app-economyWe hear all the time that people are being “left behind” by technological progress. The success of Donald Trump, Brexit, Marine Le Pen and Geert Wilders has been attributed to voters worried that they have more to lose from progress than they have to gain. Jobs are being automated, and low-skilled positions in the labour market are increasingly perilous.

Nobody disputes the new opportunities offered by the technologies such as driverless cars, drones, the app economy, machine learning, and virtual reality. But how can we ensure that growth is inclusive and benefits everybody economically instead of just highly-skilled and highly-educated workers?

In 2016 we published a debate looking at the growth of the ‘app economy’ in Europe. Apps could unlock a peer-to-peer economy of entrepreneurs across Europe, with people offering services directly to others. They can also be used by governments and corporations to facilitate other parts of the economy, doing everything from helping tourists navigate a city to letting people manage their personal finances from their phone or tablet.

Will the “app economy” benefit everybody? We had a comment sent in from Sebastian, who was concerned about Europeans being “left behind technologically”. Not everybody can be a coder or a software engineer, so how can we avoid people being ‘left behind’ in the digital era?

To get a response, we spoke to Dr. Michael Mandel, Chief Economic Strategist at the Progressive Policy Institute, a Washington-based think-tank that promotes innovation and growth in a knowledge-based economy. What would he say to Sebastian, particularly when it comes to the rise of the app economy?

mandelI give two answers to that. One is that the app economy creates jobs for more than the app developers. It creates jobs for workers in the companies that are supporting app developers. So, there are a lot of middle class jobs being created by the app economy in terms of, say, office workers in companies that are developing apps or supporting apps.

Then there’s a broader question, which is that we do need to be concerned about people being left behind. We have to make a financial and moral commitment to the people who are being left behind as the app economy generates more jobs and more wealth.

When we published our debate on the growth of the app economy, we had a comment from Marcel, arguing that new technology is disruptive and leads to job losses. Are there any losers from the growth of the app economy? Does it create more jobs than it disrupts?

mandelThe app economy creates jobs for app developers, it creates jobs for people who are maintaining and supporting apps, it creates jobs for people that are supporting the app developers, and it creates spillover jobs. Our last estimate was that the app economy accounted for more than 1.6 million jobs in Europe. So, we believe that the app economy is actually a great job creator.

Finally, we had a comment from Paul, who argued that the problem with the app economy is that it’s so uneven in terms of quality. Indeed, some reports suggest that over 99% of paid apps make no money, with most developers unable to recoup their costs for development. So, is it sustainable?

mandelNo, that’s misleading. Most apps being written today are actually not designed to make money on the app stores. There’s a portion of apps – game apps in particular – that are designed to make money on the app stores, but there are many more apps being written by companies, or sponsored by governments, that are not designed to make money on the app store but are actually designed to facilitate other parts of the economy. So, for example, if a government sponsors an app that is about mass transit in a city, it never shows up on any of the app store top listings but it creates jobs for developers. So, the app economy includes much more than apps that appear on the moneymaking list of app stores.

How can we avoid people being ‘left behind’ in the digital era? Does the app economy create more jobs than it disrupts? On 28 March 2017, Debating Europe is co-hosting an event in Brussels with Google on “Digital Transformation in the Mobile Era: New Skills, Jobs and Growth”, and we’ll be taking your questions to participants about the app economy Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!

IMAGE CREDITS: CC / Flickr – ebayink


34 comments Post a commentcomment

What do YOU think?

  1. Anatilde Alves

    Back to the trading system, people are definitely painfully becoming obsolete.

    05/04/2017 Vish Makhijani, President and Chief Operating Officer of Udacity, a for-profit educational organisation that offers massive open online courses (MOOCs), has responded to this comment.

  2. GonEprata Megarp

    Offer a smart phone for everyone! Cmon now, even economic migrants got iphone 7 for free, im sure it could be done :)

    • Kester Ratcliff

      No-one gets a free iPhone 7 or any other phone unless a personal friend gives it to them. You’ve either been watching too much Russia Today or missing your medication.

    • GonEprata Megarp

      Oh…personal friend…or taxpayer…depends on goverment program, you know communication is a simple refugee request since the european gold class figured out it would be so important…if is an an iphone 7 or the first nokia…well thats another issue, thats not even important, what i meant has nothing to do with iphones XD, now dont even bring the russians into this, theres plenty of anti—russian propanganda too, whitch do you prefer? I dont need any kind of propaganda really, but thanks for the comment anyway.

    • Lila Guha

      Some of them much younger than your mother.

