Orange & Gold Blog

UK app economy worth £4 billion in revenue

Companies in the UK developing and selling apps for smartphones and tablets are forecast to generate some £4 billion of revenues this year, more than in any other European economy and cementing the UK's position in app development and as a Tech-Hub, as the biggest outside the US. Over a third of all app-related revenues generated by EU member states comes from the UK.

There are 8,000 UK companies directly involved in app development, employing some 380,000 people, according to research commissioned by Google and the research predicts that the UK app economy will be worth nearly £31 billion by 2025.

The success has been attributed to the extent of the penetration of smartphone and app usage in the UK - consumers in Britain lead the way in smartphone ownership and spending on mobile shopping and entertainment, downloading more than 250 million apps a month. In addition, the UK app sector is more active in exports, generating more income from high-growth overseas markets than other European developers, assisted in part by use of the English language. However, industry experts have also credited Britain's well-structured and maturing technology startup environment, which they say is, relatively speaking, well-supported by government and larger companies.

Research estimates that the global app economy was worth over £40bn in 2013 and is growing at about 27% per annum (counting sales of apps themselves and related advertising, not the goods bought via apps). The biggest categories for app usage are financial services, news, entertainment, retail, automotive and health. 

Up to 30,000 jobs are expected to be created in the UK app sector in the next year and annual income for developers and designers averages £47,000, well above the national average, with many in the industry being self-taught - 83% say they have had no formal training.Researchers, unsurprisingly, found many startup businesses in the app economy, with 50% of companies in the industry employing less than five people. More than 40% of developers said they generate most of their income from apps, but 22% generate no income at all, indicating a significant proportion of early-stage startups.

The biggest risk to the continuing growth and success of the UK digital economy surely remains insufficient education and training and the well-documented skills shortage at the cutting edge of IT.