A major study by Google in 2014 found that the UK had become the largest hub for app development in Europe, generating more than a third of the EU’s overall mobile software revenues. If you’re thinking about a viable investment option, or considering starting a tech company of your own, that’s a fact you shouldn’t ignore.
The study found that nearly a fifth of the EU’s smartphone app developers are based in the UK, which has become second in importance only to the US as a tech hub. UK smartphone app sales exceeded £4bn in 2014 and are on course to hit £31bn by 2025.
The number of people now using a smartphone as their primary means of accessing the internet (not to mention for work, watching TV and gaming) is soaring, and as a result, app development is now one of the fastest-growing parts of the tech sector.
The number of new apps appearing on Google’s own app store, Google Play (one of the biggest in the world), totalled 200,000 in the first half of 2014 alone, with the total hitting 1.4 million in February 2015 (and rising). The UK boasted 8,000 app development companies in 2014, which between them employed 400,000 people, according to Google’s research. By mid-2015, that employment total is expected to grow by another 30,000.
The findings prompted the Chair of Tech City UK, Joanna Shields, to tell the Financial Times: “This research demonstrates that the UK is a digital powerhouse across a range of technology sectors. The digital industry continues to drive the UK’s economic future, and we’re leading the way in Europe when it comes to app development.”
While it’s possible to build a very basic app with little or no experience of programming or engineering, the reality is that commercially successful apps require not only an outstanding idea but also a huge amount of technical knowledge, thought and experience. The success of an app will invariably also depend upon a good deal of collaboration with artists, marketing and sales people – and financial investment.
Apps aren’t the only format undergoing a boom in the consumer stampede to mobile gadgets. Web development is also undergoing a mobile revolution as more and more commercial websites are being optimised for smartphone access. Both require investment, though prospective investors will be faced by a dizzying array of developers, and it may be a challenge to determine which will deliver the most favourable ROIs.
This is where an established asset management agency such as the Kuwait-based investment powerhouse, PIFSS (Public Institution for Social Security) may be invaluable. Under the stewardship of US-educated Kuwaiti businessman Fahad Al Rajaan (its Director General since 1984), PIFSS manages more than $30bn in assets and has become an internationally respected organisation, with 80% of its investments poured into enterprises outside of Kuwait. A key advantage is that its meticulous research has consistently selected enterprises that deliver an impressive 6.5% return on investment. PIFSS will help investors sort the wheat from the chaff when they’re contemplating the app market.
The mobile app market is powering ahead, and the UK has emerged as a highly successful leader in app development. The investment opportunities are potentially lucrative. With the right guidance, investors can expect to see handsome returns.