Global Losses From Software Piracy Growing

A new study conducted by IDC for the Business Software Alliance finds that about 35 percent of the software installed in personal computers worldwide is pirated—and that’s a number which hasn’t changed much since 2003. What has changed is the amount of money the software industry is losing to piracy: according to the BSA, for every two dollars earned from legitimate software sales, another dollar goes to software pirates. In 2006, losses totaled almost $40 billion worldwide—$5 billion more than the estimated losses from 2005. Over the next four years, the study predicts loses will amount to more than $180 billion.

The results are part of the BSA’s fourth annual study of global PC software piracy. The survey covered 102 countries, and found that piracy rates declined "moderately" in 62 countries, while increasing in 13 nations.

"The good news is we are making progress, however, we still have a lot of work to do to reduce unacceptable levels of piracy," said Robert Holleyman, BSA President and CEO, in a statement. "These significant losses translate into negative impacts on IT industry employment, revenues, and financial resources available for future innovation and the development of new technologies."

Surprisingly, the study found that China, long known as a hotbed of software and media piracy, dropped its piracy rate by four percentage points—and that’s actually a continuation of a downward trend which has seen the country shave ten points off its piracy rate in three years’ time. Of course, all things are relative: for 2006, China’s piracy rate stood at 82 percent, down from 92 percent in 2003. The study also found Russia’s overall piracy rate declined from 87 percent in 2003 to 80 percent in 2006.

The United States and Western Europe saw relatively static piracy rates of 22 percent and 36 percent, respectively.

Of the 102 countries included in the survey, roughly one third had software piracy rates over 75 percent. The study also found that while Latin America, Eastern Europe, the Middle East, Africa, and the Asia Pacific region account for about one third of all PC shipments, they represent only about 10 percent of spending on PC software.

"A number of factors contribute to regional differences in piracy: the strength of intellectual property protection, the availability of pirated software, and cultural differences," said IDC chief research officer John Gantz. "Reducing software piracy around the world will take much more work and investment, but those efforts will pay off in the form of stronger local IT industries that drive broader economic growth."

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