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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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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.


"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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