‘App Economy’ Is ‘Construction Sector of 21st Century’

Can you believe the iPhone is not quite five years old? Yet a new report estimates that 466,000 jobs have been created in the United States related to mobile applications since 2007.

The report, compiled by Michael Mandel, former chief economist for Businessweek, for trade group TechNet, says the jobs include programmers, designers, marketers, managers and support staff in what it calls an “app economy.”

According to the report:

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. 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.

He describes interlocking ecosystems including core companies that create and maintain a platform and marketplace (Amazon, Google, BlackBerry, Windows), plus small and large companies that produce apps and/or mobile devices for that platform.

Similarly, in response to a Wall Street Journal article last summer about the telecommunications sector shedding wireless jobs, Fred Campbell of the Wireless Communications Association International described a similar ecosystem in wireless as a sound job engine. Recently, a report from Washington think tank NDN estimates the move from 3G to 4G has created more than 231,000 jobs in the United States.

And a report last month by The London School of Economics and Political Science projects that the smartphone services sector will employ more IT professionals than aerospace by 2014.

Mandel drew information from the Conference Board Help-Wanted Online database and other economic data. He stresses in the executive summary that his numbers are estimates that “may represent ‘jobs not lost’ rather than net jobs gained.”

The New York City area took the prize as the hottest market for “app economy” jobs, with California the hottest state. Yet he found nearly two-thirds of the jobs counted were outside California and New York.

And the “app economy” is expected to grow, not only employing programmers, but also people in human resources, sales, marketing and other non-tech functions. Wrote Mandel:

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.

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