple said that's a break-even business for them. How on earth did they come out with 466k? That's beyond me.



    The problem with your maths is the idea that you have to make money from the app store. A big percentage is made by selling an app to a company that wants an app. For example company x wants an app to go with there eCommerce site, there going to go to an agency to build them one, so you have the person managing the project at company x, then at the agency a sales guy, project manager, technical manager, designer, and tester. The agency however have also learned that developers in developing countrys cost less and now outsource of load of work to them, so the outsorcing company also has a project manager, and a couple of developers. So that's 9 people not including any company boss's, cleaners, hr staff, fincance departments, people related to the agency advertising there services, people involved with hosting services for the apps, the list goes on. The app itself might only be a short term promotional thing, or it may just completely fail, but all those people will still earn money from the company that paid for it to be built.
  • Reply 15 of 42
  • Reply 16 of 42
    gatorguygatorguy Posts: 23,171member
    Quote:
    Originally Posted by anantksundaram View Post


    I agree - obvious exaggeration to say 430K. It's probably only 425K.



    I figured closer to 420K IMO.



    /s
  • Reply 17 of 42
    Quote:
    Originally Posted by shadash View Post


    This is an interesting rebuttal to the New York times piece, specifically this:



    "Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple?s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple?s other products. But almost none of them work in the United States."

    http://www.nytimes.com/2012/01/22/bu...dle-class.html



    Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.





    People have to realize that media is often slap-dash, and upon occasion purposefully so, to the detriment of those the media targets. Amazingly, there was even talk of a Pulitzer Prize for those NY Times articles that left out these salient facts!
  • Reply 18 of 42
    blastdoorblastdoor Posts: 2,438member
    Quote:
    Originally Posted by shadash View Post


    This is an interesting rebuttal to the New York times piece, specifically this:



    "Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple?s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple?s other products. But almost none of them work in the United States."

    http://www.nytimes.com/2012/01/22/bu...dle-class.html



    Although it is doubtful the "App Economy" jobs are the high-wage, stable union jobs of the 1950s, they're still jobs.



    It's not really a rebuttal at all. To make an apples to apples comparison, you'd have to include all the people employed in the "GM economy" back in the day, including suppliers, auto mechanics, etc.
  • Reply 19 of 42
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by Gatorguy View Post


    The article isn't claiming 430K jobs from the Apple App Store alone. The Android Market, Blackberry Appstore, Amazon's apps, Microsoft's, etc are all included in the estimate of jobs created.



    The majority of the money in the 'app markets' is going to Apple developers, but let's be generous and say that only 1/2 of the jobs are related to Apple.



    Apple has distributed $4 B over 4 years or so, but I'm sure that it started slow and moved up. So let's say that the developers got 1/2 of the total money last year - $2 B.



    So we have $2 B for 215,000 jobs - or less than $10,000 per job. And that doesn't even allow for the fact that there are expenses for those employees - developer fees, taxes, electricity, computers, etc. So if the figures are accurate, those are not good jobs - roughly half of a minimum wage.



    Frankly, I don't believe the estimate of 430,000 jobs. They must be including hobbyists who do it for fun and not as a job.
  • Reply 20 of 42
    blastdoorblastdoor Posts: 2,438member
    The real story here has nothing to do with "jobs" in the macroeconomic or political sense. Instead, the interesting thing here is that there are a lot more people out there writing software for apple platforms using apple development tools. That's a radical transformation relative to just 5 years ago. It is a great benefit to Apple to have such a large developer community. For one thing, it creates a larger labor pool for Apple itself to hire from.
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