Economic impacts of software piracy

According to the study, which was conducted by IDC, reducing software piracy on personal computers (PCs) over the next four years in Africa and the Middle East could create a stronger local information technology sector, generate new high-paying jobs, and contribute significantly to ongoing tax revenue.

The study notes that the IT industry already is a major contributor to jobs, tax revenues and the gross domestic product (GDP) for the region.

Reducing the region's average 60% PC software piracy rate by 10 percentage points would have a “multiplier effect” and increase those economic benefits, generating 24,000 additional jobs, US$600 million in tax revenues and $3.4 billion in spending in the local IT sector over the next four years.

“When countries take steps to reduce software piracy, everyone stands to benefit,” said Alastair de Wet, compliancy manager for Adobe South Africa and spokesperson for the BSA in Africa.

“With more and better job opportunities, a stronger, more secure business environment, and greater economic contributions from the already robust IT sector, reducing software piracy delivers tangible benefits for governments and local economies.”

IDC finds that for every US$1 spent on legitimate packaged software, an additional US$1.25 is spent on related services such as installing the software, training personnel, and providing maintenance services. Most of these benefits accrue to locally-based software services and channel firms – meaning the greatest proportion of the economic benefits from lowering software piracy stay within the country.

IDC research released by BSA in May 2007 found PC software piracy rates in Africa as high as 91% in Zimbabwe, with rates in the region generally above 80%.

BSA spends much of its efforts building awareness among small & medium-sized enterprises (SMEs) about the risks and legal consequences of using unlicensed PC software.

“Reducing PC software piracy is important for business owners and SMEs in order to reduce the legal and business risks of using unlicensed software,” said Thomas Hansen, general manager for Microsoft West, East and Central Africa, a BSA member company.

“But software is unique in its ability to drive value throughout other sectors. Thus, policy makers should find a compelling case for taking steps to reduce software piracy in order to reap the economic benefits of a strong national software and IT sector. It's clear that reducing software piracy delivers real results that help real people with real challenges.”