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Cutting down software piracy creates jobs and boosts economy

Jack Loo | Sept. 16, 2010
IDC and BSA study says the stimulus effect generates new spending, which in turn, creates jobs.

SINGAPORE, September 16, 2010 Reducing software piracy by 10 percent in Singapore would create close to 2,000 new high-tech jobs, US$520 million in new economic activity, and US$128 million in new taxes by 2013, according to a study by the Business Software Alliance (BSA) and IDC.

The reportThe Economic Benefits of Reducing Software Piracyalso revealed that the same action would inject almost US$41 billion into the Asia Pacific economy, create 350,000 new jobs and generate close to US$9 billion in new tax revenues for governments.

The main message is that through a slight reduction, there would be huge improvements. We hope this study can encourage governments to do even more in their anti-software piracy efforts, said Roland Chan, Senior DirectorMarketing, Asia-Pacific, BSA.

Currently, nearly six out of ten software programs installed on personal computers in Asia Pacific are pirated. Most of this unauthorised software use occurs in otherwise legal businesses that buy too few software licences for their employees' computers. In other cases, criminal enterprises sell counterfeit copies of software programs at cut-rate prices.

Cutting down on software piracy sends ripples of stimulus through the economy by generating new spending on related IT services and distribution. That spending, in turn, creates jobs and delivers new tax revenues.

In addition, the study finds that the benefits are compounded by reducing software theft at a faster rate. If Singapore were to reduce piracy by 10 points over the next two years instead of four, it would boost the economic activity and tax gains by a further 35 percent. Singapore would then produce over US$700 million in new economic activity by 2013 instead of US$520 million and generate US$173 million in new tax revenues instead of US$128 million.

In Singapore, the IT sector is a major contributor to the economy. In 2009, the IT industry supported 77,142 highly skilled, high-paying jobs in Singapore, while IT companies and their employees paid US$2.73 billion in taxes. Additionally, because of software's unique role as a revenue generator for local service and distribution companies, most of the benefits of reducing software piracy remain in the country. The IDC study finds that 75 percent of the added GDP from a four-year, 10 point drop in piracy would remain in the market, said Chan.

 

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