Driving down software piracy – why should governments care?

Guest blog from Business Software Alliance

Australia has one of the world’s most comprehensive legislative regimes for the protection of intellectual property, including software.  Now it’s time for Australian governments to focus on enforcement.  The latest report on the state of global software piracy demonstrates that concerted efforts by government working hand-in-hand with industry groups to reduce software piracy can reap substantial benefits for local technology businesses and the entire Australian economy.

The seventh annual global study by IDC on the state of global software piracy shows that despite continued efforts by the Business Software Alliance (BSA), an international association representing the global software industry, to raise awareness of software piracy, the global software piracy rate increased from 41 to 43 per cent in 2009.

In Australia, installations of unlicensed software on personal computers (PC) in Australia fell by one per cent to 25 per cent from 2008 to 2009. The commercial value of this illegal software amounted to US$550 million in 2009.

This study underscores the importance of the BSA’s efforts to reduce unlicensed software use in Australia. A piracy rate of 25 per cent is an improvement, but it is still unacceptable. As we emerge from the most severe global economic recession in 20 years, the BSA will continue to engage with government and businesses about the risks of stealing software and the harm that software piracy causes to Australia’s economy.

Currently, the Australian government is missing out on US$400 million in tax revenues, according to a 2008 BSA/IDC study on the economic impact of reducing software piracy*. Furthermore, lowering the software piracy rate in Australia by 10 points over four years would create an additional 3,900 new Australian jobs and US$1.9 billion in economic growth in Australia.

These statistics may sound far-fetched, however in 2003 the BSA/IDC Global Piracy Impact Study projected that China would gain an additional 200,000 jobs by lowering PC software piracy by 10 percentage points in four years. By 2008, China had actually added more than 800,000 jobs to its IT industry, of which IDC attributes 220,000 to lower PC software piracy, the rest to autonomous market growth.

In fact, IDC estimates that for every dollar of legitimate software sold in a country, there are another $3-$4 of revenue for local service and distribution firms. Piracy also puts organisations at risk by compromising their computer security, since pirated software often contains malware or does not receive vital security updates.

There needs to be greater partnership between government and BSA on local anti-piracy programs, as well as greater resources for federal and state police departments, to engage with BSA’s enforcement programs.

In Australia, the BSA has run a number of local campaigns to raise the awareness of software piracy. The BSA Software Piracy Sentiment Monitor 2009, commissioned by the BSA and conducted by marketing company Outsource, surveyed nearly 300 corporate IT decision-makers, ranging from IT managers to CIOs, across various industries in Australia to gauge perceptions and attitudes of Australian businesses towards software piracy  to benchmark its efforts for raising awareness for the risks of organisational software piracy.

The BSA continues to run online and print advertising campaigns to raise the awareness for the risks of using illegal software, including counterfeit and under-licensed software, targeted at both corporate software users and their directors. These campaigns also aim to foster the implementation of good software asset management (SAM) practices, which assist organisations to maintain legal and compliant software licences, as well as avoid paying for software licences they do not require.

How can government step up to help enforcement on software piracy?

• Create specialised intellectual property enforcement units at the national and local level and provide dedicated resources to investigate and prosecute intellectual property theft.
• Increase cross-border cooperation among Australian police forces and with international enforcement agencies to improve coordination for law enforcement.
• Support the training of law enforcement officers and provide better technical assistance to ensure people on the front lines of piracy enforcement are equipped with the tools to deal with the changing nature of intellectual property theft.
• Work with technology industry groups to educate Australian businesses and consumers about the risks of software piracy and other forms of intellectual property infringement, and the benefits of buying genuine products.

Clayton Noble, Co-Chair, Business Software Alliance Australia

* The Economic Benefits of Reducing PC Software Piracy, January 2008, www.bsa.org/idcstudy

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