Reducing Software Piracy Will Garner Siginificant Economic Benefits

Reducing software piracy in Asia by just ten percent over the next four years could generate 435,000 new jobs, over US$40 billion in economic growth, and over US$5 billion in tax revenues above current projections, according to a new study released today by the Business Software Alliance (BSA). In India, reducing software piracy by ten percent over the same period could generate an additional 44,000 new jobs, US $3.1 billion in economic growth, and US $200 million in tax revenues. There is further good news for local vendors, where the study also predicts an additional US $208 million in revenues to local vendors alone.

The study, commissioned by BSA and conducted independently by IDC, notes that the information technology (IT) industry is already a major contributor to Asian economies. In 2007, Asian economies spent over $231 billion on IT goods and services including computers, peripherals, network equipment, packaged software and IT services. That spending supported more than 348,000 IT companies with 5.5 million IT industry employees, and helped generate $167 billion in IT-related taxes.

Yet, the IT sector’s contribution to Asian economies would be even greater if the region’s PC software piracy rate could be lowered by ten percentage points by 2011, the study said. Such an improvement would add highly skilled jobs to the labor force, support the creation of new companies, lower business risks, and fund government services without a tax increase. Moreover, reducing software piracy has a “multiplier effect.” According to IDC, for every $1 spent on legitimate packaged software, an additional $1.25 is spent on related services from local vendors such as installing the software, training personnel and providing maintenance services.

“In a global market that already has an installed base of over a billion PCs, it is not too difficult to see that the growth in the Asia Pacific’s IT sector alone has already translated into significant benefits for the region’s economies,” said Jeffrey J. Hardee, Vice President and Regional Director, Asia Pacific, BSA. “However, out of an estimated $21 billion worth of PC software being employed in new computers in the Asia-Pacific region in 2006, $11.6 billion was deemed to have been pirated. This study clearly shows the huge economic benefits that economies would derive from a ten-point drop in PC software piracy over the course of the next four years.”

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.”