Asian Software piracy reduction worth US$40 billion: study

Alex Zaharov-Reutt
Monday, 18 February 2008 12:51

Business IT - Technology

Russia could likewise benefit massively from only a 10% cut in their piracy rate.

Russia’s PC software piracy rate is set at 80%, and that 10% reduction “could help make the Russian IT sector larger than India’s within four years, putting it among the top three fastest-growing IT markets in the world”. 

By 2011, with reduced software piracy, Russia’s IT sector would see annual growth in spending rise from 14.6% to 18.2% between 2008 and 2011, and valued at US$33.9 billion by 2011.

The BSA’s Hardee said that: “The IDC data offers convincing evidence that countries with moderate and high piracy rates stand to gain the most from reducing piracy in terms of creating stronger local IT sectors — and stronger economies and societies overall”.

Speaking on behalf of IDC, Marcel Warmerdam, Research Director of IDC IT Markets said, “This study seeks to quantify the positive economic gains countries would likely benefit from their efforts to drive down software piracy. The encouraging numbers found in this study should serve as further incentive for governments to do even more to promote intellectual property rights protection in their markets.”

Warmerdam added that: “A strong IT sector can serve as a major contributor to domestic labor productivity and national economic growth. And because most of the benefits from a reduction in software piracy accrue to locally-based software services and channel firms, most of the benefits stay within a country”.

So, what steps does the BSA suggest Governments can take to reduce software piracy? The study suggests what could well be a 5 point plan:

1. Update national copyright laws to implement World Intellectual Property Organization (WIPO) obligations;
2. Create strong enforcement mechanisms, as required by the World Trade Organization (WTO), including tough anti-piracy laws;
3. Dedicate significant government resources to the problem, including national IP enforcement units, cross-border cooperation, and more training for local officers;
4. Improve public education and awareness; and
5. Lead by example by requiring the public sector to use only legitimate software. 

I’d like to break from the report for a moment to suggest a sixth point that would certainly encourage more companies to legitimately buy software instead of pirating it: Governments could reduce taxes by at least 10%, preferably much more.

Lowering the tax burden frees up money to be spent on software and services, boosting the economy even further when coupled with a 10% reduction in the piracy rate, and probably raising the total tax even further, despite a tax cut, from what would be even greater economic activity thanks to more legal softawre purchases.

Hardee concluded the BSA’s statement by saying that: “42 economies were included in this study, collectively representing 91% of the entire global IT sector. Of these, 11 were Asian economies whose IT sector represents 94% of the total IT sector size of the region”.

Hardee continued that: “The lessons to be learnt here are clear and simple whether a country is included in this study or not – when economies take steps to reduce software piracy, everyone benefits. In an ever competitive global economy, there is no clearer confirmation for governments to act positively on the belief that the IT industry will be an increasingly significant component of its economic future.”