The Digital World in 2030 Interview Series: the App Economy

18 April 2014 Author: Ajit Jaokar

Co-author of the EIF report ‘The Digital World in 2030: What Place for Europe?’ Ajit Jaokar is conductig series of interviews with key thought leaders from the industry, academic and political circles. 

Peggy Anne Salz is a lead Analyst at MobileGroove. She is also an author of "Apponomics: The Insider's Guide to a Billion Dollar App Business" and lead author of "The Everything Guide to Mobile Apps: A practical guide to affordable mobile app development for your business". Peggy has written and published more than 400 articles with a strong focus on business strategy, mobile technology and open innovation, appearing in magazines and online destinations, and in the Agile Minds column in EContent magazine.

Please briefly describe your experience in this space.

I am a nine-time author, analyst and authority with 20+ years experience in the mobile space producing commentary, analysis and thought leadership around the impact of mobile on all aspects of work and society with a strong focus on mobile social media, mobile apps, mobile marketing and customer engagement, mobile search and personalization and mobile performance management.

How do you see this domain/market developing?

The app economy is the new economy. Reams of research document its phenomenal growth but we have yet to come to terms with its impact on society, business and the structure of Europe, which sadly presents many barriers to the advance of this key economy. The app economy as a global economy and is thriving in many regions of the world, thus democratizing the access to content and services and allowing companies across all sectors to anchor their key processes/value propositions to the mobile platform. However, I fear that Europe will lag behind in this new economy because of its risk averse culture and the many barriers to cross-border, virtual commerce and business that mobile apps effectively enable.

What is the disruptive potential and the disruptive players?

The app economy, like the Industrial Revolution,  will no doubt transform business and commerce. Thus, the disruptive potential of the app economy is inescapable an invigorating at the same time. There is the potential for nimble newcomers to emerge and ignite new growth and dynamism. However, like all innovations in mobile, the advance of the mobile app economy will also come at a cost to the established order of things. Middlemen everywhere, in all verticals, will be displaced -- unless they can develop new value propositions that justify their existence. In the app economy I am concerned that the motor of the app economy (such as the distribution of apps) is throttled by the key players. Two camps (Apple & Android) do not share the interests of the ecosytems they lead. They do not assist in marketing - and they do not support a feedback loop that would allow app developers to build customer relationships. What's more, they lack simple and key capabilities such as appropriate search and recommendation engines that could boost discovery (thus distribution) of apps -- allowing app developers to operate a sustainable business.Since it's a game where giants play, disruption can only come at the fringe -- perhaps in innovations that streamline payment, vastly improve search, or result in the creation of mega app-emporiums.

What are the barriers for market uptake?

I've outlined the structural barriers above (which focus on the dominance of key players who are not for filling their obligations to create and cultivate robust ecosystems). The barriers to the app economy -- globally  -- center around a lack of marketing knowledge. This skills gap exists because the talents required to make an app quite different from the talents required to market the app and create a sustainable app business. Significantly, the key barriers in Europe center around a talent shortage and the inability of the talent we do have in Europe to connect with the right people for the right opportunities. A huge step in the right direction would be the creation of a comprehensive website - one that would go beyond crowd-sourcing - to effectively play matchmaker between entrepreneurs and enterprises that need apps, for example. VCs could be a part of this in order to guarantee that app companies and app developers who meet the needs of specific verticals could 'pitch' to VCs in this 'marketplace.'

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