Software piracy cut a $4.7b boost to economy

Stan Beer
Friday, 09 December 2005 17:04

IT Industry - Development

A reduction in unlicensed software use could boost Australia’s economy by creating new jobs and business opportunities that would generate billions of dollars in new spending and tax revenues, according to an economic impact study released today by the research firm IDC.

The study, conducted for global software body, the Business Software Alliance (BSA), assesses the impact of the information technology industry in 70 countries around the world, including Australia and the economic benefits that those countries would experience by protecting and developing intellectual property. 

Globally, 35% of all business software is pirated.  Reducing that rate by 10 points over four years would create 2.4 million new jobs, increase economic growth by US$400 billion and generate US$67 billion in new taxes to help governments fund public programs like education, health care and law enforcement, the IDC study shows.

In Australia, reducing the rate of business software piracy by 10 points to 22% by 2009 could increase the local IT sector to nearly A$33.7 billion, boost local industry revenues by A$4.7 billion, create 10,000 new jobs and generate another A$1.3 billion in additional tax revenues.
 
According to Jim Macnamara, chairman of BSA affiliate, the Business Software Association of Australia (BSAA), the economic impact study shows that growth and profits in the IT sector flow on to the whole economy through employment, tax revenues and profits to local distributors, retailers and developers.

“The IT sector is a proven engine for global and Australian economic growth, but relatively high rates of theft of intellectual property mean that the sector has yet to achieve its full economic potential,” he said. “No other sector of the economy has to operate with product theft rates of 32% as the software sector has to in Australia,” he added.

The BSAA says the research “destroys the myths that software piracy is a victimless crime and that it benefits some by reducing the cost of software”. “While some organisations and individuals avoid the cost of purchasing software, other businesses bear the cost through reduced sales and ultimately the whole economy loses through reduced employment and tax revenues,” Mr Macnamara said in releasing the study locally.

Earlier this year Australian Copyright Law was amended to make unlicensed software use in businesses a criminal offence for the first time, carrying major penalties and potentially jail terms.