  3. Devina

    The only reason people are being left behind, is because they don’t have as much technology as others might have e.g. iPhone or an iPad

  4. Kirstie Mamoyo Rogers

    I am not fussed about being left behind in a digital era…there are days where I feel I’d like to leave the digital era behind but I am unable to do so because I am forced to do everything digitally. You know my son went for a saturday job at a DIY store and he has to submit his application via their facebook page. Had he not had facebook he would have been forced to create an account just to get a job…eish.

  5. Lila Guha

    I know I am a bit left behind as people are always talking about stuff I haven’t got and have no intention of getting.

    05/04/2017 Michael Quigley, Director of the European Office at the Progressive Policy Institute, a think-tank that promotes innovation and growth in a knowledge-based economy, has responded to this comment.

  6. Lila Guha

    I know I am a bit left behind as people are always talking about stuff I haven’t got and have no intention of getting.

  7. Onita Dumitru

    Va mulțumesc Dragi Prieteni Virtual pentru tot ce faceți pentru mine va doresc mult succes in activitatea dumneavoastră de zi cu zi

  8. Dushyant Mehta

    We can encourage the population by posting about the digital era around on the internet, it spreads on twitter why not the general population? We can have a website explaining step-
    by-step – it might frustrate you but it’s worth a shot.

  9. Frans Brinkman

    What contact with nature we are losing, Bria? But however 50% of the population is practical illiterate – nobody really cares. What we are talking about… ,

  10. Matteo Magnus Magni

    we need this For build a more united europe
    1)Common defence policy
    2)Common Foreign policy
    3)Euro for all countries
    4)European constitution
    5)Penal laws common
    6)Common Welfare( with German Model)
    7)Admission of New Countries with these standard
    8)Re admission after 2020 like I think of England of annulying the brexit If it Won’t pay
    9)Common Health Law
    10)Common Environment Law
    11)Agrrements with China,India and LAtin American countries for avoiding USA
    12)Creation of our internet for not more depending from USA 13)Common Wealth cultural policy

    • Sebastiano Schavoir

      You think we depend on the USA? Because of the internet?… we depend on energy sources. The rest is just smoke in your eyes.

    • Stefania Portici

      hai detto, 4 Costituzione europea . 6- benessere comune (con modello tedesco ) . queste due cose messe insieme significa che la Costituzione europea deve essere tedesca .Prima cosa la Costituzione europea ILLEGALE truffaldina ci sta già . Secondo….noi la Costituzione ce l’abbiamo già , è meravigliosa e non intendo rinuciarci per cambiarla con quella tedesca che non mi rappresenta .Ma stiamo scherzando !?

    • Stefania Portici

      ma che c’entra il nazionalismo ? L’Unione Europea non è uno Stato e la moneta euro non è degli Stati, gli Stati la moneta la prendono in prestito al mercato dei capitali . Hai detto ” UE per sempre , io sono un euro.nazionalista ” Hai detto una cosa illogica ( per non dire insensata ) e senza sentimento , Mi sembri un ragazzo giovane, crescerai

    • Matteo Magnus Magni

      per me la mia nazione è la UE bisogna fare l’Europa come si è fatt al’italia

  11. Joerg Sp

    Universal basic income and a European tax on productivity of businesses. Also some kind of mechanism to prevent capital flight.

    • Sebastiano Schavoir

      You usually want to tax things you want less of,and not tax things you want more of.

    • Matthew Wolfbane

      Punishing workers for being productive may eventually turn them against you.
      Sounds gold to me.

    • Joerg Sp

      I did not mean workers. In the long run, with the increasing degree of automation, you might not have so many workers. The rate of jobs eliminated is higher than of those that are being created at the moment.

      Sebastiano Schavoir yeah, that is why there is a tax on consumption, because the government wants people to consume less. Seems legit to me in a consumerist society.

  12. Stefania Portici

    l’articolo di Debating Europe dice “Il 28 marzo 2017, Debating Europe co-organizza un evento a Bruxelles con Google su “trasformazione digitale nell’Era del Mobile: nuove competenze, occupazione e crescita”, e daremo le vostre domande ai partecipanti sull’app economia fateci sapere i vostri pensieri e commenti nel modulo sottostante e li portiamo ai responsabili politici e gli esperti per le loro reazioni! ” ….il 28 marzo è passato …..allora ? Dovete essere voi di questa pagina a dirci come è andata e quello che è stato detto. Allora ?

  13. Yannick Cornet

    Whatever is the next big economic era, anything that decouples growth from environmental footprint is good. What this means? Those left behind should not be penalised but rewarded. Hence the need for UBI. After 150+ years of industrialism, it is no longer a luxury but a natural evolution.

  14. Nuno Teixeira Castro

    The zorrinho-plan is one step ahead. Wi-fi for all, but, who will grant security issue?
    And more, without wi-fi in the equation, how can we all access internet with so many different, varying a lot, prices across all the Member-states?

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