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Software piracy curb would boost global economy: study

Posted by inet - 2005-12-10

Curbing the use of illegally copied software would yield vast economic benefits globally -- including in countries like China and Russia, where piracy rates are high, an industry study concluded.
The study covering 70 countries released by the Business Software Alliance that cutting the global rate of software piracy -- estimated at 35 percent -- by 10 percentage points would generate 2.4 million jobs, 400 billion dollars in economic activity and 67 billion dollars in tax revenues globally.

Notable is the study's conclusion: Countries with high rates of piracy would capture the largest share of economic gains. China, for example, could create 2.6 million new jobs in information technology and Russia could triple its IT-sector jobs by achieving the 10-point piracy reduction, the report said.

"When countries take steps to reduce software piracy, just about everyone stands to benefit," said Robert Holleyman, president and chief executive of the industry group.

"Workers have new jobs, consumers have more choices, entrepreneurs are free to market their creativity, and governments benefit from increased tax revenues."

John Gantz, chief research officer of International Data Corp., the research firm that conducted the study, said benefits of reducing piracy are shared globally even if money flows to countries like the United States, where the software is produced.

"The retailers, service channels, installing, deployment and training -- that's a bigger market than the packaged software itself," Gantz told a news conference in Washington where the report was released.

Nonetheless, the report concluded the United States would get an economic benefit of 125 billion dollars through 2009 if the global piracy rate came down by 10 percentage points.

The study also concluded that while the global IT sector is currently projected to grow 33 percent through 2009, a 10-point reduction in software piracy could boost that by an additional 45 percent by 2009.

The overall global software piracy rate is down from 40 percent three years ago and is well below the 1994 record of 49 percent.

Holleyman said some countries have achieved success in curbing software piracy, citing Italy and Taiwan as examples.

The 10-point reduction is "achievable", Holleyman said, adding that such a move would "jump-start the next global high-tech boom".

Chris Israel, coordinator for global intellectual property enforcement at the US Department of Commerce, who attended the news conference, said governments are increasingly demonstrating they want to reduce piracy.

Government leaders around the world "are recognizing that their economies will grow in a much more vibrant manner if they protect intellectual property," he said.

The study found little change from a year ago in the countries with high piracy rates.

Vietnam had the highest piracy rate at 92 percent, followed by Ukraine (91 percent); China (90 percent); Indonesia and Russia (87 percent); Kazakhstan (85 percent); and Serbia-Montenegro (81 percent).

Among regions, Latin America had the highest rate (66 percent), ahead of Middle East and Africa (58 percent) and Asia-Pacific (53 percent). North America had the lowest rate (22 percent), better than the European Union (35 percent).

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