Winners and losers in the global app economy

http://cariboudigital.net/wp-content/uploads/2016/02/Caribou-Digital-Winners-and-Losers-in-the-Global-App-Economy-2016.pdf

  • On the open Web, there are virtually no gatekeepers preventing a new product or service from launching and competing for users. The result? Billions of dollars in economic opportunity and whole new galaxies of products and services.
  • The open publishing model of the Web is being challenged by a new publishing model: the app.
  • Working together, the internet technology community and the development community can ensure that local developers can take part in the economic transformation promised by the Internet.
  • We can ensure these benefits are equitably distributed, create sustainable and lasting economic growth and are positively manifested in connected and newly-connected societies alike.
  • Apps attract significant attention in part because they represent the first truly global market for digital goods, which can in principle be produced anywhere, distributed at almost no cost, and consumed wherever there is a network connection. The low barriers to entry and scalability of digital products thus offer the alluring promise of more accessible economic opportunities, especially to those producers typically marginalized either by socioeconomic status, geographic location, or both.
  • Key findings:
    • Most developers are located in high-income countries
    • 95% of the estimated industry value is being captured by just the top 10 producing countries
    • Language and spatial proximity influence app trade flows – Chinese apps are more popular in South Asia than in Latin America, Spanish apps are more popular in Latin America than in Western Europe
    • The highest performing lower-income countries, including Vietnam, Turkey, and Belarus, have a history of contract IT outsourcing that has over time built up a population of experienced software developers and this type of traditional economic capacity building is more effective than the app contests and superficial coding programs that often grab headlines.
    • App developers in low income countries will not deliberately target their domestic markets until they see enough potential revenue to make it worthwhile, creating a chicken-and-egg stalemate between supply and demand.
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