New 'App Economy' Creates Nearly 500,000 Jobs: Study

A new TechNet study identifies a new "App Economy" based on the creation of mobile, enterprise, consumer and cloud apps that is responsible for roughly 466,000 jobs.

TechNet, a bipartisan policy and political network of technology CEOs, released a new study showing that there are now about 466,000 jobs in the so-called €œApp Economy€ in the United States, up from zero in 2007.

The €œApp Economy€ is the market for applications and technology products and services related to the delivery of applications in the mobile, enterprise, Web and cloud spaces. The TechNet study identifies the New York/Northern New Jersey/Long Island metro area as having the highest number of App Economy jobs at 9.2 percent, while California is by far the state with the highest amount of App Economy jobs at 23.8 percent. The next-closest state is New York, with 6.9 percent of the App Economy jobs.

The total number of App Economy jobs includes jobs at "pure" app firms such as Zynga as well as app-related jobs at large companies such as Electronic Arts, Amazon and AT&T, as well as app "infrastructure" jobs at core firms such as Google, Apple and Facebook, TechNet said. In addition, the App Economy total includes employment spillovers to the rest of the economy, the organization said.

The study, sponsored by TechNet and conducted by Michael Mandel, president of South Mountain Economics, also found that App Economy jobs are spread throughout the nation. Although the New York metro area took top honors as the biggest market for App Economy jobs, San Francisco and San Jose together substantially exceed New York, with 8.5 percent and 6.3 percent of the App Economy jobs, respectively. And while California tops the list of App Economy states, with nearly one in four jobs, states such as Georgia, Florida and Illinois get their share as well. In fact, more than two-thirds of App Economy employment is outside California and New York. The results also suggest that the App Economy is growing quickly and that the location and number of app-related jobs are likely to shift greatly in the years ahead.

€œAmerica€™s App Economy€”which had zero jobs just five years ago before the iPhone was introduced€”demonstrates that we can quickly create economic value and jobs through cutting-edge innovation,€ said Rey Ramsey, president and CEO of TechNet, in a statement. €œToday, the App Economy is creating jobs in every part of America, employing hundreds of thousands of U.S. workers today and even more in the years to come.€

€œThe App Economy, along with the broad communications sector, has been a leading source of hiring strength in an otherwise sluggish labor market,€ Mandel said in a statement.

"Application development is the engine that drives a great deal of high-tech innovation and, as the TechNet report demonstrates, significant economic growth,€ said Jake Ward, head of communications for the Application Developers Alliance, a new trade organization for application developers. €œThe strength of the apps economy cannot be overstated, and its importance should not be underestimated. App developers are small independent businesses and global corporations and the nature of application development as a dynamic industry bodes well for the future of the American technology industry. We are proud to serve and represent the talented men and women that comprise this essential workforce."

The Application Developers Alliance, which launched in January at the Consumer Electronics Show in Las Vegas, is an association that supports the needs of developers by: promoting innovation and growth through collaboration, networking and education; delivering resources and support that enable developers to focus on their work; celebrating developers€™ contributions€”in the media, within related industries and wherever decisions are made that affect the development industry; and advocating for public policies in developers€™ best interests, including openness, intellectual property rights, appropriate privacy protection, choice and innovation, according to the alliance€™s mission statement on its Website.

Meanwhile, the TechNet research shows that when it comes to employment impacts, each app represents jobs€”for programmers, user interface designers, marketers, managers and support staff. Conventional employment numbers from the Bureau of Labor Statistics are not able to track such a phenomenon because this economic ecosystem is so new, TechNet said. The research analyzed detailed information from The Conference Board Help-Wanted OnLine (HWOL) database, an up-to-the-minute compilation of want ads, to estimate the number of jobs in the App Economy.

Following New York, San Francisco and San Jose, rounding out the top 10 metro areas with the highest percentage of App Economy jobs was Seattle with 5.7 percent, Los Angeles with 5.1 percent, Washington, D.C., with 4.8 percent, Chicago and Boston both with 3.5 percent, Atlanta with 3.3 percent and Dallas with 2.6 percent.

After California and New York, the states with the highest percentage of App Economy jobs were Washington with 6.4 percent, Texas with 5.4 percent, New Jersey with 4.2 percent, Illinois with 4.0 percent, Massachusetts with 3.9 percent, Georgia with 3.7 percent, Virginia with 3.5 percent and Florida with 3.1 percent.

Clip here for the full TechNet study, entitled €œWhere the Jobs Are.€

Although this study clearly indicates that software development has generated a major economic boost and bears out IBM Research€™s chief scientist for software Grady Booch€™s claim that software runs the world, there is still a need for more trained IT workers to fill the jobs created by the new App Economy.

Microsoft, IBM, Google and other major technology companies are clamoring for workers, combing the halls of the nation€™s top computer science and engineering schools and asking for relaxed immigration policies so they can hire more foreign workers.

IBM, Lenovo and other companies have begun to tap youngsters in high school to groom them for IT jobs. IBM€™s joint effort with the city of New York to create a high school€”Pathways in Technology Early College High School (P-TECH)€”which goes from grades 9 through 14 and graduates students with associate's degrees in IT fields, is a model Big Blue hopes to replicate in Chicago and other cities. It also is an example of IBM€™s principle of supporting public/private partnerships that Big Blue hopes other companies will emulate.