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 Home > News > Technology > Article
Software Piracy Crackdown to Boost Growth-Study
Wed April 2, 2003 03:03 PM ET
WASHINGTON (Reuters) - Stronger protections against illegal copying of computer software could boost world economic growth by $400 billion and generate $64 billion in additional tax revenue for governments around the globe, according to a study commissioned by a U.S. industry group.

The study prepared by research firm IDC for the Business Software Alliance estimated that four out of every 10 software programs are illegally copied worldwide. In China, software piracy levels are a whopping 92 percent.

The biggest source of the problem is companies that illegally "burn" multiple copies of software. "They have more copies than they have licenses for," said BSA President Robert Holleyman. "It's the easiest form of piracy to address."

While the large U.S. companies that make up the organization would benefit considerably from stronger anti-piracy protections around the world, Holleyman argued foreign competitors would also prosper.

"Strong intellectual property protection spurs creativity, which opens new opportunities," Holleyman said. "When local entrepreneurs have a legitimate way to sell their innovations and make a profit from their programming, they can grow their own businesses and hire more people."

The IDC study said a 10 percentage point drop in piracy levels over four years could add 1.5 million jobs around the world and increase global economic growth by $400 billion, which would be roughly 1 percent.

The estimated $64 billion in new government revenues generated by stronger software protections would be enough to provide health care for 32 million people or primary education for roughly 4 million children, the study said.

The goal of reducing global piracy levels to 30 percent is achievable because nearly two-thirds of the 57 countries studied have already reduced piracy by 10 points since 1996, IDC said.

Even a single-point reduction worldwide would raise $6 billion in new tax revenue, the study said.

A 10-point drop in U.S. piracy levels, which are already among the lowest in the world, would boost U.S. economic output by $150 billion, the study said.

A similar decline could quintuple the information technology sector in China and double it in Russia, IDC said.

To curb piracy, the BSA's Hollyman recommended that governments lead by example and boost enforcement and that companies do more to educate people about the need to use licensed software.

The study examined anti-piracy protections in 57 countries that represent 98 percent of the world's information technology market.

BSA represents the United States' leading computer software and hardware companies, including Microsoft Corp. MSFT.O , Apple Computer Inc. AAPL.O , Adobe Systems Inc. ADBE.O , Cisco Systems Inc. CSCO.O , Hewlett-Packard Co. HPQ.N , Intel Corp. INTC.O and International Business Machines Corp. IBM.N . (With additional reporting by Elinor Mills Abreu in San Francisco.)

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