Reducing software piracy can inject $142 bn into economy

WASHINGTON - Reducing software piracy by 10 percentage points in four years would inject over $142 billion into the global economy, create nearly 500,000 jobs and generate close to $32 billion in tax revenues, according to a new study.

Moreover, reducing software theft at a faster rate in two years could boost the economic benefits another 36 percent, suggests the study by the Business Software Alliance (BSA) and the leading market research firm IDC.

For example, the “BRIC” markets (Brazil, Russia, India and China) could add nearly 328,000 new jobs, almost $29 billion in new spending and more than $6 billion in new taxes by reducing piracy by 10 percentage points in four years. They could boost the spending and taxes another 32 percent if they achieve the reduction in two years.

The new study, “The Economic Benefits of Reducing Software Piracy”, documents the economic impact of reducing PC software piracy rates in 42 countries. It finds that more than 80 percent of the benefits associated with lowering software piracy accrue to local economies around the world.

The US, the world’s largest software market, could add more than 25,000 jobs, nearly $38 billion in new economic activity and $6.1 billion in tax revenues by reducing piracy 10 percentage points in four years. And it could boost the new spending and tax revenues another 38 percent by achieving the piracy reduction in half the time.

Similarly, European Union countries stand to add more than 61,000 new jobs, nearly $43 billion in new consumer and business spending, and close to $13 billion in new tax revenues by reducing piracy 10 percentage points in four years. And they could boost the new spending and extra tax revenues another 37 percent if they achieve the piracy reduction in two years.

Noting that cutting the prevalence of software theft sends ripples of stimulus through the economy, BSA President and CEO Robert Holleyman said: “Now more than ever, governments must act quickly to address PC software theft within their borders.”

“At a time when economies around the world are emerging from one of the worst recessions in decades, this study clearly shows that aggressively fighting software piracy today means greater economic benefits tomorrow - for the entire global economy, not just the software industry.”

To effectively reduce software theft around the world, BSA recommends promoting education about the value of intellectual property (IP) and implementation of the World Intellectual Property Organization’s Copyright Treaty to create an effective legislative environment for copyright protection, online and offline.

(Arun Kumar can be contacted at arun.kumar@ians.in)