India's GDP Could Increase By $739 Mn By Use Of Licensed Software

A new study from BSA - The Software Alliance and INSEAD, one of the world’s leading business schools, finds that increasing the use of properly licensed software would have a greater impact on the economy in India than allowing similar growth in the use of pirated software.

A 1 percent increase in use of licensed software would generate almost US$1.3 billion in national production, compared to US$554 million from a similar increase in pirated software — meaning properly licensed software would deliver US$739 million in additional economic value. Competitive Advantage: The Economic Impact of Properly Licensed Software is a groundbreaking analysis that draws on data from 95 economies – of which 15 are from the Asia-Pacific – to demonstrate the benefits to national economies of using fully licensed software. The study confirms that increasing use of licensed software corresponds to substantial positive gains in gross domestic product (GDP), and that the economic stimulus effect of properly licensed software is significantly greater than that of pirated software.

“Using properly licensed software reduces risk and creates operating efficiencies that go directly to the bottom line for enterprises,” said Yolynd Lobo, BSA’s Director, India. “This study confirms that licensed software is not just good for firms — it is an important driver of national economic growth. Government, law enforcement, and industry in India should take every opportunity to reap these potential gains by reducing piracy and promoting use of properly licensed software.”

The study also finds that each additional dollar invested in properly licensed software has an estimated return on investment (ROI) of US$75. This compares to a US$19 return from each additional dollar worth of pirated software put into use.

Among the study’s other findings:

• Increasing the amount of licensed software used in the Asia-Pacific by 1 percent would add US$18.7 billion to the regional economy, compared to US$6 billion from pirated software, meaning a US$12.7 billion difference.

• Increasing licensed software use globally by 1 percent would inject an estimated US$73 billion into the world economy, compared to US$20 billion from pirated software — a difference of US$53 billion.

• Every economy included in the study saw greater economic returns from properly licensed software than from pirated software.

• On a dollar-for-dollar basis, the return on investment from using properly licensed software is greatest in developing economies — US$437 in extra GDP, on average. Still, economies across all income levels benefit: each additional dollar invested in licensed software has an average ROI of US$117 in high-income economies and US$140 in middle-income economies.

“Previous studies have shown that value-added services delivered with properly licensed software help firms to reduce costs and increase their productivity. This report goes one step further to ascertain the impact of software use on national production,” said Eduardo Rodriguez-Montemayor, senior research fellow at INSEAD eLab. “The results make it clear that licensed software is beneficial for business and national economies — and that licensed software has a greater economic impact than pirated software across all economies included in the study.”

Governments and enterprises wanting to embrace the economic opportunity presented by licensed software use should take action in the following areas:

• Establish strong and modern intellectual property laws that protect software and other copyrighted materials on PCs, mobile devices, and in the cloud.

• Step up enforcement of intellectual property rights with dedicated resources.

• Raise public awareness about the risks of software piracy.

• Lead by example by using only fully licensed software and implementing software asset management programs.