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12 February 2012 The “App Economy” Estimated to Contribute Nearly Half a Million Jobs to the U.S.

Ever since the Apple iPhone became available five years ago, feature applications, also known as apps, have been adding jobs to the economy. Today, apps are used for businesses, entertainment, games, and endless special areas of interest. Dr. Michael Mandel of South Mountain Economics found in a new study that apps are creating 446,000 new jobs for Americans. Mandel used The Conference Board’s computer data base to find want ads containing words such as “Facebook” or “iOS”. With the total number of want ads for app programing, Mandel studied the ratio of help wanted jobs to the total employment of other businesses that are tracked by the Bureau of Labor Statistics. His study concluded that “there was a one-to-one ratio of programming jobs to support positions (The “App Economy” 1)”. Many of the jobs created have opened up new job opportunities in other areas of employment. Mandel’s study found a spill over multiplier of 1.5 jobs created in other industries. The technological area of the economy has increased dramatically over the last decade and the “App Economy” will continue to create jobs. The economy has changed in every decade of the 20th century from the industrial steel mills of the 1900’s, to the computer industries of the 1990’s. At the start of the 21st century, cell phone technology is leading the way. The iPhone industry and app software is transforming the economy at an even faster rate. If the Mandel study is correct, creating approximately one half million jobs is a big deal for the American work place. Some of the older manufacturing jobs are being lost to foreign manufacturing and to automation. Creating new jobs in computer technology and cell phone communications is a very important development for the American economy. Creating jobs relates to the theme of economic transformation. The presidential candidates talk about high tech jobs and improving the economy. President Obama talks about new jobs in green energy and the importance of higher education so that the unemployed receive training for new positions such as computer technology. In recent economic news, Apple Industries reported huge profits from the sale of iPhones in the 2011 fourth quarter which included the Christmas season. Also, a survey found that Apple’s iPhones are leading cell phone sales by a wide margin over other cell phone competitors. The apps are making a huge impact on the job market in the U.S. Mandel reports the use of the word “app” in help wanted ads has increased 250% in the last 3 years. The wireless applications such as tablets, Wi-Fi, and cell phones are becoming widespread and social networks like Facebook are becoming part of the next generation. The Mandel study is very optimistic on the growth of the app sales.
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1. Could the app economy have any downfalls in the future because of the numerous apps available? 2. Will there always be jobs that can be provided if apps become common place and foreign competitors develop this technology also? 3. Will every industry have jobs related to apps?
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Matthews, Christopher. "Economist Michael Mandel Estimates That the "App Economy" Has Created Nearly Half a Million Jobs in the U.S. | Business | TIME.com." Business | The Latest News and Commentary on the Economy, the Markets, and Business | TIME.com. Time, 8 Feb. 2012. Web. 12 Feb. 2012.
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