Survey: Software piracy stalls growth

Software piracy is rampant and hampering economic growth, and it is increasingly in the hands of organised groups which are regarded as legitimate businesses in some countries, says a survey.

    The global piracy rate is currently around 35%

    The global piracy rate is currently around 35%, coming down only 1% a year, research group IDC found in a study commissioned by the Business Software Allliance (BSA) which represents around 50 software firms.

    "A key trend over the last two or three years is organised piracy which has become a legitimate business in some countries," said Duncan Brown, IDC's consulting director.

    Thursday's study, covering 70 countries which represent 99% of the world's information technology spending, said that a worldwide reduction of software piracy by 10% points to 25% could generate 2.4 million jobs and $400 billion of economic growth.

    War on piracy

    The battle against software piracy has been relatively successful over the last 15 years, with the piracy rate in Europe dropping to 35% from almost 80% in 1992 when the European authorities adopted special legislation.

    "Without piracy we could increase revenue by 30 to 50%"

    Dominique Pouliquen, chief executive of French image-based creation software firm Realviz

    Still, a 35% piracy rate is more than 20 times higher than the percentage that retail stores lose through shoplifting, said Beth Scott, European vice-president for the BSA.

    While software pirating 'steals' a copy and therefore differs from stealing material goods, it has a real effect on the economy by cutting revenues and limiting software companies' ability to invest in products, she said.

    Dominique Pouliquen, chief executive of French image-based creation software firm Realviz estimates it misses out on as much as 50% of sales.

    "Without piracy we could increase revenue by 30 to 50%. At the very least, this would mean that there would be fresh funds available for investment to hire 7 to 10 additional staff in research and development," he said.

    At its worst, piracy runs as high as 90% in China and 87% in Russia. The United States has a modest 21% piracy rate.

    China is already one of the world's biggest personal computer markets, but does not even make it into the top 20 of software markets because so much software is illegally copied.
    The BSA requests governments to lead by example and it also urges countries to upgrade laws, improve policing and raise public awareness.

    SOURCE: Reuters


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