Software Industry Shifts Piracy Strategy

WASHINGTON – The U.S. strategy for its war on global software piracy is
shifting from focusing on the financial damage of intellectual property
theft to the economic benefits of copyright protection.

A new study released today by the Business Software Alliance (BSA) concludes
that countries with the highest software piracy rates stand to reap the
greatest economic gains by protecting intellectual property rights.

“When countries take steps to reduce software piracy, just about everyone
stands to benefit,” said Robert Holleyman, BSA president and CEO. “Workers
have new jobs, consumers have more choices, entrepreneurs are free to market
their creativity and governments benefit from increased tax revenues.”

The BSA’s research, conducted independently by the International Data
Corporation (IDC), claims that cutting the current global piracy rate of 35
percent by 10 percentage points over four years could globally create 2.4
million new jobs, $400 billion in economic growth and $67 billion in new tax
revenues.

John Gantz, chief research officer of IDC, added that the study “provides a
comprehensive snapshot of what we have known all along: reducing software
piracy delivers real results in the form of more funding for education, job
training, health care and overall economic growth.”

According to IDC, a 10-point reduction in software piracy in China, ranked
third in worldwide piracy (90 percent), could create 2.6 million new IT jobs
by 2009, as many IT jobs as the U.S. has been able to create over the last
30 years.

Russia, a country with the fifth highest software piracy rate in the world
(87 percent), could see its IT industry triple in size — growing from $9.2
billion today to $30 billion in just four years.

“There is a recognition by countries that professional intellectual property
protection is a priority for their governments to stimulate their
economies,” said Chris Israel, coordinator for International Intellectual
Property Enforcement at the U.S. Department of Commerce. “There is tangible
evidence that supports this recognition.

Israel noted that China has committed to make legal purchases of software
for its government agencies by the end of this year. Next year, Beijing
promises to bring stricter intellectual property protections to its
enterprise sector, including state-owned businesses.

“All of the commitments China has made to us are achievable. We have very
high expectations,” Israel said.

Despite having the world’s lowest software piracy rate (21 percent), the
study found that the United States stands to gain more than any other nation
from a 10-point piracy cut over four years, boosting its economy by $125
billion.

Although the U.S. IT sector is already projected to grow by almost a third
between 2004 and 2009, it could grow more than 10 percentage points faster
with further piracy reductions.

The study also concluded that while the global IT sector is currently
projected to grow 33 percent through 2009, a 10-point reduction in software
piracy could spur the global IT industry to grow 45 percent larger by 2009.