Several dozen nations have succeeded in the last year in reducing software piracy within their borders, but global software piracy continues to rise overall, according to the latest IDC study commissioned by the Business Software Alliance, a Copyright Alliance member. This is the sixth annual BSA-IDC Global Software Piracy Study; BSA President Robert Holleyman used this space to discuss the fifth annual study last year.

The study is worth reading in its entirety, but one point stands out given the historic highs in unemployment we’re experiencing right now, including in the IT industry. I’d direct your attention to an interesting statistic in the report. For every $1 of software sold in a given country, $3 to $4 of revenues for local IT service and distribution firms is generated. That’s a lot of jobs dependent on legal software sales. The new study notes that experiences in China and Russia confirms the link found between piracy and jobs in a 2008 IDC study; that report concluded that lowering PC software piracy by 10 percentage points over four years would create 600,000 additional new jobs worldwide.

For those who — correctly — care about statistical methodology when it comes to how figures such as financial losses are calculated, you’ll note IDC includes that information in the study. I think you’ll find the methodology pretty reasonable.

When you look at all 110 countries in the study, you see (well, I see) a persistent stubbornness in the numbers over time. Even in nations showing declines, the declines aren’t very steep, and the percentages are still at unacceptable levels. There is still much work to do.

The U.S. has, admirably, one of the lowest percentages for piracy, around 20%. But that hasn’t really budged much over the last six years. You also can’t focus solely on percentages. Puerto Rico has more than twice that percentage — 44% — but population variances mean its 2008 piracy loss figure is about $36 million, vs. $9.143 billion for the U.S. A slight difference.

Both percentage figures and total losses mirror closely the U.S. Trade Representative’s focus with the Special 301 report; in other words, troublesome nations on the BSA/IDC list tend to be on our special watch lists.

China here is shown at an 80% piracy level; a slight decline year-to-year, but total financial costs from that piracy actually increased slightly in 2008 to $6.677 billion, highest on the list. Russia’s percentage point total also decreased slightly to 68%, but its financial-cost total was $4.215 billion, also a slight increase. India went down one percentage point to 68% but saw financial damages increase to $2.768 billion.

Not surprisingly, those three nations — China, Russia and India — took win, place and show among financial losses, after, embarrassingly enough, the U.S. Fourth was, interestingly enough, France at $2.760 billion, even though its percentage point total was lower than the other three at 41%. Germany was in a similar situation with a fairly comparable population; it had only a 27% piracy rate but losses of $2.152 billion. I would assume pirates in those two nations — with comparable populations far below the big three as well as the U.S. — favor higher-cost software. Also, note that Canada remains persistently high among western nations in both percentage (32%) and financial cost ($1.222 billion), the latter a pretty hefty figure given the small population of the country. It’s worth noting Canada has been added to USTR’s Priority Watch List.

I could spend all day burrowing into this data and reporting on it, but I am no longer in that line of work, unfortunately. So at this point I’ll invite my readers to dive in.

Share this:

This entry was posted on Tuesday, May 12th, 2009 at 9:00 am by Patrick Ross and is filed under counterfeit, economy, international, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.