Job creation in an ‘app economy’

With little fanfare, the U.S. Internet technology industry has sparked a new innovation revolution that is producing one of the strongest jobs generators of the 21st century economy — the development of applications, or “apps,” to solve all sorts of problems, big and small, or simply entertain. Innovators in practically every state and congressional district are utilizing well-known companies’ platforms to build potentially lucrative businesses with little more than old-fashioned ingenuity and an Internet connection.

Entrepreneurs have leveraged the power of platforms offered by companies like Facebook, Google and Apple to kick-start a phenomenon we call the “app economy.” In 2009, this revolution took significant strides in funding, acquisitions and job creation for an economic sector of educational and entertaining software that until several years ago did not exist.

Small companies have already created more than 500,000 active apps reached through Facebook alone that attract at least 70 percent of Facebook’s 350 million members each month. Apple’s App Store boasts 100,000 apps and recently celebrated its three-billionth download. These small-scale yet widely used widgets are enriching individuals’ digital lives — and at the same time have cultivated a booming new business model.

These are real companies with everything from accountants to janitors. Consider California-based app developer Playdom, which has grown to a staff of 210 full-time employees, most of whom joined last year. Or Where I’ve Been, a Chicago startup that helps users plan locally, travel globally and share their experiences.

There’s Seattle’s PopCap, creator of the wildly successful Bejeweled Blitz game; and Provo, Utah-based FamilyLink, whose We’re Related app is among our top five with more than 50 million users. Right here in Washington, Living Social lets users share insights about their favorite pastimes and Causes helps individuals organize into communities of action focused upon specific issues or nonprofit organizations.

So far, these innovations — and countless more that have yet to be imagined — have been able to thrive because Facebook and other trailblazing tech firms have been able to provide a platform that allows them to directly provide consumers with easy access to new technologies and services.

The Australian Government 2.0 Taskforce was early to identify this type of growth and in a recent report argued that social and collaborative technologies like Facebook offer an unprecedented opportunity to achieve a more open, accountable, responsive and efficient government. Similarly, the U.S. government must become active in the app development arena and in doing so will provide better services to its citizens.

The challenge for government is fairly easy to meet. Congress and the Obama administration don’t have to reinvent the wheel; they just have to embrace it. Facebook is already an integral part of millions of Americans’ lives with a platform that provides unparalleled distribution potential for highly relevant apps.

The administration should tap into the energy of app developers around the country and allocate a sum to generate problem-solving apps. Congress should set conditions on authorizations and appropriations to demonstrate how new technologies can solve old but seemingly intractable issues. Agencies should design procurement processes to embrace Web 2.0 deliverables like requests for proposals for app development.

At the same time, it is important that policymakers work to eliminate any market impediments to the growth of this marketplace while supporting the growth of the U.S.-dominated app economy. Washington can take a cue from the Facebook platform where we’ve learned that lower hurdles and streamlined operations allow innovation to flourish.

Agencies charged with protecting the public from fraud and abuse, for example, should be given enhanced resources to enable them to take strong action against anyone seeking to use these new technologies to victimize consumers. This is where regulators and technology platform companies have a great opportunity for partnership because they share a common interest in a safe online marketplace. 

Facebook routinely takes actions against developers whose products do not conform to users’ expectations but the sheer number of users and apps on platforms like ours requires that federal regulators also play an active role in protecting consumers from abuses by third parties. Only then can the app economy continue to provide extraordinary new consumer benefits and help lift the American economy.

White House Deputy Chief Technology Officer Andrew McLaughlin told a crowd of D.C.-area developers last month that there has been considerable app creation using government information, but a dearth of innovation to blend it with social technologies. That, he said, is “a uniquely powerful thing to do” on Facebook and other platforms. This statement demonstrates that we are only beginning to see what the app economy can produce for America. We all should seek to capitalize on its promise.

Sparapani is Facebook’s director of public policy.