The Business Software Alliance (BSA) has turned its focus to two topics that are sure to grab the attention of politicians when they consider the impact of illegal production and copying of software: lost jobs and lost tax revenue.
The watchdog organisation, led by representatives of Microsoft, Lotus, Novell and other top software companies, has released a report by accounting firm Pricewater-house-Coopers that the BSA says shows piracy has become a major impediment to job growth and tax collection in almost every country in the world.
Microsoft New Zealand is engaged in similar research with Pricewater-houseCoopers to determine the levels of damage sustained by the New Zealand economy.
Marcia Sterling, vice-president of business development for CAD software maker Autodesk, says her company has been telling the US Congress that software piracy is dragging down the US economy in a really significant way. "We asked Price-waterhouseCoopers to assimilate the data to help us understand what the cost of software piracy really is."
The BSA says when piracy goes unchecked, software companies lose millions of dollars in licensing fees on sales of their software products that have been illegally copied. They are also are much less likely to hire people to develop new products if they believe they will only feed the black market. About 40% of the PC business software used or sold worldwide in 1997 was pirated, according to the BSA. The value of that software was about $US11.4 billion.
The PricewaterhouseCoopers report involved research in 61 countries and is the most comprehensive commissioned by the BSA in its 10-year history, Sterling says. It estimates that 1997 piracy rates for one software market segment, PC business software products, ranged from a low of 27% in the US to as high as 98% in Vietnam.
But unlike previous BSA reports that focused largely on the increase in illegal piracy, the report attempts to draw attention to the impact of software piracy on the job market and tax collection. In the US there were about 620,000 people employed directly in the software industry last year, accounting for about $US7.2 billion in taxes. But there would have been about 140,000 more jobs and about $US1 billion more in tax revenue if piracy could be curtailed.
Outside the US, in the 60 other countries combined, the software industry employed about 740,000 directly and indirectly last year, generating about $US21 billion in tax revenue. Those countries, however, could have had about 500,000 more jobs and collected about $US14 billion more in taxes had they reduced piracy, according to PricewaterhouseCoopers.