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'App Economy' credited with creating 466,000 jobs

February 07, 2012|By Deborah Netburn
  • The App Economy at work: Jeremy Fourteau, left, Amer Ajami, Greg Black and Hans Yang working on Empires & Allies, a social game from Zynga released in May.
The App Economy at work: Jeremy Fourteau, left, Amer Ajami, Greg Black and… (Al Seib / Los Angeles Times )

Need a new career? Consider working in apps.

A new report commissioned by TechNet, a bipartisan and political network of technology CEOs, found that in the last five years, 466,000 jobs were created in the "App Economy" in the U.S.

And even better? All indications are that the App Economy will only continue to grow.

"Every major consumer-facing company, and many business-facing companies, has discovered that they need an app to be the public face of the business," writes Michael Mandel, the former chief economist of Business Week who authored the report. "In some sense, that makes the App Economy the construction sector of the 21st century, building a new front door to everyone’s house and in some cases constructing a whole new house."

The report describes the App Economy as a collection of interlocking ecosystems that consists of a core company, which creates and maintains a platform and an app marketplace (Amazon, Google, Blackberry, Windows), plus small and large companies that produce apps and/or mobile devices for that platform. The report notes that companies can belong to many ecosystems and often does.  

In order to determine how many jobs were created from Apps, Mandel drew on information from the Conference Board Help-Wanted Online (HWOL) database — which is a comprehensive and up-to-the-minute compilation of want ads. By searching the HWOL database for certain keywords, and then applying historic ratios to the number of want ads in the tech occupation and the actual level of tech employment, and also looking at estimates of spillover effects to the broader economy, he came up with the 466,000 number.

What's pretty crazy to think about is that this economy didn't exist until 2007 when the iPhone first made its debut.

Programmers should be very psyched, but even people without hard tech skills should find this news heartening, because as App companies grow they also need human resource experts, sales people, marketing people and other people to fill non-tech functions.

"A careful examination of want ads placed by midsize app developers suggest that a 1 to 1 ratio between tech jobs and non-tech jobs is not unreasonable," Mandel writes.

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