Mobile and tablet apps generated revenue of €17.5bn for developers based in the European Union last year, according to a new report.

The study, by the Insight Centre for Data Analytics at NUI Galway and Gigaom Research, found that €6bn of the revenue came from in-app sales, in-app spending and advertising, with the remainder coming from the labour needed to build the apps.

The authors predict that the market for apps in Europe will grow significantly, to €63bn within five years.

The Eurap study, ‘Sizing the EU App Economy’, says the number of people involved in app development in the EU will grow from one million last year to 2.8 million by 2018.

A further 1.8 million people were involved in marketing and support of in-app products in 2013, and that will grow to 4.8 million in 2018, the report says.

The report identifies a number of bottlenecks and barriers to the growth of the EU app economy. 

Aside from technical issues, developers also face the challenge of increasing users' willingness to pay for apps.

Eurapp is a year-long project run by the Insight Centre for Data Analytics at NUI Galway and by Gigaom Research. Its aim is to look at the opportunities and challenges facing the EU app economy.

Over the past year, the Eurapp team interviewed stakeholders in the app development world and surveyed hundreds of companies that are producing apps.

The study also found that game app developers lead the field, with 28 companies in the EU creating 40% of the top 100 grossing apps in the EU and US.

The report also identifies problems that app developers are experiencing in accessing skills, with 38% of independent and in-house developers saying EU companies had difficulties competing with US salaries.

A third also said that developer education was lagging and that startup developers lacked business expertise, while a quarter said there were not enough developers. 

The report also found that only 9% of developers are female.