Cutting software piracy would help UK economy, says BSA

The study – a global assessment of the IT sector’s economic impact, carried out by International Data Corporation (IDC) – reveals that the UK’s software piracy rate is a relatively low one of 27%; but a successful piracy crackdown could still jumpstart growth in the sector.

At present, the domestic IT sector will grow 30% through 2009, but a 10% reduction in the software piracy rate could increase that growth to 37% over the same period.

The UK IT sector currently includes 64,296 IT businesses, employs 534,718 people and contributes £25.9bn in tax revenues. It is valued at £39.8 billion. However, a 10% reduction in the UK’s software piracy rate between 2006 and 2009 could increase this value to £54.5 billion, says IDC.

It could also create an additional 33,874 high paying IT jobs, a further £10.9 billion in contributions to the UK’s GDP (Gross Domestic Product) and an additional £2.8 billion in tax revenues.

"The software industry has a key role in the UK economy and acts as a catalyst for productivity and growth," said Janet Anderson MP, Chair of the All Party Parliamentary Group on Intellectual Property Protection. "Piracy stifles innovation and creativity and clearly has a significant impact on employment, economic growth and public spending.”

A 10% reduction in the global piracy rate (currently 35%) could spur the global IT industry to grow 45% larger by 2009, says IDC. Worldwide, 2.4 million new jobs could be generated, economies could grow by $400 billion and $67 billion in tax revenues could be created.

Without this reduction IDC predicts that the industry will grow only 33% in that time.

Within the EU, the largest IT sector in the world behind the US, a 10% drop in the EU piracy rate (also currently 35%) by 2009 could generate $88 billion in additional economic growth, $25 billion in additional tax revenues, and add an additional 155,000 IT jobs. 

Siobhan Carroll, Regional Manager, Northern Europe, for BSA commented: “The software industry is a powerful driver of economic benefits in the UK and across the EU and is becoming increasingly important as we move into a knowledge economy.”

“But the current contribution represents a fraction of the potential economic gains that could be felt in and beyond the software industry. More needs to be done to protect the value of intellectual property in terms of education, legislation and enforcement if the UK wants to realise the potential benefits of the IT industry,” she warned.

The study sets out five steps that countries should take in order to increase intellectual property protection and crack down on software piracy. It recommends that nations:

• Update national copyright laws to implement World Intellectual Property Organisation (WIPO) obligations;
• Create strong enforcement mechanisms, as required by the World Trade Organisation, including tough anti-piracy laws;
• Dedicate government resources to the problem, including national IP enforcement units, cross-border cooperation, and more training for law enforcement;
• Improve public education and awareness; and
• Lead by example by requiring the public sector to use only legitimate software.

The European Union has already adopted a civil “Enforcement Directive”, which will help EU copyright holders enforce their rights. It is due to be implemented by April next year.

In the UK, the Government recently announced an independent review into intellectual property rights, looking at the way in which the Government administers the awarding of intellectual property rights, and the support given to consumers and business.