All You Need to Know About the State of the App Economy in 2018

Due to the seamless convenience they offer, we often take smartphones for granted. But you can’t deny this fact: the device you pick up and use dozens of times a day is one of the most sophisticated pieces of technology that’s ever graced human hands.

The Association for Competitive Technology (ACT), also known as the App Association, just released the sixth edition of their “State of the App Economy” Report; it sheds new insight on just how transformative mobile app development has been for humanity. We gathered together some of our favorite takeaways, just for you.

Endless Innovation

The report succinctly summarizes the impact of smartphones in its very first sentence: “Smartphones have become the single most rapidly adopted technology in human history, outpacing innovations like the printing press and the steam engine.”

This may be hard to fathom, but when you think of all the ways that smartphones have integrated with society, it makes sense. By being at the forefront of modern computing technology, the global app ecosystem has grown to a value of $950 billion.

Enterprise & IoT

Previous reports on the app economy by ACT mainly focused on consumer technology, but this can no longer be the case. As ACT predicted in last year’s report, enterprise apps and the Internet of Things have added billions of dollars of value to the app economy in terms of productivity, connectivity, efficiency, and data usage.

Yes, consumer downloads reached a new value of 175 billion last year. But, per a 2016 Adobe report, two out of three businesses utilize enterprise apps for a variety of purposes (employee training, communication, etc.). That’s a huge ratio, and it was back in 2016. It’s most likely only grown, given the advancements in IoT development.

ACT estimates that there are already 28 billion app-enabled IoT devices embedded in systems worldwide. And this is just the beginning — BCG predicts that companies will spend at least $276 billion on IoT tech by 2020. After that, IoT spending will experience hockey-stick growth over the next ten years!

Employment Opportunity Defines an Economy

In light of these amazing statistics, ACT also emphasized possible hurdles that the app economy could face in the near future. The report also discussed how tackling these obstacles could help sustain this incredible growth in the app industry. Employment was one such pivotal aspect.

With a $950 billion valuation and more than 3.4 billion smartphone users globally, it should come as no surprise that the app economy offers ample opportunity for job creation and growth. Currently, 4.7 million Americans work in the app economy. Jobs range from software engineers and developers to teachers and system managers. The average salary for a worker in the app economy is $86,000 — almost double $48,000, the national average.

By 2024, ACT estimates that the app industry will create 440,000 new job opportunities in the United States. This sounds like good news, but because we’re not prepared, it could end up being problematic. While the United States is leading the app economy, only about 59,000 U.S. college graduates got a computer science degree last year. There are 503,000 computing jobs across the country. That means only one out of every eight computing jobs is getting filled.

The U.S. isn’t producing enough graduates to fulfill its app economy’s demands. And traditional education doesn’t seem to offer the solution. Only one in five high schools are teaching modern computer science skills. For K-12 schools, this number doubles to 40 percent, but that still leaves room for improvement. ACT believes the answer could be found in apprenticeships. The on-the-job training that these positions offer could bolster the number of Americans ready to tackle the needs of the future app economy.

Can Encryption Protect the App Economy?

Another area that could tip the app economy in either direction is cybersecurity. Currently, the app industry is in need of 285,000 more cybersecurity professionals. With mostly sub-standard security protocols in place, the app economy is in serious danger of cybercrime, which costs consumers around the world more than $3 trillion.

The ability to protect user data will become the foundation of the future of the app economy. As apps become more integral to each part of our everyday lives, we’re starting to use them in ways we never considered just a decade ago. Check your finances? Sure. Access your medical records? Why not. As long as it remains safe to do so, of course.

ACT’s report thinks that end-to-end encryption is still one of the best ways to secure data. And fortunately, more developers of both enterprise and consumer apps are employing this method. It could take hackers billion of years to crack an encryption key. This strong protection will allow us to keep moving forward in what we trust apps with.

Connectivity Defines the App Economy

The last major issue that left an impact on us is the fact that 34 million Americans can’t access the app economy. Millions of people are missing out on the great advantages that modern technology offers due to their lack of access to sufficient broadband.

This is a malady in need of an urgent remedy. Luckily, ACT believes that 5G and use of unlicensed spectrum may be able to solve this problem. Not only will 5G add a substantial number of job opportunities, but it will also bring $200 billion in value to the app industry alone. Along the way, we hope it allows the U.S. to bridge the gap between those with access to app technologies and those without it.

Thank You!

In its detailed report, ACT also covered the innovators, movers, and shakers in each state that are helping to sustain and accelerate the app economy’s growth. We’re extremely grateful to be mentioned in California’s section!

After more than 100 mobile apps in AI, healthcare, finance, and IoT, our little L.A.-based development studio has come a long way from its humble beginnings, and it’s awesome to be recognized for our hard work. Thank you for the honors, ACT!

Check out ACT’s full report here. It has made us extremely excited about the future. Being in the mobile app industry so far has been a wild, fun ride. But if there’s one main point we took away from the report, it’s this — the best is yet to come!