10pc piracy cut could create 5,700 new jobs

2 Apr 2003

If Ireland succeeds in cutting its current 42pc software piracy rate by 10pc down to 32pc it could grow Ireland’s software sector by 50pc, from the present US$2.1bn to nearly US$3.2bn, according to fresh research from IDC.

In 1996, Ireland had the second highest software piracy rate in Europe amongst businesses of over 70pc. The introduction of the Copyright Act in 2000 as well as increased vigilance by organisations such as BSA Ireland and Irish firms has resulted in the rate dropping to 42pc. However, this still contrasts significantly with the UK at 25pc and the US at around 10pc.

Vicky Hawksworth, an analyst with IDC, studied the market and believes that cutting Ireland’s piracy rate to 32pc could add US$570m to the Irish economy, create 2,400 additional high-wage jobs in the sector, as well as increase local industry revenues by nearly US$500m. It could also generate an additional US$236m in tax revenues for the Irish Government.

In reducing the piracy rate by 28pc from 70pc down to 42pc, Ireland achieved the largest software piracy reduction in western Europe and as a result the software industry grew 30pc and created more than 7,500 jobs in the IT sector. The IT sector in Ireland, IDC predicts, will grow by 40pc by 2006.

“Local industry would gain more than the multinational importers [from piracy reduction], mostly because so many of the benefits would accrue to local services and distribution companies, and because local software firms, who can’t spread their risk across geographies with lower piracy rates, would have the wherewithal to re-invest in their businesses,” said Hawksworth.

Julian McMenamin, chairman of BSA Ireland, said that with Ireland’s piracy rate standing at 42pc, almost one in every two software programmes in use in Ireland is illegal. He said the benefits of a downward spiralling IT piracy rate between 1996 and 2000 were obvious and that this progress should be furthered. “We believe that the Irish Government and the IT industry should lead by example and embrace programmes to educate consumers about their responsibilities and the harm piracy causes innovators, copyright owners and the economy.”

Internationally, based on a study of 57 countries that account for more than 98pc of overall IT consumption in the world, a 10pc drop in piracy from the present 40pc down to 30pc could see the IT industries in each country grow greater than 50pc. According to Hawksworth, a 10pc drop in global piracy would create 1.5m new high-paid jobs, create €57bn in tax revenues and add a further €357bn in additional economic growth.

Hawksworth says that this research covers the direct impact of a reduction of software piracy on software revenues and employment, but does not take into account the indirect benefits such as increased shipping and expenditure in the local economy.

By John Kennedy