Pirate software costs $51 billion, says survey

More than four out of ten software applications in use around the world are unlicensed or pirated, an IDC study has calculated. The detailed IDC study on behalf of the Business Software Alliance (BSA) industry pressure group paints a picture of sky-high global piracy rates, led by the usual suspect countries such as Vietnam (85 percent unlicensed software), The Ukraine (85 percent), China (79 percent) and Russia (67 percent).

By contrast, unlicensed software use in the well policed US is 20 percent, Sweden and Belgium 25 percent, with the UK not far behind on 27 percent.

The benefit of attacking this behaviour would be huge, the study suggests. Even a modest 10 percent cut in worldwide software piracy would by 2013 boost the global economy by $142 billion (£91 billion), raise $32 billion in tax revenues and create half a million new high tech jobs.

Reducing the UK’s rate by 10 percentage points by 2013 would generate £5.4 billion ($8.3 billion) in economic activity, raise £1.5 billion in taxes, and create 13,000 high-tech jobs, with 87 percent of the benefits staying in the local economy, the study reckons.

“Reducing software piracy is an opportunity to inject much-needed stimulus into the economy,” said BSA UK committee chair, Michala Wardell. “This study shows that the entire economy can benefit from lowering software piracy in the UK as aggressively and as quickly as possible.”

The methodology used to calculate the claimed savings is, the BSA and IDC claims, verified by the experience of Russia and China where lower piracy levels led to a level of economic and job growth consistent with the model.

In the BSA’s view, the impact assessment adds strength to the need to make the provisions of the World Intellectual Property Organisation’s Copyright Treaty global, improve global IP enforcement across borders, and hit pirates as hard as possible.

The report’s main wrinkle is that it ignores the fact that most intellectual property worth pirating is in producing countries such as the US, while the pirating hotspots produce little of their own. In that assessment, piracy is really a form of economic warfare, where the act of stealing IP is a way for poorer countries to even out economic differences.

It also favours IP producers over even legal consumers, a power imbalance that has caused controversy.

“A 10 percentage point reduction is realistic due to the advances in Software Asset Management, which is making licensing and compliance easier than ever for businesses, but it is now down to all organisations to spread the news and drive towards this target,” commented Matt Fisher of software asset management company, FrontRange.

The BSA has in recent days launched a concerted campaign to get the piracy theme into people's minds, last week revealing that it recently paid an IT professional a £10,000 bounty for informing on a former company that was using unlicensed software.