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Friday, 01 August 2014 06:09

Australia's 'app economy' booming Featured


A new report says that Australia’s ‘app economy’ of mobile device developers and their support staff is one of the country’s fastest growing employment sectors.

Australia has become an international hotbed of mobile app developers, says a report (a ‘policy memo’) from the Progressive Policy Institute (PPI), a US based think tank that served as an ‘idea mill’ for President Bill Clinton.

The report’s author, Dr Michael Mandel, says Australia compares favourably with both the US and the UK, having a slightly higher proportion of core app economy jobs as a share of all ICT jobs. “Perhaps more interesting, Sydney and Melbourne are roughly on par with New York City and London. The San Francisco-Silicon Valley region, of course, is far ahead.”

He says Australia has 140,000 people employed in the app economy, with more than half (77,000) of them in New South Wales. “We note that Australia stacks up well against the US and the UK when it comes to App Economy employment per capita.”

The report estimates that in Melbourne 10.9% of all IT jobs are in the app economy, and in Sydney 10.7%. New York is 10.5% and Londonm9.3%. The overall figure for Australia is 9.4%, compared to 8.4% in the US and 7.6% in the UK. The San Francisco-Silicon Valley area is highest in the world, with 17.6%.

The report is available here. It defines three types of app economy jobs:

  • A ‘core’ app economy job is an IT-related job that develops, maintains, or supports mobile applications.
  • An ‘indirect’ app economy job is one that supports app developers in the same enterprise, such as human resources, marketing, or management).
  • A ‘spillover’ app economy job is any job in the local economy that is supported by app developers.

“Australia has a good start on the digital economy, especially when viewed from the perspective of mobile apps,” says Dr Mandel. “As this sector continues to expand globally, this opens up new opportunities for Australia to become an exporter of apps and app-related services, especially given the current international importance of English-language markets.

“There are large number of app developers—these are the people who design and create the apps distributed by small and large companies, nonprofits, and government agencies. Indeed, it’s astonishing how fast many companies have embraced the app economy, hiring the workers needed to develop mobile applications at a rapid rate. We are seeing the creation of new specialties and new ways to interact with customers and employees.

“But building a successful app is not a one-shot deal. Think of an app like a car—once built, it still needs to be repaired (in the case of bugs or security risks), updated, and maintained. And just as the automobile industry supports a large number of workers, from engineers to factory production workers to sales to service stations, so too does the app economy support a significant number of workers.”

Dr Mandel says that any app is exportable, in the sense that it can be downloaded from an app store by anybody around the world, no matter how far the distance. “That means the Australian app economy can become a basis for continued growth. The second point is that apps can improve the efficiency and attractiveness of the Australian economy.

“More broadly, app development offers an accelerated route to the development of the digital economy. The app economy is a logical complement to Australia’s natural resources industries, especially for a country that can harness strong universities and desirable amenities such as quality of life and ease of recreation.”

He says it is important for policymakers to strike the right balance between essential and excessive regulation, especially in areas such as data privacy.

“This debate is at a fever pitch in both the US and Europe, especially after the recent NSA revelations. The preferred outcome for any region depends on that region’s cultural values and history, of course.

“But a general principle is that the tighter the regulations, the more obstacles in the path of the growth of the rapidly innovating app economy. It’s also important to note that the app economy is closely related to the Internet of Everything, which may be the next stage of the information revolution.

“Where the Internet transforms digital industries such as entertainment and financial services, the Internet of Everything does the same for physical industries such as mining, healthcare, and public services, using distributed sensors and wireless connections.

 “Policymakers need to be aware that a country such as Australia, with a large natural resource sector, may derive great productivity gains from the Internet of Everything. Assuming good policy, the app economy is becoming an important part of Australia’s future. That’s a good thing for jobs and growth.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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