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Stomping piracy mandates IT hirings, increases jobs and revenues study concludes; everyone wins except the pirates

Piracy is stronger than ever in the digital world today.  Movies, books, and music -- none are safe from the reach of pirates. The media typically reports chiefly on the harmful effects of these crackdowns, but what good might they yield?  This was the angle taken by a recent study by IDC IT Markets, which investigated the possible beneficial financial impact of increased efforts to cut software piracy worldwide.

Software piracy, which Romania says is akin the foundation of its statehood, accounts for billions in lost revenue worldwide.  China has a piracy rate of 82%, while Vietnam has a piracy rate of a whopping 88%.  Reducing this piracy by only 10% would generate $40 billion USD in economic growth and $5 billion USD in tax revenue for the region, according to the IT firm helping with the study.

IDC analyst
Marcel Warmerdam states, "In a country with a high piracy rate like Vietnam, a local software entrepreneur is not going to develop software because it will be stolen. That means high piracy countries don't develop a local software sector and that's bad because software helps companies become more competitive."

The IDC study also covered 42 other countries.  If piracy was cut in these countries by 10% over the next four years, the study estimated that it would generate 600,000 high-tech jobs in the U.S. and abroad.  It would also generate
$141 billion USD in new revenue and provide $24 billion USD in new global tax revenue.

Countries could hire IT experts to help fight piracy, which would both strengthen their economy and foster a high-tech industry, the study states.  It points out that if China cut its piracy by 10%, the additional IT personnel needed would allow it to surpass the U.S. for the largest IT workforce.  It points out that if Russia did the same, it could surpass India in IT force size, possibly bringing relief to the economic-stricken nation.

On the home front, a percent reduction would lead to
32,000 new jobs and add an additional $41 billion USD to our economy.

The study does note that most of the jobs created from fighting piracy will be overseas.  Since Asia has by far the highest piracy rates, it would have the largest job influx with
435,000 new jobs stemming from the theoretical reduction.

While the study is certainly in the realm of theory, it provides an interesting perspective on the benefits of cutting piracy in a time when public sentiment remains very sympathetic towards pirates.



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Some serious questions on methodology
By killerroach on 1/24/2008 10:06:40 AM , Rating: 5
In the case of China and Russia's piracy problems, the question is whether they have the stability in their law enforcement and government systems to even do much of anything with respect to tackling the organized crime syndicates that are behind a fair share of the industrial-level piracy.

Secondly, it seems to make the assumption that these jobs will just magically come out of the ether, rather than the more accurate assumption, which is that these will impose additional costs on the people of these developing nations, some of whom may end up turning to the black market to meet more of their needs if they are unable to obtain things through legitimate channels anymore. To wit, there's the possibility of both said piracy being driven further underground as well as the possibility that these "piracy fighters" come from other sections of their economy, in effect just shuffling personnel around rather than the actual "creation" of jobs.

That being said, it seems as though, by focusing on the IT jobs that could be created, that the study is more apt to be looking at casual-level piracy, which, while potentially pervasive, lacks the scale and scope of the more organized rings, which would require more positions in law enforcement rather than IT... I get the feeling that some researcher here is trying to throw this theory of his out there to see if gullible American politicians will accept this as part of an "economic stimulus"...




RE: Some serious questions on methodology
By Master Kenobi (blog) on 1/24/2008 10:20:32 AM , Rating: 3
Well in honesty, theres nothing economic about this. China as a country (government level on down to corporate level) steals everything from competitors. This is how they have been able to achieve such a technological increase in such a short period of time.


RE: Some serious questions on methodology
By Targon on 1/24/2008 11:54:48 AM , Rating: 2
You have to love how the governments around the world have been willing to continue doing business with China even when this kind of thing is hurting the overall economy. There really should be a push to change where things are manufactured from China to other countries that respect IP laws.


By rcc on 1/24/2008 12:47:35 PM , Rating: 4
Unfortunately, the consumer wants cheap. That is almost totally incompatible with manufacture in a country that respects IP.


RE: Some serious questions on methodology
By eye smite on 1/24/2008 2:04:41 PM , Rating: 4
China may be the worst but everyone pirates. If they can't get sites ot p2p clients to fiter the content right, it deserves to be downloaded for free and become public domain. The key always driving piracy is the companies greed. I have to wonder how much piracy came down here in america when they started the $5 dvds at walmart. People see a new movie, it's $19, naw can't afford that, oh hey I can download it free over here. That was 6 yrs ago when gas was $1.21 a gallon, now days it could be worse, I don't know. I suspect though that it has reduced because of dvd prices coming down. Let's cut to the chase though, this is more greedy people whining about the money they aren't making and doing very little about it............but whining. Ok, time to get back to WOW.


RE: Some serious questions on methodology
By qwertyz on 1/24/08, Rating: 0
By rcc on 1/24/2008 7:00:05 PM , Rating: 2
Exactly which world do you live in?

What were the Windows vs. Linux stats?


RE: Some serious questions on methodology
By Talcite on 1/24/2008 1:37:25 PM , Rating: 1
Another question that this methodology raises is that it assumes you need to sell copies of software to make money.

This is not true.

Canonical gets profits by providing commercial support for its free ubuntu software. Many other companies do this too. Novell is another example where a large portion of its revenue is from providing commercial support for its open source software. Granted, they're not exactly Fortune500 companies, but they're formidable nonetheless.

Piracy is a huge problem these days, but instead of fighting it directly, software companies should change their business models and adopt open source policies. No one cares if Linux or any other open source program is 'pirated'. It's intellectually open and you only run into problems if people start charging money for things that were free in the first place. That doesn't have bearing on the topic though, because that's easy to prove and that's easy to fight.

Another point is that you also can't pirate support. The open source business model doesn't fit into conventional business models or even conventional economics models of 'incentive', but that doesn't mean it doesn't work. Perhaps it's about time someone redefined those models.


RE: Some serious questions on methodology
By rcc on 1/24/2008 2:53:35 PM , Rating: 2
The problem with your analogy is that "Canonical" doesn't actually produce anything. They depend on someone else's free work.

If MS, Apple, etc. adopted this approach, OS development would stall. After all, how many people actually need to call the developer for support?


RE: Some serious questions on methodology
By ElrondElvish on 1/25/2008 3:02:08 AM , Rating: 2
You have no idea what you're talking about.

Canonical sponsors a ton of projects financially, as do IBM, Red Hat, Novell, etc, etc. Its not just 'depending on someone else's free work', its sponsoring much of it financially and otherwise.

As for OS development stalling if others took the same approach: you mean like Linux development has stalled? Oh, thats right, not only hasn't it stalled, its thrived for seventeen years.


By rcc on 1/25/2008 1:24:17 PM , Rating: 2
Yes, I know Linux is wonderful. But, it's nowhere near where it needs to be for widespread commercial/industrial/home use, outside of some server applications.

So, you can either pay for a "mostly" complete OS, or you can get it free, and pay someone like this to make it work for you.


By Jedi2155 on 1/24/2008 3:31:33 PM , Rating: 2
I can see a flaw in the idea of shuffling of jobs. You said that the jobs will be created at the cost of personnel from other fields, but the fields that are now empty of he personnel will still need new workers.

Thus the creation of new jobs, albeit not in the area that was implied by the article. This of course assumes that the workforce is not already strained and that the workforce is growing.


"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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