Thursday, October 7, 2010

Curbing piracy to spur economic growth

Findings show that more than four out of 10 software programs installed on personal computers around the world last year were pirated.


Business Software Alliance (BSA), which is fighting software piracy, has categorically stated that a reduction in the piracy rate could inject the much-needed stimulus in the Asia-Pacific economies.

Wondering how software piracy reduction could boost economic growth?

Consider this: You buy a licensed software (say, anti-virus) to be installed on your PC. The licence could be for installing the software on three PCs, but you instead share the same with your friends and install it on 10 or more PCs. Thus such unauthorised software use tends to occur in otherwise legal businesses.

Unauthorised software

Findings show that more than four out of 10 software programs installed on personal computers around the world last year were pirated. While most pertained to unauthorised use of the software, incidences of software piracy involving overt criminal enterprises selling counterfeit copies of software programs by under-cutting the rates – online and offline have also been reported.

“The cumulative impact of all these forms of software theft inhibits economic growth globally. It goes beyond the multinational software publishing industry to affect distributors and service providers,” says Mr Keshav S Dhakad, Chair of the India BSA Committee.

BSA, in association with IDC, conducted a study titled “The Economic benefits of reducing software piracy”. The findings underscore the need to focus on reducing piracy in a systematic way in India's economic interest.

“By reducing the 65-per cent software piracy rate in India by 10 percentage points over four years, we will be able to create over 59,728 high-tech jobs, $4.6 billion in new economic activity, and close to $512 million in new taxes , with 76 per cent of those benefits expected to remain in the local economy,' states the study.

(The study, based on IDC's Piracy Impact Model, has taken into account the ratio between spending on legal software and spending on related IT services and distribution in each market.)

“This study demonstrates that a slow pace in piracy reduction would affect the overall economic growth of the IT industry in India, de-incentivise local product companies' innovation efforts, undermine the Government's ability to collect legitimate taxes from the sale of legitimate software and fuel organised criminal activity linked with piracy,' Mr Dhakad said.

(The study covered 42 countries but in Asia-Pacific, it looked at 13 economies, namely: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.)

Fundamental shift

“There has to be a fundamental shift in public attitude towards software and intellectual property (IP). Public education is, therefore, critical to create awareness,' Mr Dhakad noted.

The firm has recommended the implementation of the World Intellectual Property Organization's Copyright Treaty to create an effective legislative environment for copyright protection, online and offline; creation of a strong and workable IP enforcement mechanism and improved cross-border cooperation among law enforcement agencies.

“Since Governments are the largest users of software in the world, the most effective mechanism for public persuasion could stem from governments on the use of and in promoting legal software,” Mr Dhakad said.

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