App Developers Outline Policy Concerns for House Commerce Subcommittee

App companies are suffering from a lack of an educated workforce, said Peter Farago, vice president at Flurry, which helps companies improve their apps’ efficiency. “We literally cannot find the talent we need fast enough to fill the open positions we have.” Too few people have access to retraining and training in higher and continuing education, and companies often have trouble keeping their international talent in the country, he said. “Unless we solve this problem … America will not be positioned to capitalize on this unique moment in time."

Attempts to close this education gap by private companies have been very successful, said Stephanie Hay, co-founder of startup FastCustomer. “It’s not about finding people,” she said, “because most of these people who are talented technically” decide to go into business for themselves. It’s about training people, she said, citing LivingSocial’s “Hungry Academy.” It took people with no development skills and paid them while they trained for five months to become developers for LivingSocial.

What can be done to get more women involved in the app economy, asked Subcommittee Chairwoman Mary Bono Mack, R-Calif. “I think it’s outreach,” Hay said, and that the female entrepreneurs she knows have been mentored by other women in the industry. “It’s a matter of that sort of grassroots effort on the ground,” she said. Hay cited a difference in mentality between men and women. “Women generally tend to be more conservative and take a more strategic approach,” she said of strategies and not political views, while men are less afraid to fail.

The U.S. intellectual property protection system needs to be improved, said Association for Competitive Technology Executive Director Morgan Reed. He often hears ACT members say, “I need to make sure that If I get my app into the marketplace, it doesn’t get stolen.” Small app-developing companies will often create and unveil new products only to have parts or all of the products copied by larger companies, he said. Because the larger companies have a bigger market share and a bigger legal team, the smaller companies rarely seek legal recourse, he said. “We definitely have needs when it comes to improving the quality of the patent, trademark system.” Smaller companies worry about being sued by the larger companies as well, Hay said, citing situations in which small companies find themselves surprised by claims of patent infringement from companies they have never heard of. “That’s, I think, an issue that should continue to get more attention,” she said.

Reps. Bill Cassidy, R-La., and Ed Markey, D-Mass., questioned panelists on threats to privacy that might arise as a result of the growing app economy. “When I get a 50-page document and I click ‘I agree’ at the bottom,” Cassidy said, referring to “terms of agreements” users typically sign before downloading apps, “I haven’t really read those 50 pages. I just clicked ‘I agree.'” It is an “absurdity that we accept that as a true disclosure,” Cassidy told us.

People have the freedom to either enter into or decline those types of contracts, Reed said. “We have a pretty good tradition in this country of letting folks enter into those agreements pretty freely.” Companies need to be transparent in their user agreements, he said. Users should be informed about who has access to their data, said TechNet CEO Rey Ramsey. “We need to make sure that everybody understands what the business models are,” so that customers know how companies are using their data, he said.

Cassidy asked about “a certain censorship that takes place” in curated app stores like Apple’s. So many people use that company’s products, and they can only run apps that are sold through the Apple App Store, Cassidy said. What happens if Apple decides to remove all conservative or liberal content, he asked, referencing a situation in August where the Apple store removed a “socially conservative” app. Reed responded that he supports the right of companies to determine the apps that are sold in their store. This selective nature often lends credibility and provides a sales boost to the apps that make it in, he said.

Spectrum is also a big issue, Ramsey said, calling it “one of the things that would circumvent the growth in this area if we don’t solve that issue.” When asked by Bono Mack what the industry needs regarding spectrum, Ramsey said there’s a need for licensed and unlicensed spectrum. He suggested the federal government allocate part of its spectrum to commercial uses and look at reallocating the spectrum that is inefficiently used by broadcasters. The FCC’s doing that under a February law.