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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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By amanojaku on 1/24/2008 12:32:02 PM , Rating: 5
Having been a software pirate in my teens (who hasn't?) I had a first-hand perspective on some pirates' motivations: low income. If you're broke honesty will not get you software. Now that I have a job I grudgingly pay for software, keeping in mind that I can only afford vital apps. That means no Photoshop, no Quark Express, no 3D Studio Max. Just Windows and Office, with the occasional game.

I doubt the high-piracy nations' populace makes enough money on average to buy much legally. Factor in the modern necessity of the computer and you have a situation creating pirates. I would bet the computer alone breaks the bank of these households. I'm not justifying piracy (I work for a software company; I need paying customers!) I'm just being practical.

RE: Income
By rcc on 1/24/2008 1:18:11 PM , Rating: 2
Having been a software pirate in my teens (who hasn't?)

I haven't, and doubt I would have today. However, it was more difficult when I was in my teens. Reels of tape and cards were a pain.

In the US, piracy is mostly a crime of convenience and opportunity. In developing countries they see it as a necessity, as you mentioned. However, it you want to undercut the industrial nations of the world in price, you can't always use the latest toys.

China for instance could actually pay workers a wage comparible to the EU or US, etc. And limit piracy of software, techniques, etc. But then they'd have to charge prices similar to those of the countries they are selling to.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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