The ‘apps economy’ is booming in Canada, with Ontario leading the way

If content is king, Ontario is the sitting on the Canadian throne.

According to the Information and Communications Technology Council (ICTC), there are 64,000 people employed in Canada’s “apps economy,” working directly or indirectly to expand the content ecosystems on various mobile platforms. This number has grown by a quarter since late 2012, when the first survey was taken, and extrapolates that there will be over 110,000 jobs in the field by 2019.

Ontario leads the way with 28,700 jobs, with Quebec  and British Columbia next at 14,000 and 8,800 respectively; revenue generated from the economy tops $1.7 billion per year. Being a Canadian-focused study, “The Appification of Everything: Canada’s apps economy value chain” looks at the entwined relationship of government, educators, and industry in growing Canada’s Information and Communications Technology sector (ICTC is partially funded by the Government of Canada), and warns of a talent drift down south.

“Talent is one of the most important considerations in ensuring Canada takes full advantage of this opportunities offered by mobile technologies and mobile apps,” said Namir Anani, President and CEO of ICTC, who echoes the industry’s concern of retaining talent and capital. Most clients of app developers are medium businesses between 10 and 50 people and, according to the study, “nearly a third—and a growing segment—of the clientele of Canada’s apps enterprises are healthcare providers, education providers, and government agencies.”

With 18 million app users across 21 million smartphones, Canadians tend to be some of the heaviest users of mobile software and, in turn, data. Revenue from apps tends to stay within the province in which it was created (40%), while the United States makes up 28% of the money from Canadian app enterprises. Canadian development firms still have trouble raising the necessary capital for larger projects, according to the study, and as a result tend to either keep their projects small, or are hired by particular firms for long-term projects. The typical cost to create an app is $20,000, but stretch to $5 million in the case of long-term projects with health providers.

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Some interesting trends emerge with app funding, too: over a quarter of app developers derive capital from other business streams, while 13% either crowdfund or go through incubators; only 6% get funding through venture capital. Over half of app developers still self-fund or go through angel investors.

It’s clear that the app market is alive and well in Canada, but there is a long way to go to turn Toronto, Montreal or Vancouver into a New York City or San Francisco.