Our latest study shows 1.66 million App Economy jobs in the United States, up from roughly 750 thousand in 2013. In Part 2, we show the Top 25 App Economy states, led by California, New York, Texas, Illinois and Massachusetts.
The introduction of the iPhone in 2007 created a profound new economic force. There are now almost 2 billion smartphone users globally, an unprecedented rate of adoption for a new technology. [ii]Use of mobile data is rising at 55% per year, a stunning number that shows its revolutionary impact. [iii]
And perhaps most important, Apples unveiling of the App Store in July 2008 ignited a global App Economy boom. This revolutionary notion enabled software developers to write mobile applications and easily sell and distribute them globally. Indeed, its remarkable how iOS and the App Store launched an entirely new industry in less than a decade. Arguably, no other innovation has had this transformative of an effect on the domestic and global economy in terms of scale and speed, achieving an unprecedented level of adoption in such a short time.
As a result, a flood of developers around the world are writing and maintaining the mobile applications that make smartphones profoundly useful. For the most part, these developers are not just hobbyists writing games in their basements. Instead, the App Economy is led by large and small companies that understand mobile apps are the wave of the future, as more and more people are linked to the Internet through their devices. Similarly, governments and nonprofits use mobile apps as an interface for contact with their citizens and members.
Going forward, the rise of the Internet of Things is going to supercharge the App Economy. As more and more objects and physical processes are connected to the Internet, people will increasingly use mobile apps as their interface to their homes, their cars, their schools, and their health providers. These apps will be highly functional and sophisticated, serving an essential role in interacting with our environment.
Measuring the App Economy
This report on U.S. App Economy employment builds on previous estimates of App Economy jobs in the United States, starting with our February 2012 report Where the Jobs Are: The App Economy. Over the past several years, we have documented the enormous number of jobs created by the App Economy in developed countries such as the United States and Australia, and developing countries such as Vietnam and Indonesia (see Part 3, “Methodology and References”). Other researchers have estimated App Economy employment for Europe and elsewhere.
As the App Economy grows in significance globally, it becomes essential to have a consistent set of App Economy job estimates so that policymakers can compare their countrys performance with that of other countries.
For that reason, we have developed a new, standardized methodology for estimating App Economy employment. This methodology can be applied to a wide variety of countries, languages, and economic environments. The methodology uses online job postings for workers with app-related skills as a real-time measure of App Economy employment. We benchmark this data against official government statistics in order to eliminate many of the well-known problems connected with using big data to measure economic variables. [iv]
Our goal is to produce a set of globally-consistent and credible estimates for App Economy employment by individual countries, and by broad geographical regions such as states (We list the top 25 App Economy states in Part 2).
The ultimate objective is to be able to track the growth of the App Economy globally, and to see which countries are benefitting the most. Ideally we should be able to link App Economy growth to policy measures undertaken by governments.
Our analysis shows that App Economy employment for the United States is 1.66 million as of December 2015 (see Table 1). Companies employing workers with App Economy skills include large and small app developers; software and media companies; financial and retail companies; industrial companies; health and education enterprises; leading tech companies such as Google, Apple, and Facebook; nonprofits and government suppliers; and large accounting and consulting firms.
The United States App Economy
Thousands of jobs, December 2015
Estimated US App Employment 1660
Data: Progressive Policy Institute, Indeed, public job postings
For this study, a worker is in the App Economy if he or she is in:
An IT-related job that uses App Economy skillsthe ability to develop, maintain, or support mobile applications. We will call this a core app economy job. Core app economy jobs include app developers; software engineers whose work requires knowledge of mobile applications; security engineers who help keep mobile apps safe from being hacked; and help desk workers who support use of mobile apps.
A non-IT job (such as human resources, marketing, or sales) that supports core app economy jobs in the same enterprise. We will call this an indirect app economy job.
A job in the local economy that is supported by the income flowing to core and indirect app economy workers. These spillover jobs include local retail and restaurant jobs, construction jobs, and all the other necessary services.
To estimate the number of core app economy jobs, we use a multi-step procedure based on data from the universe of online job postings (the full methodology is described in Part 3). Our first observation is that online job postings typically describe the skills and knowledge being sought by the employer. For example, if a job posting requires that the job candidate have experience developing apps for iOSthe iPhone/iPad operating systemthen we can reasonably conclude that the posting refers to a core app economy job.
In practice, we compiled a short list of key words and phrases that would generally be associated with App Economy-related skills. These include iOS, Android, Blackberry, Windows Phone, Windows Mobile and app. We applied these search terms to the real-time database of job postings developed by Indeed, which gave us an unadjusted count of job postings for core app economy jobs.
However, thats only the start. Job postings for an occupation are only a fraction of the number of people employed in that occupation, since most positions are not empty.[v] We develop an estimate for the ratio between the number of job postings for tech jobs and overall tech employment. [vi] This ratio is applied to the number of app economy job postings to generate a provisional estimate of core app economy employment. Crucially, we use a validation procedure to ensure that we are actually counting job postings that correspond to core app economy jobs. We use a conservative estimate of the indirect and spillover effects, as discussed in Part 3 [vii]
App Economy growth
How does this estimate of App Economy employment compare with previous figures? Our first estimate of App Economy employment in the United States was issued in February 2012, based on fall 2011 data.[viii] This figure of 466 thousand was widely reported in the media at the time. [ix]
We then published additional estimates in October 2012 and July 2013, which coincided with the 5th anniversary of the launch of the Apple App Store. [x] (See Table 2).
