The App Economy – policy-making at the gateway between the online and offline worlds
By Luc Delany
The App Economy – policy-making at the gateway between the online and offline worlds
11 Sep 2015 - Apps

Within a few years, apps have become an integral part of our lives and are used to do everything from playing games and catching up with friends to ordering groceries and turning on the central heating. On Tuesday, Delany & Co attended the launch of a report by Plum Consulting  – “All About That App” – which reflects on the growth of apps, the benefits derived from them, and the policy challenges which lie ahead.

From 2009 (when the report begins to measure the ‘App Economy’), annual app store revenue has exploded (data is from Apple and Google app stores). The largest increase was seen between 2012 and 2014 when revenues quadrupled from just under $2 billion to $8 billion. Even though apps are a relatively new phenomenon, they are fast becoming ubiquitous with the number of smartphone users worldwide surpassing 2 billion in 2016. This combined with recent dedicated enterprise apps (commissioned by companies for closed services such as personal banking) and the lowering cost of app development and deployment, means the soaring revenues come as no real surprise.

One of the key points that the report makes is that just a couple of years ago, we were in an initial phase of convergence – the movement of digital content and applications online. However, convergence has now progressed to a phase where online is transforming physical, previously offline, activity. It is here, where the boundaries between the digital and the analogue are blurring, that is of most interest to policy makers and where the majority of the policy development debates are now taking place – see for example discussions around how to regulate the sharing economy.  From a policy perspective then, what was highlighted during the presentation and following Q&A, was the premise that the greatest policy challenges for the information society, and the app economy, may now lie outside the sector. The focus of digital policy needs in fact to shift away from ‘traditional’ digital issues. To  facilitate the benefits European citizens can derive through the use of apps and information and communications technology throughout the economy, a cross cutting portfolio approach is needed instead.

In order for the for the app economy to continue growing and that innovation is driven forward, the report recommends three policy initiatives:

  1. Embrace app driven innovation throughout the economy
  2. Facilitate open access to government data
  3. Enhance mobile connectivity and inclusion

Changes then need to be made to current analogue rules or frameworks to suit new digital rules. This does not necessarily mean brand new legislation or total de-regulation, as data protection and consumer trust remain essential to the app economy’s success. However, policy development and regulation need to be adapted to address and reflect the new digital nature of business, usage and adoption. Policy makers must also guard against protectionism. Current or entrenched business interests and models are not always best for the consumer, as the rise of the sharing economy – again – has demonstrated.

With lots of Government-backed, semi-autonomous initiatives such as Tech City UK or Innovate UK and its catapult centres, the relationship between the government, these “quangos” and the level of its interaction and intervention is also changing. How involved should the government get in ensuring the policies suggested above are enacted or protectionism is guarded against? A clear roadmap of jurisdictions, and levels of government interaction needs to be set out and adhered to. The recently launched Productivity Plan would seem a good a place as any to clarify such a roadmap.

Speakers at the event included Ed Vaizey MP, Minister for Culture and the Digital Economy; Naomi Climer, President-elect, IET; and Itamar Lesuisse, CEO of app-based start-up Peak.

Photo Credit: lifehack

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