Hong Kong: Cracking down on PC software piracy would create hundreds of thousands of jobs globally and boost economic growth and tax revenues, particularly in Asia where piracy rates are high, a study by IDC shows.
In a study covering 42 countries, IDC said that if each country were to cut PC software piracy rates by 10 percentage points over the next four years, it would generate 600,000 new jobs and $141 billion in new revenue while boosting global tax revenues by $24 billion.
“Lower software piracy means more jobs. Software jobs are at the high end of the pay scale in the IT market, and the IT market is at the high end of salaries in the economy,” Marcel Warmerdam, research director of IDC IT Markets, told a press conference in Hong Kong on Tuesday.
A 10 point reduction in piracy could make China’s IT workforce the largest in the world, surpassing the United States, and make Russia a bigger IT market than India.
In the United States, piracy reduction would create 32,000 new jobs and add $41 billion to the world’s biggest economy, where spending on IT goods and services totalled $458 billion in 2007, or 3.4% of gross domestic product, according to IDC.
Of the 600,000 new jobs that it contends would be created globally, 435,000 would be in Asia, which has high piracy rates and therefore the most room to reduce them.
China and Vietnam have software piracy rates of 82% and 88% respectively -- which means eight out of every 10 software packages in use are illegal -- compared with 21% in the United States and 34% in Western Europe.
Reducing piracy in Asia by 10 percentage points in four years would generate more than $40 billion in economic growth and more than $5 billion in tax revenues in the region, according to the US-based IT market research firm.
“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,” said Warmerdam.
The IT sector, comprising software, hardware and software services, employs more than 1 million people worldwide and drew spending of $1.1 trillion in 2007.
The economic impact of an expanding software sector would be significant because although software accounts for only 22% of IT spending, it accounts for 34% of employment in the sector.
It also has a knock-on effect. For every $1 spent on legitimate packaged software, an additional $1.25 is spent on related services from local vendors such as software installation, training personnel and maintenance services, says IDC.