Country Level App Growth
The Applications Economy is a Winners Take All Market
Advanced economies dominate the app market. The winner takes all phenomenon, ensures that 95% of the value created in the app economy is captured by just 10 countries.
The drivers of app growth within countries include;
The level of industrialisation, advanced, high-income economies outperform lower income under developed economies
The level of smartphone adoption
High-speed communications infrastructure
A large middle class, with high purchasing power parity (PPP), which in turn incentivises
The growth of a large app developer community to develop innovative applications for app stores.
The ability to expand globally - 69% of developers in lower- income countries were not able to export.
The top 20 countries by numbers of App developers in 2016
Compared to high-income countries where only 29% of developers were unable to export. In the USA, only 3% of developers were impacted. High income countries, are the most lucrative markets, and account for 81% of all developers, worldwide.
To illustrate, the winner takes all phenomenon, that is the app economy. In a study by Caribou Digital, Winners and Losers in the Global App Economy. Nineteen of the countries that were lower-income, economies accounted for only 1% of total worldwide estimated value.
““For lower-income countries, with a significant number of developers. The amount of value captured is disproportionately small vs the number of developers.” ”
On a global scale the Silicon Savannah, is still in its infancy. With modest showing from South Africa. However, the remaining sub-Saharan countries; Kenya, Nigeria, Ghana, and Tanzania were the lowest performers, in the study.
In contrast, lower-income countries in Southeast Asia and Eastern Europe were much more successful, especially Vietnam, Turkey and Belarus.
U.S developers are the dominant players across the globe, with the exception of China, Japan, South Korea and Taiwan. Local producers within these countries excel at competing with and winning against new market entrants, originating from the USA and other developed nations.
““Strong domestic app production equates to lower market share for U.S app producers in foreign markets. “”
According to the Alfred P Sloan Foundation. An explanation for the success of Japan, Taiwan and China, may in some part be related to the personal computer. During the PC era, innovation-related activities such as;
* Component level R&D, concept design and product planning were performed in Japan.
* R&D and the development of new platforms occurred primarily in Taiwan.
* Product development of mature products and sustaining engineering were performed in China.
were conducted within the aforementioned Asian countries.
The embedding of these intrinsic capabilities & skills into the universities, R&D departments of organisations and the working populations within these countries.
Created an unfair advantage, when competing in a global tech driven world. It also provided a gateway to the mobile first, data-driven global economy the world is transitioning to.
Most importantly, the accmulation of this knowledge and the associated skills, provided a defence against new market entrants. As local talent, were imbued with the necessary skills to compete, with global well-resourced international foreign firms.
