The app economy is about to explode

(This post originally appeared on The Washington Post)

It seems like everyone’s using mobile applications–or apps–nowadays. But a new research report says we’re just getting started.

Analytics tool maker App Annie has published its latest report on the “app economy” and according to ReCode, things are about to explode.  In just five years, App Annie estimates that the app economy will be worth about $6.3 trillion, up from $1.3 trillion last year.

So what exactly is this “app economy?” The money will come from different sources: buying and downloading new apps, buying products with those apps and the advertising revenue generated by the apps. Travel apps and gaming will continue to be hot. People in in South Korea, Mexico, Brazil, Japan and India are already spending more than four hours a day on their mobile apps and usage in those countries is projected to rise.

The big driver could be mobile shopping. The mobile commerce market now accounts for about 90 percent of mobile app usage and is expected to rise even further, along with the number of users worldwide buying goods from their smartphones. E-commerce giants like Amazon.com and Alibaba as well as countless other mobile service sites from Uber to Airbnb are becoming more mainstream as more users rely on their smartphones to make purchases and book reservations rather than their desktop computers. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)

Another big factor will be mobile payment services like Apple Pay, Square and PayPal which are predicted to rival the use of credit cards over the next few years. In addition, many traditional brick and mortar retailers–including Walmart and Target–are investing heavily in e-commerce and mobile shopping solutions to complement in-store browsing.

Although the report found that more than 65 percent of mobile users downloaded and installed at least one app in May 2017, the forecasted app economy isn’t necessarily driven by new downloads as it is by usage. According to the ReCode story, App Annie predicts that global usage will double but so will the time and money spent on apps with the typical person spending around $1,000 (up from about $350), on average, using their mobile apps by 2021.

All of this will create opportunities for thousands of entrepreneurs who develop solutions, manage data, nurture customers and secure transactions. If you’re looking for a place to make money, the app economy beckons.