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Employment in India's app economy to double by 2016

With the number of jobs in India created by apps possibly reaching 600,000 by 2016, the country looks at moving from e-governance to m-governance

India's mobile ecosystem and app economy are thriving, with the latter on the cusp of exponential growth.

Its app economy is expected to double direct employment in the industry from 75,000 at present to nearly 160,000 by 2016. If downstream jobs such as sales and marketing as well as customer sales management are also considered, numbers could be more than 600,000 by next year.

These were the findings of July's study An inquiry into the impact of India's App Economy undertaken by the Indian Council for Research on International Economic Relations (ICRIER) and supported by Internet and Mobile Association of India (IAMAI).

Though smartphone penetration is said to be less than 20 percent, as many as 100 million downloads take place every month, placing India amongst the top five regions for Google Play, the official Android app store.

Even the number of 3G SIMs in India is also expected to increase from 35 million in 2012 to 272 million by 2017. India also significantly contributes to app development, with roughly 10 percent of apps worldwide developed by Indians either based abroad or at home, the report said.

Four scenarios

The report outlined four scenarios that will determine the number of jobs that would be generated by the app economy: Business As Usual (BAU) with no regulatory intervention; Mature Industry (IM) with high smartphone penetration and data usage; Government Intervention (GI) providing digital infrastructure enabling demand; and Aggressive Government Intervention in a Mature Market (AGI).

See the following chart outlining estimates for the increase in employment between 2014 and 2016 for these four scenarios (the numbers in parentheses reflect the multiplier benefits if direct employment increases by 151,230 (159,010)):

BAUIMGIAGI
Increase in employment using
Type I multiplier
91,476
(100,811)
106,722
(117,613)
121,968
(134,415)
144,837
(159,618)
Increase in employment using
Type II multiplier
221,067
(243,627)
335,412
(369,641)
404,019
(445,249)
548,856
(604,867)

Source: ICRIER & IAMAI

"Thus the aggregate number of jobs that apps could create in India during the period 2014-16 lies between 91,476 and 604,867, the upper limit being close to eight times the current levels of employment," the report added. "If direct employment increases at a faster rate, the multiplier effects will result in massive benefits to overall employment in the economy."

The multiplier values increase progressively across the four scenarios. The minimum estimated increase in direct and indirect employment for the app economy is 91,476, while the maximum is 159,618. If induced employment is also taken into account, these numbers rise to 221,067 and 604,867 respectively.

NASSCOM review

As per the NASSCOM Strategic review 2015, the Indian mobile app industry is helping drive ecommerce adoption in India, through mobile transactions, emergence of mobile rich interfaces, and affordable and convenient mobile payment platforms.

Recognising the role of technology and apps in generating employment, the Indian government has announced a $160 million (1000 crore rupees) Self Employment and Talent Utilisation (SETU) incubation programme for supporting startups in the area of technology.

Indian Minister for Communications and Information Technology, Ravi Shankar Prasad, attributed the growth of mobile commerce in the country to increasing mobile and internet penetration, the rise in smartphone adoption, innovation in mobile technology, and the popularity of mobile-based apps as some of the reasons.

He said that as part of m-governance, the government has notified framework for mobile governance as of January 2012. Based on this, the department created a central platform, Mobile Seva, a one-stop solution for all mobile services, mobile apps and interactive voice response systems (IVRS). "App economy is also impacting ecommerce along with emergence of newer areas enabling mobile ecosystem," the minister added.

According to IAMAI Associate Vice President Nilotpal Chakravarti, India has been gradually transitioning from a mobile-first to a mobile-only country. Cognisant of this fact, ecommerce players are following a mobile-first approach and around 70 percent to 75 percent of their total traffic is from a mobile app.

"Ecommerce players are constantly striving to create and offer the best shopping experience for their users on app. However, barring one or two players, most of them continue to offer desktop as well as mobile options for customers," he told ZDNet.

"Given the proliferation of smartphones and the increasing number of mobile internet users, it does make sense to focus on apps to acquire customers and push sales, yet I believe the customer should be given the option to choose his medium of purchase.

"It must, however, be said that for ecommerce players, going forward, apps will play a major role -- be it to retain customers or to acquire new customers, and hence the usability, design and speed of an app will be critical," Chakravarti added.