The European Commission expects the EU's app sector to employ 4.8 million people by 2018 and contribute €63 billion to the economy, and hopefully have a positive impact on the pressing youth unemployment problem as many developers are from younger generations.
The app economy currently employs one million developers and 800,000 people in marketing and supporting posts.
In 2013, EU buyers and advertisers also spent €6.1 billion on apps, according to a new report by Gigaom Research. As consumer spending and advertising is expected to grow, the report predicts a booming sector which could grow to €63 billion in annual revenue in five years.
"In the face of increasing youth unemployment, these figures give me new hope," said Neelie Kroes, the commissioner in charge of the digital agenda.
"The app sector is one area of the digital economy where Europe can really lead. But we have to address concerns about connectivity and fragmentation – yet another reason to complete the telecom single market," the commissioner added.
John Higgins, director general of Digital Europe, an industry association, said the new report confirms that Europe had incredible potential in terms of creativity and innovative thinking, and was ideally positioned to take advantage of the advances in technology that are coming on stream.
Higgins agreed that it's likely that the app economy is already having an impact on youth unemployment.
"But Europe needs to do more in terms of equipping young people for the modern workplace. That’s why we are working with the Commission’s Grand Coalition for Digital Jobs, to help get people – especially young people – trained with the IT skills they need, and to help them fill the growing number of IT-related job vacancies across the EU," Higgins told EURACTIV.
According to the report, app developers in the EU also face challenges which are more related to business rather than technical bottlenecks. While it might be difficult to increase users' willingness to pay for apps is problematic, according to the report, better discovery vehicles could help relieve high customer-acquisition costs.
The fact that many young start-ups at the moment are being acquired by bigger players before they really start growing, Digital Europe's director general said was a "good thing".
"Large players bring expertise, investment and a proven track record in getting products to market – precisely what a young start-up needs. What we would like to see is a more entrepreneur-friendly environment in Europe, so our young start-ups don’t have to go all the way to Silicon valley to find the support they need to develop their companies," Higgins stated.
He added that though there are technology hubs in for example London and Berlin, Europe has a long way to go before it can claim to have a truly entrepreneurial culture.
According to estimates, 94.4 billion apps were downloaded globally during 2013. The authors of the report said the app economy to date has been powered mainly by consumer usage of mobile devices and social networks.
The report, 'Sizing the EU App Economy' was recently presented by the commissioner for the digital agenda, Neelie Kroes, at a workshop in Brussels disgussing the digital community and the future of the EU app economy.
Apps are self-contained programs or pieces of software which are mostly often designed for mobile devices or social platforms.
For example, apps can advice on the most efficient public transport route, help with online banking, give health advice or be games for entertainment or relaxation.
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