Table 2: Estimates of App Economy Jobs Over TimeDate of estimate Date of publication App Economy jobs, thousands Fall 2011 Feb. 2012 466 April 2012 October 2012 519 June 2013 July 2013 752 Dec. 2015 January 2016 1660 Data: South Mountain Economics, Progressive Policy Institute, The Conference Board, Indeed, BLS
These estimates all used basically the same methodology, with slight variations in the exact list of keywords used to identify the app economy job postings. In addition, the current estimate uses a different database of job postings, which makes it potentially non-comparable.
However, it turns out that the current estimate is right in line with previous estimates (Figure 1). The 45% increase over the 14 months from April 2012 to June 2013 translates into a 37% annual average growth rate. Similar, the 120% increase in App Employment from June 2013 to December 2015 also translates into a 37% annual average growth rate. [xi]
This growth rate in App Economy jobs, while high, is roughly in the same ballpark as other measures of app growth. For example, from the fourth quarter of 2012 to the fourth quarter of 2014, Nielson reports that time spent on apps increased at an average annual rate of 28%.[xii]
Is 1.66 million a reasonable figure for US App Economy employment? This figure is based on our estimate of roughly 550,000 core app economy workers. Thats out of roughly 5 million people employed in computer and mathematical occupations or as computer and information systems managers.[xiii] In effect, core app economy workers make up roughly 11% of the tech workforce.
Informal discussions with tech executives suggest that its reasonable to attribute roughly 11 percent of the tech workforce to the App Economy in the United States. Large portions of software development involve backend systems, such as financial and operation databases, which are not mobile specific. On the other hand, software development focused on online consumer or individual interactions must necessarily involve apps, because Americans increasingly access the Internet via their smartphone or other mobile devices. Going forward, mobile is likely to become more important rather than less, further pushing up the number of App Economy jobs.
We can do another comparison. In 2007, before the introduction of the iPhone, there were roughly 3.9 million people employed in computer and mathematical occupations or as computer and information systems managers. Since then tech employment has risen by 1.1 million, suggesting roughly half the net gain in tech occupational employment since 2007 has come from the App Economy.
This particular figure has to be handled with care, however. Those 550 thousand core app economy jobs can either represent totally new positions, or existing positions that might have been outsourced or simply eliminated in the Great Recession if not for the new possibilities generated by apps. Still, the App Economy is clearly a major reason why tech jobs experienced a major expansion during the worst economic recession in 75 years.
Many App Economy job postings list a mobile operating system or multiple mobile operating systems that the job candidate is expected to be familiar with. This allows us to assess the distribution of mobile operating systems in the US App Economy.
Table 3: US App Economy Jobs by Major Operating SystemEcosystem App Economy jobs (thousands) Share of total App Economy jobs* iOS ecosystem 1439 87% Android ecosystem 1164 70% Blackberry ecosystem 107 6% Windows Phone/Mobile ecosystem 45 3%
*Percentages add to more than 100 because the same position can participate in multiple ecosystems.
Data: Progressive Policy Institute, Indeed.
As of December 2015, we estimate that 87% of App Economy workers in the U.S. (1.4 million jobs) belong to the iOS ecosystem. This figure includes iOS specific jobs as well as jobs supporting multiple platforms. This compares with the Android ecosystem at 70% of App Economy workers in the U.S (1.2 million after slightly rounding up). The Blackberry ecosystem accounts for 6%, while the Windows Phone or Windows Mobile ecosystem accounts for 3%. The numbers sum to more than 100% because quite a fewjobs specify more than one operating systemsay, both iOS and/or Android skills.
From a policy perspective, the iOS ecosystem is likely to have a larger impact on entrepreneurship and the economy in the U.S. Thats because iPhone owners typically have higher incomes, and iOS apps tend to generate higher revenues for developers.
The App Economy has been a significant force in the job growth of the US economy since Apples 2007 introduction of the iPhone and 2008 unveiling of the App Store. The 37 percent annual growth rate of App Economy jobs in recent years is outpacing the rest of the economy.
Moreover, as Part 2 shows, growth in App Economy jobs is broadly distributed across a wide range of states, rather than being concentrated in California. This makes it ever more important that states adopt policies that can foster App Economy job growth.
[i] With research assistance from Michelle Di Ionno. Indeed bears no responsibility for the analysis in this report.
[iv] Steve Lohr, Google Flu Trends: The Limits of Big Data, New York Times (March 28, 2014).
[v] For example, the Indeed database as of late December 2015 contained roughly 390,000 job postings for the search registered nurse or RN. Thats compared to an estimated employment of 3 million registered nurses, for a ratio of 1 job posting for roughly every 8 jobs.
[vi] The ratio in the US is roughly 1 tech job posting for every 9 tech jobs. Our work shows that this ratio varies by country, as one would expect. In addition, this ratio would vary by broad occupation, depending on the hiring practices in that occupation.
[vii] We assume that each core app economy job is associated with two additional jobs (combined indirect and spillover). This assumption is low compared to the typical job multiplier found in the literature, which can go as high as 5 or even higher. See, for example, Job Multipliers: Silicon Valley vs. The Motor City, http://www.economicmodeling.com/2012/08/31/job-multipliers-silicon-valley-vs-the-motor-city/
[viii] Where the Jobs Are: The App Economy, (February 2012).
[ix] For example, The App Economy Estimated to Contribute Nearly Half a Million Jobs to the U.S,Time (2/8/12) and Angry Birds Boom Spurs U.S. Job Revival on Mobile Demand,Bloomberg, (3/5/12).
The Geography of the App Economy,(October 2012).
[xi] The trend line on the graph, which is fitted to the initial estimate as well, represents a growth rate of just under 37% annually.
[xii] So Many Apps, So Much More Time For Entertainment, Nielson (June 11, 2015).
[xiii] This estimate is based on our analysis of Current Population Survey data from December 2014 through November 2015.