Piracy reduction could boost revenues by $4.7B

A software piracy reduction of up to 22 percent by 2009 could boost local industry revenues by $4.7 billion and create 10,000 new jobs, according to a study conducted by IDC and the Business Software Alliance (BSA).

The study, conducted for the BSA, assessed the impact of the IT industry in 70 countries around the world, including Australia and the economic benefits that those counties would experience by protecting and developing intellectual property.

It found that globally, 35 percent of all business software is pirated and reducing business software piracy in Australia by 2009 could also increase the local IT sector to $33.7 billion and generate another $1.3 billion in additional tax revenues.

Jim Macnamara, BSAA chairman, said 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 percent 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,” said Macnamara.

“If Australian companies are to successfully produce software and compete internationally in the vital IT sector, then protection of their intellectual property from widespread theft is vital.”

Apart from the economic benefits of reducing software piracy, businesses should also note the serious legal imperatives, as 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 gaol terms, the BSAA warned.

Cutting the Asia-Pacific piracy rate of 53 percent by 10 percent could add US$135 billion to its economies, increase industry revenues by more than $106 billion and directly create more than 3.5 million new jobs – more than every other region in the world combined.

The independent study, conducted by IDC, also found the cumulative effect of this growth could mean an additional US$14 billion in new tax revenues that can help pay for public benefits and services.